RATCH: Annual Report 2004 by Nat Kim

CONTENTS Financial Overview Highlights of Operation in 2004 Message from the Chairman Board of Directors Executive Officers Remuneration for the Companyรปs Directors and Executives Organization Chart Management and Shareholding Structure The Companyรปs Top Ten Shareholders Nature of Business The Industry and Competition Risks in Business Operation Future Projects Transaction with Related Companies Management Discussion & Analysis Report on Compliance with Principles of Good Corporate Governance Responsibilities to Environment and Society Financial Statements Report of the Audit Committee The Board of Directorsรป Report on Its Responsibility to Financial Report Auditorรปs Report Balance Sheets Statements of Income Statements of Changes in Shareholderรปs Equity Statements of Cash Flows Notes to Financial Statements Other Information

2 5 8 10 15 18 22 24 29 33 37 40 45 47 52 57 69 73 74 75 76 78 79 80 82 109

Annual Report 2004

Ratchaburi Electricity Generating Holding Public Company Limited

Our business growth has always been involved with a sense of responsibility concerning matters of environmental management, health, safety, community development, employee well being and ethic in doing business. Electricity is important and necessary in everybody没s life, either directly or indirectly. The power generating business is a major social responsibility. We as a power generator realize that social responsibility is a matter of outmost concern. We make Corporate Social Responsibility (CSR) a core part of our organization没s values, policies, and strategies. We encourage our plants to take CSR matters very seriously. Most importantly, our CSR must be in harmony with local communities. Throughout the years, our business practices have indicated our willingness in applying our CSR concepts effectively. The result is that our organization is trusted by the stakeholders as a safe organization, that has proven to be competent and effective in protecting our environment and taking care of our community over the long term.

Financial Overview Million Baht

Million Baht

70,000 69,500 69,000 68,500 68,000 67,500 67,000 66,500 66,000 65,500 0

69,494.19

67,144.45

Year 2004

9,000 8,500 8,000 7,500 7,000 6,500 6,000 5,500 5,000 4,500 0

2003

Total Assets

Financial Position

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

† †Total Assets Total Liabilities Issued and Paid - up Share Capital Shareholdersû Equity

Operating Results Electricity Sales Share of profit (loss) of subsidiaries and joint ventures Other Income Total Revenues Cost of Sales Selling and Administrative Expenses Interest Expenses Total Expenses Income Tax Net Profit

6,487.03

5,424.33

Year 2004

2003

Net Profit 2004 69,494.19 41,026.18 14,500.00 28,468.01

Unit : Million Baht 2003 67,144.45 42,408.47 14,500.00 24,735.98

2004 39,714.03 407.90 294.50 40,416.43 32,173.20 495.22 1,224.68 33,893.10 36.30 6,487.03

2003 35,528.31 94.52 180.87 35,803.70 28,204.47 429.75 1,702.59 30,336.81 42.56 5,424.33

2004

2003

1.86 1.67 0.72 8.54 43 7.54 48

1.68 1.44 1.68 7.84 46 7.37 49

Profitability Ratio

2004

2003

Ratio of Gross Profit to Net Sales (%) Ratio of Net Profit to Net Sales (%) Rate of Return on Equity (%)

18.99 16.05 24.39

20.61 15.15 22.93

Efficiency Ratio

2004

2003

9.50 18.14 0.59 10,433.79 15.27 20.86

8.04 15.22 0.53 9,737.47 14.43 18.66

2004

2003

1.44 2.52

1.71 2.46

Per Share Data

2004

2003

Book Value Per Share (Baht) Earnings Per Share (Baht)

19.63 4.47

17.06 3.74

Current Ratio (Times) Acid Test Ratio or Quick Ratio (Times) Cash Flow from Operation to Current Liabilities Ratio (Times) Accounts Receivable Turnover Ratio (Times) Average Collection Period (Days) Accounts Payable Turnover Ratio (Times) Average Payment Period (Days)

Rate of Return on Assets (%) Rate of Return on Fixed Assets (%) Assets Turnover Ratio (Times) EBITDA (Million Baht) Ratio of EBITDA to Assets (%) Ratio of EBITDA to Fixed Assets (%)

Financial Policy Ratio Debt to Equity Ratio (Times) Debt Service Coverage Ratio (DSCR) (Times)

Annual Report 2004

â&#x20AC; Liquidity Ratio

Ratchaburi Electricity Generating Holding Public Company Limited

Financial Ratios

çRatchaburi Power Plantûs Community Development Projecté is the conclusion of brainstorming brought together from people surrounding Ratchaburi Power Plant which include 72 villages and 8 sub-districts in 3 districts of Ratchaburi Province; Muang, Photaram, and Damnern Saduak. The project aims to enhance sustainable quality of lives of people in the areas ; everyone is pledged to participate in developing their local areas in the way of community interdependence in collaboration with government and private sectors.

Ms. Buawan Sook-Koh, Asparagus Grower Mr. Sorn Sa-Ngoun-Pim, Owner of Asparagus Farm Ban Don Pho, Ban Sing District, Ratchaburi Province

HIGHLIGHTS OF OPERATION IN 2004

Business Operations Investment in Ratchaburi Power Company Limited

The Company through its subsidiary namely Ratchaburi Energy Company Limited has joined in the investment with Siam Ethanol Exports Company Limited in proportion of 15 percent valued approximately 45 million baht. After the Alcohol production plant has started commercial operation, Ratchaburi Energy Company Limited will get the right to study and develop biogas production project by utilizing wastewater from the plant, which can be used as the alternate fuel for the Company没s Power Plant project. Siam Ethanol Exports Company Limited currently is the operator of alcohol production for export using cassava shred as its raw material, with alcohol production capacity at 100,000 liters per day equivalent to 30 million liters per year. The project site is located at Ban Khai District, Rayong Province. Currently, the project is under construction and expected to start the commercial operation in January 2006.

Annual Report 2004

Investment in Project of Alcohol Production for Export

Ratchaburi Electricity Generating Holding Public Company Limited

The Company through its subsidiary namely Ratchaburi Alliances Company Limited has joined in the investment with Ratchaburi Power Company Limited in proportion of 25 percent, valued approximately 2,300 million baht. The Company has gradually invested in this project since 2004 until 2008. As a result from such investment, the generating capacity of the Company will increase by 350 MW from current total installed capacity of 3,907.5 MW. Ratchaburi Power没s Power Plant Project composes 2 Blocks of Combined-Cycle Power Plant, using natural gas as their primary fuel and diesel as secondary fuel with an installed capacity of 1,400 MW, located in the area of the existing Ratchaburi Power Plant. Currently, the project is under development. On February 7, 2004, the Company has entered into the Shareholder Agreement and Share Purchase Agreement. The Ratchaburi Power没s Power Plant Project has been scheduled to start commercial operation of the Combined-Cycle Power Plants Block 1 and 2 on March and June, 2008 respectively.

TRIS has rated the Company at the level of çVery Outstandingé at total score 8.02. The SET has granted reduction right on annual fee at 50 percent in 2005 and 2006 and privileged securities offering fee at 50 percent in 2005 from the SEC. Moreover, the Company had favor on rule and regulatory from the Revenue Department and the Business Development Department.

Environmental Impact Assessment Study on Ratchaburi Power Plant Expansion Project The Company through its subsidiary, Ratchaburi Electricity Generating Company Limited, has designated Southeast Asia Technology Company Limited to conduct Environmental Impact Assessment Study of 700 MW gas-fired Combined-Cycle Power Plant. The report of the study is under the consideration of the Office of Natural Resources and Environmental Policy and Planning.

Interim Dividend at 0.90 Baht per Share The Board of Directorsû Meeting No. 9/2547 held on September 13, 2004, has resolved to pay interim dividend from the 6-month period of operating performance in 2004 (January 1, 2004 to June 30, 2004) at 0.90 baht per share, totaling 1,305 million bath. The dividend was paid from profits exempted not to be calculated for corporate income tax. The dividend payment to shareholders was made on 8th October 2004.

Management Performance

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

çTop Quartile Companiesé Corporate Governance For 2003

The Company has been rated at çTop Quartile Companiesé on its good corporate governance under the Program of Baselining Corporate Governance Practices of Thai Listed Companies organized by Thai Institute of Directors Association (IOD) together with the Stock Exchange of Thailand (SET), and the Securities Commission (SEC). It is the three consecutive years that the Company has been awarded. In this program, there are 337 listed companies have joined in and the Company is the one of 85 companies in the outstanding group.

TRIS Rating at çVery Outstandingé on Corporate Governance Ever since joining in the Corporate Governance Rating of the SET, the Company has received rating from Thai Rating and Information Service Company Limited (TRIS) at the level of çVery Outstandingé at total score 8.02. The SET has granted reduction right on annual fee at 50 percent in 2005 and 2006 and privileged securities offering fee at 50 percent in 2005 from the SEC. Moreover, the Company had favor on rule and regulatory from the Revenue Department of the Ministry of Finance and the Business Development Department of the Ministry of Commerce. The Company is the 8th listed company rating at high score.

Annual Report 2004

Social and Environmental Activities The Company has initiated 5-year çRatchaburi Power Plantûs Community Development Projecté to enhance life quality of people living surrounding the Power Plant area including 72 villages, 8 sub-districts in Muang District, Damnern Saduak District, and Photaram District of Ratchaburi Province, in collaboration with the Population and Community Development Association (PDA). The project has been started from 2004 to 2008. It simply reflects the Companyûs willingness in community and responsibility. Ratchaburi Power Plantûs Community Development Project aims to enhance community well being and strengthen unity of the communities. Under the project, there are several activities including Ratchaburirom Park, Village Bank and Revolving Loan Fund, Community Development Program, Bangpa Cannel Preservation, Health and Sanitary Promotion and Strengthening Competency via Activities, and Social and Political Development.

Ratchaburi Electricity Generating Holding Public Company Limited

Set Up Information Center and Emergency Operation Room in Ratchaburi Power Plant The Ratchaburi Electricity Generating Company Limited, a subsidiary of the Company, has set up the Information Center and the Emergency Operation Room in Ratchaburi Power Plant to ensure that generation systems and equipment status in the plant have been monitored and reported real-time on-line. This has decreased the losing cost on fuel difference and able to inspect other equipment in the plant at every time. In addition, it helps supporting any emergency case in the plant more effectively.

As a good citizen, Social and Environmental Affairs is another important mission that the Company has seriously been devoting the Companyûs resources for the entire year 2004. To do that, the Company has collaborated with the Population and Community Development Association (PDA) in initiating the project entitled çRatchaburi Power Plantûs Community Developmenté, in order to develop the quality of life for the people living in the areas surrounding the Ratchaburi Power Plant, which can be counted as 72 villages, 8 Sub-districts.

Message from the Chairman

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

To All Shareholders,

In 2004, Ratchaburi Electricity Generating Holding Public Company Limited has aimed on investing and expanding the Companyûs investment projects in electricity generating business, in order to enhance the Companyûs installed capacity in power generation, which leads to increase of the Companyûs income. The Company, through its subsidiary namely Ratchaburi Alliances Company Limited has acquired 25 percent of shareholding in Ratchaburi Power Company Limited, which operates the 1,400 MW power plant project, with the total investment of 2,300 million baht commencing partial payment from this year to pay up to the full amount in 2008. The mentioned investment will enable us to have additional capacity of 350 MW from the current capacity of 3,907.5 MW. Moreover, Ratchaburi Energy Company Limited, another subsidiary, has acquired 15 percent of shareholding in Siam Ethanol Exports Company Limited, an authorized alcohol manufacturer for export producing alcohol from cassava shred, at the investing amount of 45 million baht. Ratchaburi Energy Company Limited is entitled to study and develop biogas production project by utilizing wastewater from the alcohol production process, such biogas supply could be employed as an alternative fuel for the power plant project. This project is expected to start its feasibility study in 2006 after the Ethanal plant is able to commercially produce the alcohol. Nevertheless, under the new structure on electricity generating business deregulated by the government has restructured the business atmosphere to be more open and intensified. As a result, the Company has its efficiency in every aspects including operating procedure, personnel competency, and cost control, making the Company highly competitive and responsive to the changes. This effort has contributed to the growth of the Companyûs net profit of 6,487.03 million baht in 2004, increasing by 19.6 percent from the previous yearûs performance, which resulted from the decrease of maintenance cost, reduction in interest rate adjusted to MLR-2.5 percent, and full-year profit sharing from the investment in Tri Energy Company Limited whereas the Ratchaburi Gas Company Limited has been holding 37.5 percent of shares since 2003.

Annual Report 2004

In the management aspect, the Company has applied the principles of good corporate governance into normal management procedure. This can be witnessed from the Companyûs ranking in çTop Quartile Companiesé assessed by çBaselining Corporate Governance Practices of Thai Listed Companiesé program, which organized by the Institute Of Directors Association (IOD), the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC). Our Company is rated for three consecutive years. Furthermore, Thai Rating and Information Service Company Limited (TRIS) rated the Companyûs Corporate Governance at çVery Outstandingé level with the total score of 8.02 points. As privileges, the Company has received the SETûs annual fees reduction for two years, along with the discount on the SECûs securities offering fees, and a special favor on the rule and regulations from the Revenue Department of the Ministry of Finance and the Business Development Department of the Ministry of Commerce. As a good citizen, Social and Environmental Affairs is another important mission that the Company has seriously been devoting the Companyûs resources for the entire year 2004. The Company realizes that it is our duties and responsibilities to protect the environment and enhance living quality of the society in communities where we operate our business. To do that, the Company has collaborated with the Population and Community Development Association (PDA) in initiating the project entitled çRatchaburi Power Plantûs Community Developmenté, in order to develop the quality of life for the people living in the areas surrounding the Ratchaburi Power Plant, which can be counted as 72 villages, 8 Sub-districts in Muang District, Damnern Saduak District and Photaram District of Ratchaburi Province. The project is scheduled for five years operation, from 2004 to 2008. In this very first year, the Company takes part in developing and making sustainable community life for good. On behalf of the Board of Directors, executives, and all employees, I wish to thank all our shareholders and investors for extending your trust and support to the Company throughout the past years. All the Management, the staff members, and I would put all our efforts in contributing to the Companyûs success and benefit for all of our shareholders and stakeholders.

Ratchaburi Electricity Generating Holding Public Company Limited

(Mr.Cherdpong Siriwit) Chairman

BOARD OF DIRECTORS OF THE COMPANY Mr. Cherdpong Siriwit Chairman (Independent Director) Chairman, Human Resources and Remuneration Committee Age 58

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Education ● Master of Economics, Georgetown University, U.S.A. ● Bachelor of Economics (Hons.), Thammasat University ● National Defence College (Class 40) ● King Prajadhipokûs Institute (Class 5), çPolitics and Governance in Democratic Systems for Executiveé ● The Civil Service Executive Development Program (Class 13), the Civil Service Training Institute Current ● Permanent Secretary, Ministry of Energy ● Chairman, PTT Public Company Limited ● Director, PTT Exploration and Production Public Company Limited ● Director, Thai Oil Public Company Limited ● Director, Thai Oil Power Company Limited Previous ● Deputy Permanent Secretary, Ministry of Industry ● Secretary-General, Thai Industrial Standards Institute (TISI), Ministry of Industry ● Director-General, Department of Mineral Resources (DMR), Ministry of Industry ● Director-General, Office of Industrial Economics, Ministry of Industry ● Deputy Director-General, Office of Industrial Economics, Ministry of Industry ● Secretary-General, Office of the Cane and Sugar Board, Office of the Permanent Secretary

Mr. Sujarit Patchimnun Director

Age 64

Age 65

Age 59

Education ● Honorary Doctorate Degree in Engineering, Chulalongkorn University ● M.S. in Industrial Engineering (Operation Research), Oregon State University, U.S.A. ● Bachelor of Engineering (Electrical Engineering) (2nd Class Honor), Chulalongkorn University ● The Joint State: Private Sector Regular Course, the National Defence College (Class 3) ● Certificate, Advanced Management Program, Harvard Business School, Harvard University, U.S.A. Current ● Chairman, Ratchaburi Power Company Limited ● Chairman, Tri Energy Company Limited ● Chairman, the Aromatics (Thailand) Public Company Limited ● Director, PTT Public Company Limited ● Director, PTT Exploration and Production Public Company Limited ● Director, EGAT ● Director and Chairman of Audit Committee, Vinythai Public Company Limited Previous ● Governor, Petroleum Authority of Thailand ● Executive Vice President, Oil Business, Petroleum Authority of Thailand ● Deputy Governor, Supply & Refinery Oil, Petroleum Authority of Thailand

Education ● Bachelor of Engineering (Mechanical Engineering), Chulalongkorn University ● National Defence College (Class 35) ● Certificate, Advanced Management Program (AMP), Harvard Business School, Harvard University, U.S.A. Current ● Director, Suan Lung Rama IX Foundation ● Director, the Control Commission on Price of Goods and Services (CCP), Ministry of Commerce ● Advisor to the Minister of Education Previous ● Governor, EGAT ● President-Mine Business, EGAT ● Deputy Governor-Administration, EGAT ● Chairman, Electricity Generating Public Company Limited

Education ● Master of Political Science, Thammasat University ● Bachelor of Political Science, Thammasat University Current ● Director-General, Department of Provincial Administration, Ministry of Interior ● Chairman, Eastern Water Resources Development and Management Public Company Limited ● Chairman, Eastern Hobas Pipes Company Limited ● Director, EGAT ● Director, Provincial Electricity Authority Previous ● Director-General, Community Development Department, Ministry of Interior ● Governor of Chonburi province ● Governor of Nonthaburi province ● Governor of Nakornpanom province

Annual Report 2004

Mr. Viravat Chlayon Independent Director Chairman, Risk Management Committee Member, Audit Committee

Ratchaburi Electricity Generating Holding Public Company Limited

Mr. Pala Sookawesh Director

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

BOARD OF DIRECTORS OF THE COMPANY

Mr. Viroj Klangboonkrong Independent Director Member, Audit Committee Member, Risk Management Committee

Mr. Suchart Thada-Thamrongvech Independent Director Chairman, Audit Committee Member, Risk Management Committee

Mr. Kraisi Karnasuta Director

Age 60

Age 52

Age 57

Education Education ● Master of Engineering, Asian Institute of ● Diploma in National Defence Course, The Technology National Defence College (Public and Private ● Master of Business Administration, Program: Class 1) ● Ph.D., Economics, McMaster University, Canada Thammasat University ● Bachelor of Engineering, Chulalongkorn ● M.Sc., Economics, the London School of University Economics and Political Science, United Kingdom ● Bachelor of Economics (Hons.), Thammasat Current ● Director-General, Department of Energy University Business, Ministry of Energy Current ● Eminent Advisor to the Prime Minister in the Previous ● Chief Engineers for Building and Public Safety Field of Economics Control (Level 10), Public Works Department, ● Assoc.Prof. of Economics, Faculty of Economics, Ramkhamhaeng University Ministry of Interior ● Chief Engineers for Gas and Fuel Safety ● Director and Member of Audit Committee, Regulation (Level 9), Public Works Siam City Bank Public Company Limited Department, Ministry of Interior Previous ● Director, Gas and Fuel Safety Regulation ● Advisor to the Minister of Commerce ● Vice-Rector, International Affairs and Division, Public Works Department, Research, Ramkhamhaeng University Ministry of Interior ● Personnel Division Director, Public Works ● Director, Metropolitan Waterworks Authority ● Director, Provincial Waterworks Authority Department, Ministry of Interior ● Secretary, Public Works Department, ● Director and Member of Audit Committee, Ministry of Interior Bangkok Metropolitan Bank Public Company Limited ● Director, Bank for Agriculture and Agricultural Cooperatives ● Advisor to the Senate Standing Committee on Economics, Commerce and Industry ● Specialist attached to the Senate Standing Committee on Finance, Banking, and Financial Institutions ● Specialist attached to the Standing Committee on Finance, Banking and Financial Institutions, the House of Representatives ● Advisor to the Committee on Finance and Investment, the Thai Chamber of Commerce

Education ● Master of Engineering (Electrical Engineering), University of Washington, U.S.A. ● Bachelor of Engineering (Electrical Engineering), Chulalongkorn University ● Certificate, National Defence College (Class 43) ● Certificate, Advanced Management Program (AMP), Harvard Business School, U.S.A. Current ● Governor, EGAT ● Member of CIGRE: Power System Operation and Control ● President of IEEE: Thailand Section Previous ● Deputy Governor›Policy and Planning, EGAT ● President, Electricity Generating Public Company Limited ● Director, Ratchaburi Electricity Generating Co., Ltd. ● President, Maintenance Business, EGAT ● Assistant Governor in Transmission System Operation, EGAT ● Director›System Control and Operation Division, EGAT

Mr. Narongsak Vichetpan Director

Mr. Kumphuy Jirararuensak Director Member, Human Resources and Remuneration Committee

Mr. Areepong Bhoocha-oom Independent Director Member, Audit Committee Member, Human Resources and Remuneration Committee

Age 59

Age 58

Age 47

Annual Report 2004

Education ● Ph.D. Finance, University of Mississippi, U.S.A. ● Master of Business Administration (Finance), Marshall University, U.S.A. ● Bachelor of International Management, Boston University, U.S.A. Current ● Deputy Director-General, State Enterprise Policy Office ● Director, Airport Authority of Thailand ● Director, Ratchaburi Electricity Generating Company Limited Previous ● Director, Ratchaburi Energy Company Limited ● Director, Padaeng Industry PLC., Ltd. ● Director, Krungthai Card Co., Ltd. ● Director, Office of State Enterprise and Government Securities, Ministry of Finance

Ratchaburi Electricity Generating Holding Public Company Limited

Education Education ● Bachelor of Engineering (Electrical ● Master of Engineering (Hydraulic Engineering), Asian Institute of Technology Engineering) (2 nd Class Honor), ● Bachelor Degree of Engineering Chulalongkorn University (Civil Engineering), Chulalongkorn University Current ● Senior Deputy Governor-Transmission ● Certificate, Senior Executive Program, Sasin Graduate Institute of Business System Group, EGAT Administration, Chulalongkorn University Previous ● Deputy Governor-Transmission System ● Certificate, Advanced Management Program (AMP), Harvard Business School, U.S.A. Business, EGAT ● Assistant Governor-Transmission System Current ● Senior Deputy Governor-Development Group, Operation, EGAT ● Vice President-Generation Business 1 EGAT ● Associates Judge, the Central Intellectual Power Plant, EGAT ● Director, Northeastern Region Operation Property and International Trade Court ● Advisor to the Committee on Privatization of Division, EGAT ● Director, Transmission System Maintenance the State Enterprises ● President, EGAT Saving and Credit Cooperative Division, EGAT Limited Previous ● Deputy Governor-Policy and Planning, EGAT ● Fuel Business President-Fuel Business, EGAT ● Manager, Environmental Division, EGAT

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

BOARD OF DIRECTORS OF THE COMPANY

Mr. Chanin Vongkusolkit Director

Mr. Chulasingh Vasantasingh Director

Mr. Boonchoo Direksathapon Director Managing Director

Age 52

Age 54

Age 58

Education ● Master of Business Administration (Finance), St.Louis University, U.S.A. ● Bachelor in Economics, Thammasat University Current ● Director, Federation of Thai Capital Market Organizations ● Director, Thai Institute of Directors Association ● Director, Listed Companies Association ● Director, Board of Investment (BOI) ● Director and Chief Executive Officer, Banpu PLC. ● Director, BLCP Power Limited ● Director, Amarin Plaza PLC. ● Director, Mitr Phol Sugar Corp. Ltd. Previous ● Director, Tri Energy Co.Ltd. ● Director, United Standard Terminal PLC. ● Director, United Securities PLC.

Education ● Master of Comparative Law (MCL.), University of Illinois, U.S.A. ● Bachelor of Laws (LLB.) (Hon.), Chulalongkorn University ● Barrister-at-Law, the Institution of Legal Education ● Diploma, National Defence College ● Certificate, Harvard Business School, U.S.A. Current ● Inspector-General, Department of Inspector General ● Director, PTT Exploration and Production Public Company Limited ● Director and member of Audit Committee, EGAT ● Director and member of Procurement Committee, Metropolitan Electricity Authority ● Director, Thai Bar Association ● Director, The property of Chulalongkorn University Previous ● Director-General, Department of Legal Counsel, Office of the Attorney General ● Director-General, Department of Litigation of Attorney General, Office of the Attorney General ● Director-General, Department of International Affairs, Office of the Attorney General ● Executive-Director, International Contract Division ● Director, Eastern Water Resources Development and Management Public Company Limited ● Director and member of Audit Committee, New Bangkok International Airport Public Company Limited ● Director, Mass Communication Organization of Thailand

Education nd ● Bachelor Degree of Accounting (2 Class Honor), Chulalongkorn University ● Fellow Member of the Institute of Chartered Accountants in England & Wales ● Diploma, National Defence College ● Diploma, the Senior Executive Program, SASIN Graduate Institute of Business Administration of Chulalongkorn University ● Diploma, the Finance for Senior Executives Course and the Program for Management Development (PMD), Harvard Business School, Harvard University, U.S.A. ● Diploma, Fellow Member of Thai Institute of Directors Association Current ● Director, Ratchaburi Electricity Generating Co., Ltd. ● Director, Ratchaburi Energy Co., Ltd. ● Director, Tri Energy Co., Ltd. ● Director, Ratchaburi Power Co., Ltd. ● Acting Chief Financial Officer, EGAT ● Director and Member of Audit Committee, Advanced Info Service PLC. ● Director, SCB Asset Management Co., Ltd. ● Director, Siam Ethanol Exports Co., Ltd. Previous ● Chairman, Ratchaburi Alliances Co., Ltd. ● Chairman, Ratchaburi Gas Co., Ltd. ● Chairman, Ratch Udom Power Co., Ltd. ● Acting Managing Director Ratchaburi Electricity Generating Co., Ltd. ● Deputy Governor-Account and Finance and Acting Deputy Governor-Administration, EGAT

Mr. Smarn Phongprapaphan Deputy Managing Director-Business Ventures

Ms. Vajana Angsukomutkul Deputy Managing Director-Accounting and Finance

Age 58

Age 60

Age 58

Education ● Bachelor Degree of Accounting (2nd Class Honor), Chulalongkorn University ● Fellow Member of the Institute of Chartered Accountants in England & Wales ● Diploma, National Defence College ● Diploma, the Senior Executive Program, SASIN Graduate Institute of Business Administration of Chulalongkorn University ● Diploma, the Finance for Senior Executives Course and the Program for Management Development (PMD), Harvard Business School, Harvard University, U.S.A. ● Diploma, Fellow Member of Thai Institute of Directors Association Current ● Director, Ratchaburi Electricity Generating Co., Ltd. ● Director, Ratchaburi Energy Co., Ltd. ● Director, Tri Energy Co., Ltd. ● Director, Ratchaburi Power Co., Ltd. ● Acting Chief Financial Officer, EGAT ● Director and Member of Audit Committee, Advanced Info Service PLC. ● Director, SCB Asset Management Co., Ltd. ● Director, Siam Ethanol Exports Co., Ltd. Previous ● Chairman, Ratchaburi Alliances Co., Ltd. ● Chairman, Ratchaburi Gas Co., Ltd. ● Chairman, Ratch Udom Power Co., Ltd. ● Acting Managing Director Ratchaburi Electricity Generating Co., Ltd. ● Deputy Governor-Account and Finance and Acting Deputy Governor-Administration, EGAT

Education ● Master of Engineering (Water Resource Development), Asian Institute of Technology ● Bachelor of Engineering (Civil Engineering), Chulalongkorn University Current ● Chairman, Ratchaburi Alliances Co., Ltd. ● Chairman, Ratch Udom Power Co., Ltd. ● Director and Acting Managing Director, Ratchaburi Energy Co., Ltd. ● Director, Siam Ethanol Exports Co., Ltd. ● Executive Director, Ratch Udom Power Co., Ltd. Previous ● Assistant Governor-Business Ventures, EGAT ● Director-Portfolio Management Division, EGAT ● Assistant Director-System Planning Division, EGAT

Education ● Master of Management, SASIN Graduate Institute of Business Administration of Chulalongkorn University ● Bachelor of Accountancy (2nd Class Honor), Chulalongkorn University Current ● Director and Managing Director, Ratch Udom Power Co., Ltd. ● Director and Managing Director, Ratchaburi Gas Co., Ltd. ● Director and Managing Director, Ratchaburi Alliances Co., Ltd. ● Director, Tri Energy Co., Ltd. Previous ● Assistant Director, Controller Division, EGAT ● Chief, Account Finance and Budget Report and Analysis Department, Controller Division, EGAT

Annual Report 2004

Mr. Boonchoo Direksathapon Managing Director

Ratchaburi Electricity Generating Holding Public Company Limited

EXECUTIVE OFFICERS

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Mr. Ni›run Wongchanglor Mr. Vatchara Noomahan Mr. Peerawat Pumthong Senior Director, Office of Managing Director Senior Director, Office of Managing Director Senior Director, Business Management Division

Age 53

Age 44

Age 46

Education ● Master Degree in Management, SASIN Graduate Institute of Business Administration of Chulalongkorn University ● Master Degree in Electrical Engineering, Chulalongkorn University ● Bachelor Degree in Electrical Engineering (2nd Class Honors), Kasetsart University Current ● Assigned to work as President, Tri Energy Co., Ltd. Previous ● Senior Vice President Level 12, Banpu Public Company Limited Group, assigned to work as President in Tri Energy Co., Ltd. ● Vice President Level 11, Banpu Public Company Limited Group, assigned to work as Operations Director in Tri Energy Co., Ltd. ● Assistance Vice President of Business Development›Power, Banpu Public Company Limited

Education ● Master of Management, Asian Institute of Management (AIM), Philippines ● Bachelor of Accounting, Thammasat University Current ● Assigned to work as Director, Finance and Accounting, Tri Energy Co., Ltd. Previous ● Vice President level 11, Banpu Public Company Limited Group, assigned to work as Director›Finance and Accounting in Tri Energy Company Limited ● Senior Manager›Investment Division, Banpu Public Company Limited ● Senior Manager›Finance Division, Banpu Public Company Limited ● Manager›Finance Division, Banpu Public Company Limited ● Assistance Finance Manager›Finance and Accounting Division, Banpu Public Company Limited ● Senior Project Finance officer, The Industrial Finance Corporation of Thailand (IFCT)

Education ● Master of Business Administration, Monash University, Australia, and Certificate of Merit in International Business ● Master of Engineering, Asian Institute of Technology (AIT) ● Bachelor of Engineering (2nd Class Honor), Khonkaen University ● Certificate, ASEAN Executive Development Program, Business School of Thammasart University ● Certificate, Electric Power Development from Swedish Board of Investment and Technical Support (BITS), Sweden Current ● Acting Deputy Managing Director of the Ratchaburi Energy Co., Ltd. ● Director, Ratchaburi Alliances Co., Ltd. ● Advisor to the Senate Standing Committee on Economics, Commerce and Industry Previous ● Chief, Business Venture Group Portfolio Management Division, EGAT ● Chief, Contract Negotiation and Management Group, Domestic Power Purchase Division, EGAT ● Chief, Engineering and Project Implementation Group, Business Venture Division, EGAT

Mr. Thoedpan Indramaha Mr. Prayut Thongsuwan Director, Internal Audit Division Director, General Administration Division

Age 57

Age 54

Age 49

Age 46

Education ● Bachelor of Accountancy, Chulalongkorn University ● Certificate, Senior Executive Program, SASIN Graduate Institute of Business Administration of Chulalongkorn University ● Certificate, Advanced Mini MBA, Chulalongkorn University ● Certificate, Mini MBA, Chulalongkorn University Current ● Director, Ratchaburi Gas Co., Ltd. Previous ● Accountant Level 10, Chief, Financial Analysis and Budgeting Group, Domestic Power Purchase Division, EGAT ● Accountant Level 10, Chief, Financial Analysis Group, Business Venture Division, EGAT ● Assistant Chief, Accounting Department, Accounting Division, EGAT

Education ● Master of Management, SASIN Graduate Institute of Business Administration of Chulalongkorn University ● Bachelor of Accountancy (2nd Class Honor), Chulalongkorn University Current ● Director, Ratch Udom Power Co., Ltd. ● Executive Director, Ratchaburi Power Co., Ltd. Previous ● Assistant Director, Portfolio Management Division, EGAT ● Accountant level 10, Portfolio Management Division, EGAT ● Chief, General Accounting Department, Accounting Division, EGAT

Education ● Bachelor of Accountancy, Chulalongkorn University ● Certificate, Senior Executive Program, SASIN Graduate Institute of Business Administration of Chulalongkorn University Previous ● Chief, Computer Audit Department, Internal Audit Division, EGAT ● Assistant Chief, Computer Audit Department, Internal Audit Division, EGAT ● Assistant Chief, Audit Department 4, Internal Audit Division, EGAT

Education ● Master of Public and Private Management, The National Institute of Development Administration ● Bachelor of Political Sciences (Public Administration), Thammasat University ● Certificate, Senior Executive Program, SASIN Graduate Institute of Business Administration of Chulalongkorn University ● Certificates of Advanced Mini MBA, Chulalongkorn University Previous ● Chief, Procurement and General Services Department, Demand Side Management and Planning Division, EGAT ● Assistant Chief, Appliances Efficiency Improvement Project, Demand Side Implementation Division, EGAT

Annual Report 2004

Mrs. Darunee Abhinoraseth Director, Finance Division

Ratchaburi Electricity Generating Holding Public Company Limited

Mrs. Arunee Rojanapenkul Director, Accounting Division

Remuneration for the Companyûs Directors and Executives Monetary Remuneration Important Criteria 1. A directorûs bonus was allocated in accordance with the period of holding office. In case of the

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

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

director holding two posts simultaneously for any period of time, the dfrector shall receive a bonus from the major company (the company that allocates a higher bonus payment) for that particular period. 2. A director who was an executive did not receive a meeting allowance. 3. The meeting allowances of Ratchaburi Electricity Generating Holding Public Company Limited consisted of the meeting allowances of the Board of Directors, the Audit committee, the Committee on Human Resources and Risk Management Committee. 1) Ratchaburi Electricity Generating Holding Public Company Limited. 1.1 Remuneration the Board of Director Unit : Baht No. Name List Holding Period Meeting Holding Period Bonus 4/ Remuneration of 2004 allowance of 2003 (month) (month)

†

5/,11/ Mr. Cherdpong Siriwit 7/,8/,11/ Mr. Areepong Bhoocha-oom Mr. Viroj Klangboonkrong 7,/10/,11/ Mr. Sujarit Patchimnun Mr. Pala Sookawesh Mr. Suchart Thada-thamrongvech 6/,10/,11/ 7/9/,11/ Mr. Viravat Chlayon 8/ Mr. Kumphuy Jirararuensak Mr. Narongsak Vichetpan Mr. Apai Chandanachulaka 2/ Mr. Chanin Vongkusolkit 1/,2/ Mr. Silchai Thirawat 1/ Mr. Chulrasingh Vasantasingh 1/ Mr. Kraisi Karnasuta Mr. Boonchoo Direksathapon 3/ Mr. Udom Thuvavong 3/ Mr. Vitaya Kotcharug 3/ Mrs. Pimolsri Siripaibul 3/ Mr. Picharn Satapanajaru 3/ Mr. Narong Wongpaiboon 3/ Mr. Somchai Richupan 3/ Mr. Tawee Butsuntorn 3/ Mr. Suporn Hotimavorakul 3/ Mr. Chalermchai Ratnarak 3/ Mr. Norkun Sitthiphong Total

12 12 12 12 12 12 12 12 12 5 12 9 6 2 12 -

597,500.00 472,000.00 584,000.00 400,000.00 410,000.00 608,000.00 596,000.00 488,000.00 430,000.00 190,000.00 380,000.00 328,387.10 189,000.00 40,000.00 5,712,887.10

8 12 8 8 8 8 8 3 3 2 2 12 9 4 4 4 4 4 4 9 8 4

900,684.93 1,498,184.93 1,000,000.00 1,472,000.00 723,287.67 1,307,287.67 723,287.67 1,123,287.67 723,287.67 1,133,287.67 723,287.67 1,331,287.67 723,287.67 1,319,287.67 252,054.79 740,054.79 252,054.79 682,054.79 150,684.93 340,684.93 131,506.85 511,506.85 328,387.10 189,000.00 40,000.00 1,000,000.00 1,000,000.00 747,945.21 747,945.21 276,712.33 276,712.33 276,712.33 276,712.33 276,712.33 276,712.33 276,712.33 276,712.33 345,890.41 345,890.41 276,712.33 276,712.33 747,945.21 747,945.21 676,712.33 676,712.33 276,712.33 276,712.33 11,482,191.78 17,195,078.88

Note The Board of Directors consists of 13 members 1/ During the year 2004, the Board of Directors consisted of 3 persons. - Mr. Silchai Thirawat assigned on January 13, 2004 - Mr. Chulasingh Vasantasingh assigned on June 22, 2004 - Mr. Kraisi Karnasuta assigned on November 1, 2004 2/ During the year 2004, there were 2 Directors who resigned from the Board. - Mr. Apai Chandanachulaka resigned on May 25, 2004 - Mr. Silchai Thirawat resigned on October 1, 2004 3/ During 2003, there were 10 directors who resigned and retired from the Board. 4/ Bonuses for Board of Directors in 2003 has been paid on April 2004 followed by the resolution of the Shareholders没 Annual Meeting held on April 12, 2004. 5/ Chairman of the Board of Directors and Chairman of the Human Resources and Remuneration Committee 6/ Chairman of the Audit Committee 7/ Member of the Audit Committee 8/ Member of the Human Resources and Remuneration Committee 9/ Chairman of the Risk Management Committee 10/ Member of the Risk Management Committee 11/ Independent Director 1.2 Remuneration for Executives of the Company Rumuneration Salaries Bonuses Contributions to the Provident Fund Total

Number of persons 10 10 10

Unit : Million Baht Amount 26.906 12.454 1.345 40.705

2) Ratchaburi Electricity Generating Company Limited

121/ 8

2.766 5.470 8.236

5 5 5

11.094 5.055 0.555 16.704

1/ The Board of Directors consisted of 9 persons. During the year, there were directors vacating office and being reappointed to hold office on various occasions.

Annual Report 2004

Number of persons

Ratchaburi Electricity Generating Holding Public Company Limited

Rumuneration 2.1 Board of Directors Meeting allowances Bonuses Total 2.2 Executives Salaries Bonuses Contributions to the Provident Fund Total

Unit : Million Baht Amount

3) Ratchaburi Energy Company Limited Rumuneration 3.1 Board of Directors Meeting allowances Bonuses Total 3.2 Executives Salaries Bonuses Contributions to the Provident Fund Total

Number of persons

Unit : Million Baht Amount

12 1/ 9

1.830 0.806 2.636

2 2/ 2 2

2.049 0.622 0.102 2.773

1/ The Board of Directors consisted of 8 persons. During the year, there were directors vacating office and being reappointed to hold office on various occasions. 2/ The executives of Ratchaburi Energy Company Limited consisted of 2 persons excluding executives on an assignment from Ratchaburi Electricity Generating Holding Public Company Limited.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

4) Ratchaburi Gas Company Limited, Ratch Udom Power Company Limited and Ratchaburi Alliances Company Limited The directors and executives of these companies did not receive remuneration because they were appointed from the executives of Ratchaburi Electricity Generation Holding Public Company Limited没s group.

The Executives Holding Shares in the Company and Subsidiaries As at December 31, 2004

Mr. Cherdpong Siriwit Mr. Viroj Klangboonkrong Mr. Sujarit Patchimnun Mr. Pala Sookawesh Mr. Suchart Thada-Thamrongvech Mr. Viravat Chlayon Mr. Kumphuy Jirararuensak Mr. Narongsak Vichetpan Mr. Areepong Bhoocha-oom Mr. Chanin Vongkusolkit Mr. Chulasingh Vasantasingh Mr. Kraisi Karnasuta Mr. Boonchoo Direksathapon Mr. Smarn Phongprapaphan Ms. Vajana Angsukomutkul Mr. Thoedpan Indramaha Mr. Peerawat Pumthong Mr. Prayut Thongsuwan Mrs. Darunee Abhinoraseth Mrs. Arunee Rojanapenkul Mr. Vatchara Noomahan Mr. Ni-run Wongchanglor

Ratchaburi Alliances Co.,Ltd

1 8,500 21,719 50,749 10,000

12,700 69,576 18,149 180,000 29,000 7,300 5,300

1 1 1

1 1 1 1

Note : 1. Executives shareholding includes shares held by spouse and their minor 2. Banpu Gas Power Company Limited has changed its name to Ratchburi Gas Company Limited on January 8, 2004.

Annual Report 2004

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

Ratchaburi Electricity Ratchaburi Ratchaburi Ratchaburi Gas Ratch Udom Generating Electricity Energy Co.,Ltd Co.,Ltd Power Co.,Ltd Holding PCL. Generating Co.,Ltd

Ratchaburi Electricity Generating Holding Public Company Limited

Name of Directors and Executive

Amount of Shareholding Subsidiaries

ORGANIZATION CHART

Board of Directors of the Company

Human Resources and Remuneration Committee

Audit Committee

Risk Management Committee Internal Audit Division Internal Audit Department

Managing Director

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Managing Director Office

Corporate Secretary Department

Deputy Managing Director Business Ventures

Business Management Division Business Development Department

Strategic Planning Department

Information System Development Department

Computer and Network Operations Department

Accounting Division

General Accounting Management Accounting Department and Budgeting Department

Investor relations Department

Finance Division

Finance Planning and Management Department

Compliance Department

General Administration Division Procurement and Services Department

Public Relations Department

Legal Department

Administration and Human Resources Department

Annual Report 2004

Tresury Department

Ratchaburi Electricity Generating Holding Public Company Limited

Deputy Managing Director Accounting and Finance

MANAGEMENT STRUCTURE

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Board of Directors

The Board of Directors is composed of 13 persons, as follows : No. Names of Directors Positions 1. Mr. Cherdpong Siriwit - Chairman of the Board (Independent Director) Holding office for 2nd term - Chairman of the Human Resources and Remuneration Committee 2. Mr. Viravat Chlayon - Independent Director Holding office for 2nd term - Member of the Audit Committee - Chairman of the Risk Management Committee 3. Mr. Pala Sookawesh - Director Holding officer for 1st term 4. Mr. Kumphuy Jirararuensak - Director Holding office for 2nd term - Member of the Human Resources and Remuneration Committee 5. Mr. Narongsak Vichetpan - Director Holding office for 2nd term 6. Mr. Viroj Klangboonkrong - Independent Director Holding office for 1st term - Member of the Audit Committee - Member of the Risk Management Committee 7. Mr. Sujarit Patchimnun - Director Holding office for 1st term 8. Mr. Suchart Thada-Thamrongvech - Independent Director Holding office for 1st term - Chairman of the Audit Committee - Member of the Risk Management Committee 9. Mr. Areepong Bhoocha-oom - Independent Director Holding office for 2nd term - Member of the Human Resources and Remuneration Committee - Member of the Audit Committee 10. Mr. Chanin Vongkusolkit - Director Holding office for 1st term 11. Mr. Boonchoo Direksathapon - Director Holding office for 3rd term - Managing Director 12. Mr. Chulasingh Vasantasingh - Director Holding office for 1st term 13. Mr. Kraisi Karnasuta - Director Holding office for 1st term

The Board of Directors shall be appointed by the approval of the Shareholdersû Annual General Meeting. Except when the vacancy occurs because of the Director resignation, or any reason other than completing the term of directorship. The appointment on the new Directors can be made by the approval of the Board of Directors meeting. In every Shareholdersû Annual General Meeting, the Directors who have been in the position the longest shall resign by rotation in the portion of one-third of the Board of Directors. The Directors who resign by rotation can be re-elected as a replacement on the vacant positions. However, each Director cannot be elected as the Companyûs Director for more than 3 terms (3 years per term), and the age of each Director must not exceed 72 years old. The Chairman of the Board of Directors must be neither a non-executive Director nor the Managing Director, and must be elected by the approval of the Board of Directors. As the shareholdersû representatives, the Board of Directors of the Company has duties and responsibilities in managing the Companyûs businesses, determining policies, making review on and approval to the policies and action plans. At the same time, the Board of Directors also has duties on monitoring and controlling the operations of Management in consistent with the imposed policies, in order to create the highest efficiency and effectiveness to achieve the Companyûs objectives under the framework of laws, the Companyûs regulations, resolutions of shareholdersû meeting, related rules, and business ethics.

Annual Report 2004

By the definition states in the regulations of the Company, the Independent Directors mean the Directors who are not the representatives of the major shareholders. They are non-executive Directors (presently, the Company does not have the Executive Committee), nor the employee or salary-paid advisor of the Company. Each of them cannot hold more than 0.5 percent of the registered and paid-up capital of the Company, or of the Companyûs subsidiaries, or of the Companyûs affiliations, or of the Companyûs joint ventures, or any related entities. In other words, the Independent Directors work independently from the influence of the major shareholders, the executive management, and related persons. The Companyûs operations will be free from the conflict of interest, and the interests of all shareholders are equally protected. The Independent Directors are able to attend the Board of Directors Meeting in order to make the decision on the Companyûs important activities. Therefore, the nomination of the Independent Directors, the Company strictly followed by the nomination process of the Board of Directors and top management, as details stated in page 28 Of the 13 members of the Board of Directors, 5 Directors are qualified to be the Independent Directors accordingly to the aforesaid definitions: 1) Mr. Cherdpong Siriwit 2) Mr. Suchart Thada-Thamrongvech 3) Mr. Viravat Chlayon 4) Mr. Viroj Klangboonkrong 5) Mr. Areepong Bhoocha-oom The Independent Directors have duties to give consideration with independent discretion, in order to ensure that the Companyûs policy, action plans, and management are duly and properly implemented and carried out in compliance with laws, regulations, goals, and resolution of the shareholdersû meeting. Thereof, it guarantees the equal protection for the benefits of all shareholders.

Ratchaburi Electricity Generating Holding Public Company Limited

Independent Directors

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Audit Committee

The Audit Committee of the Company composes of 4 Independent Directors whose abilities, experiences, and qualifications meet the requirements regulated by the SET. The member of the Audit Committee must be appointed by the approval of the Board of Directors, where the Secretary of the Audit Committee will be selected from the Executive Management of the Company. The current members of the Audit Committee are 1) Mr. Suchart Thada-Thamrongvech Chairman of the Audit Committee 2) Mr. Viravat Chlayon Member of the Audit Committee 3) Mr. Viroj Klangboonkrong Member of the Audit Committee 4) Mr. Areepong Boocha-oom Member of the Audit Committee 5) Mr. Thoedpan Indramaha Director of the Internal Audit Division, serving as the Secretary of the Audit Committee In compliance with the Regulations of the Company stipulated by the Board of Directors, the Audit Committee has authorized duties to audit the financial statements of the Company for accuracy and adequacy, and to monitor and control the efficiency of the internal controlling and auditing system. Also, they have duties to review and control the Companyûs operation in compliance with the Securities and Exchange Acts, the regulations of the SET, and other related laws. According to its duties, the Audit Committee has authority to invite Directors, employees, or hired workers of the Company to participate, give opinion, clarify, or answer the questions in the framework of the duties of the Audit Committee. In necessary case, the Audit Committee has authorized duties to consult with the experts, the Companyûs advisors (if any), or use the Companyûs budget to hire the external expert for the appropriate advice. The Audit Committee also has duty on selecting, nominating and proposing the auditing fees to the Board of Directors, and later to the Shareholdersû Annual General Meeting for appointment of the Companyûs and its subsidiariesû auditor. For the year 2004, PricewaterhouseCoopers ABAS Limited is appointed to be the Companyûs and its subsidiariesû auditor with the auditing fee totaling 1,300,000 baht which the auditing fee was fixed at 400,000 baht exclusively for the Company, comprising the auditing fee of 370,000 baht and other expenses of 30,000 baht. The Company hired PricewaterhouseCoopers ABAS Limited for working as the auditor only. The Audit Committee also takes duties in considering the appropriation and the accuracy of disclosure on any transaction of the Company, especially in the connected transaction that may occur from the conflict of interests. Moreover, the Audit Committee is responsible for preparing the report of the Audit Committee, which must be signed by the Chairman of the Audit Committee and disclosed in the Companyûs Annual Report page 73. Besides, the Audit Committee plays the key role in monitoring and reviewing the performance of the Internal Audit Division in various areas, including consideration for the approval on the scope of work, the auditing plan, the budgeting plan, and the human resources plan, based on the job duties and responsibilities. Moreover, the Audit Committee is responsible for the consideration on the appointment, transferring, or dismissal of the Director of the Internal Audit Division. During the Year 2004, the Companyûs Audit Committee had arranged 4 meetings, which all the members of the Audit Committee attended each meeting consistently.

Human Resources and Remuneration Committee The Human Resources and Remuneration Committee composes of 3 Directors who appointed by the approval of the Companyûs Board of Directors, where the Secretary of the Committee will be selected from the Executive Management of the Company. The current members of the Committee are 1) Mr. Cherdpong Siriwit Chairman of the Human Resources and Remuneration Committee 2) Mr. Kamphuy Jirararuensak Member of the Human Resources and Remuneration Committee

3) Mr. Areepong Bhoocha-oom

Member of the Human Resources and Remuneration Committee 4) Ms. Vajana Angsukomutkul Deputy Managing Director-Accounting and Finance, serving as the Secretary of the Human Resources and Remuneration Committee According to the regulations of the Company stated by approval of the Board of Directors, the Human Resources and Remuneration Committee has authorities and duties on managing human resources and determining compensation and remuneration of the Board of Directors, the Directors of the subcommittees, and the top management of the Companyûs group. Besides, the Committee is responsible for maintaining the appropriateness of the Board of Directorsû size and compositions, making the Company the responsiveness to the changes in business environment, appointing vision statements, strategic planning in the high management recruiting area, and executives development plan of the Companyûs group. The Committee also has duties to clearly set policies, rules, methods and processes of the recruitment, removal, or dismissal of the Directors and the top management of the Companyûs group in order to sustain the high qualification of the top executives with the appropriate experiences for good operation of the entire group of the Company. In the recruitment of the top executive positions, the Committee must select, and propose the list of potential nominees for the further election and appointment. Furthermore, the Human Resources and Remuneration Committee is responsible in formulating policies and strategies on compensation and remuneration for the Board of Directors and the top management of the Companyûs Group, which, afterward be proposed for the consideration of the Board of Directors. In order to maintain and motivate the high performance personnel, the Committee shall determine the remunerations and allowances by evaluating the performance appraisals, job descriptions, and responsibilities, under the clearly specified rules and framework. Another duty of this Committee is determining and formulating frameworks and guidelines for evaluating performances of the executive management of the entire business group. For comparison of the annual operation and performance outcomes laid down with the business goals for that year, the Committee also considers the responsibilities and concerned risks, as well as encourages the importance of the shareholdersû equity in the long run by taking these as the criteria for evaluating the performance of the Companyûs top executives. In necessary case, the Committee has authorized duties to consult with the experts, the Companyûs advisors (if any), or use the Companyûs budget to hire the professional experts for the appropriate advice. During the Year 2004, the Human Resources and Remuneration Committee had arranged 3 meetings, which all the members of its Committee attended each meeting consistently.

Annual Report 2004

Risk Management Committee composes of 3 Directors who appointed by the Board of Directors, while the Secretary of the Committee shall be selected from the top management of the Company. The current members of the Risk Management Committee are 1) Mr. Viravat Chlayon Chairman of the Risk Management Committee 2) Mr. Suchart Thada-Thamrongvech Member of the Risk Management Committee 3) Mr. Viroj Klangboonkrong Member of the Risk Management Committee 4) Mr. Thoedpan Indramaha Director of the Internal Audit Division, serving as the Secretary of the Risk Management Committee According to the Regulations of the Company, approved by the Board of Directors, the Risk Management Committee has authorities and duties to consider, screen, and present the Board of Directors for the approval on the Companyûs Risk Management policies and guidelines, which covered all the potential risks such as financial risks, investment risks, internal and external environment risks, in accordance with the implementation of the Risk Management strategies and policies. Under the duties and responsibilities, the Risk Management Committee has authority to invite directors and/or employees to participate, consult, explain or answer the questions in the framework of the duties of the Committee. In necessary case, the Committee has authorized duties to consult with

Ratchaburi Electricity Generating Holding Public Company Limited

Risk Management Committee

the Companyûs experts, or advisors (if any), or use the Companyûs budget to hire the external experts, or advisors for the appropriate advice. Furthermore, the Committee has set up a working group as the mechanism for monitoring and controlling the risk management on the Companyûs operations. The working group is responsible for identifying, auditing, and examining all potential risks on the operations, studying and analyzing both internal and external risk factors that affect the Companyûs activities, proposing guidelines as well as preparing reports on risk management to be submitted to the Risk Management Committee for consideration. During the Year 2004, the Risk Management Committee had arranged 2 meetings, which all the members of its Committee attended each meeting consistently.

Authorized Directors on Behalf of the Company The Company obliges that the Authorized Directors who have authority to sign on behalf of the Company must not be the Independent Directors. Therefore, the Authorized Directors are either Mr. Cherdpong Siriwit, Chairman of the Board, or Mr. Boonchoo Direksathapon, Managing Director, signing his name and affixing the Companyûs seal. Likewise, any two of the following seven persons, namely Mr.Pala Sookawesh, Mr.Sujarit Patchimnun, Mr.Narongsak Vichetpan, Mr.Kumphuy Jirararuensak, Mr. Chulasingh Vasantasingh, Mr.Chanin Vongkusolkit, or Mr.Kraisi Karnasuta, who jointly sign their names and affix the Companyûs seal can enforce on the behalf of the Company.

Nomination of the Board of Directors and the Management

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

In order to ensure that the Company and its business group have the experienced, skilful, and competent Directors and the most qualified top management, the Company had increased the responsibilities of çthe Remuneration Committeeé to cover the formulating and implementation of the policies, rules, methods, and procedure in human resources management and remuneration for the Directors and top management. The Remuneration Committee was renamed as çthe Human Resources and Remuneration Committeeé, which has duties to consider the qualifications, competency, skills and experiences of the potential nominees, along with the job description to ensure the most beneficial for the Company. On each appointment of the Directors, Human Resources and Remuneration Committee shall screen the nominees by considering the overall picture of the Board of Directors; the diversity in ages, skills, and expertise that benefits to the organization, time, effort, and dedication on their duties, in order to build the vigorous Board of Directors. The Human Resources and Remuneration Committee shall propose the opinion of selection and nomination to the Companyûs Board of Directors for further consideration, election, and appointment in the position of Directors and top management.

SHAREHOLDING STRUCTURE

Ratchaburi Electricity Generating Company Limited

99.99%

Tri Energy Company Limited

37.5% Ratchaburi Gas Company Limited

99.99%

99.99% Ratchaburi Alliances Company Limited

99.99% Ratchaburi Energy Company Limited

RPC Ratchaburi Power Company Limited

99.99%

25% Siam Ethanol Exports Company Limited

15%

Annual Report 2004

Ratch Udom Power Company Limited

Ratchaburi Electricity Generating Holding Public Company Limited

THE COMPANY没S TOP TEN SHAREHOLDERS The Top 10 shareholders of Ratchaburi Electricity Generating Holding Public Company Limited (as at September 27, 2004) Electricity Generating Authority of Thailand

45.00%

2.68% Social Security Office 2.39% State Street Bank and 1.03% EGAT Employee没s Provident Fund

Trust Company Group

Government Saving Bank 2.62% American International 1.21% Assurance Company Limited Group

HSBC Group

1.21%

Government Pension Fund N.C.B. Trust Limited Group

0.75% 0.64%

14.99% Banpu Public 27.48%

Company Limited Group Ordinary Shareholders

Shareholding Distribution According to Nationality No. of Shares Thai Shareholders Foreign Shareholders Total

1,240,142,428 209,857,572 1,450,000,000

85.53 14.47 100.00

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Source: Thailand Securities Depository Company Limited

Note: On November 17, 2004 Banpu Public Company Limited. purchased 106,508,000 shares from Banpu Power International Limited (the foreign Company in Banpu Public Company Limited Group), proportionally equivalent to 7.35% of the total of Company没s shares that were registered in the Stock Exchange of Thailand (SET). This resulted the decreasing of foreign shareholders proportion from the original of 14.47% down to 7.12%. However, the total shareholding proportion of Banpu Public Company Limited Group has still remained the same at the proportion of 14.99%.

THE COMPANYûS TOP TEN SHAREHOLDERS The Top 10 major shareholders of Ratchaburi Electricity Generating Holding Public Company Limited (as of September 27, 2004)

Name

1 2

652,500,000 217,400,000

45% 14.99%

38,849,696

2.68%

38,000,000 34,583,900

2.62% 2.39%

17,551,500

1.21%

17,521,600

1.21%

14,929,800

1.03%

10,927,200

0.75%

9,282,900

0.64%

1,051,546,596 398,453,404 1,450,000,000

72.52% 27.48% 100.00%

106,508,000 3,792,000 107,100,000 17,941,196 20,908,500

34,274,000 115,800 194,100 5,198,600 4,700,000 4,700,000 2,952,900 6,498,600 132,900 24,000 1,905,700 8,821,600 138,800 11,969,700 469,200 2,490,900 1,111,000 1,380,000 1,392,900 7,043,300 22,900 9,260,000

Order 1: The Electricity Generating Authority of Thailand (EGAT) is a state-owned enterprise in the Ministry of Energy, operating business in electricity field and investing solely and jointly in other related businesses. EGAT is the largest shareholder of the Company, with the 7 Representatives in the Companyûs Board of Directors of 13 persons. Order 2: The Group of Banpu Public Company Limited (Banpu) is the group of companies that engaged in core business on coal and electricity in domestic and abroad, with Vongkusolkit family and related companies as its major shareholder. Banpu has its 1 representative in the Companyûs Board of Directors of 13 persons. Order 3: The EGATûs Provident Fund was established by the Fund Committee, which composes of the representatives from both sides of employer and employee of EGAT, Ratchaburi Electricity Generating Holding PCL., Ratchaburi Electricity Generating Co., Ltd., and Ratchaburi Power Co., Ltd. that impose policies for the management of the fund. Order 4: Government Savings Bank, a state-owned bank, currently is the Creditor of the Companyûs subsidiary, the Ratchaburi Power Co., Ltd., with the principal outstanding as at December 31, 2004 of 2,781 million baht.

Annual Report 2004

ELECTRICITY GENERATING AUTHORITY OF THAILAND (EGAT) BANPU GROUP OF COMPANIES BANPU POWER INTERNATIONAL LIMITED BANPU PUBLIC COMPANY LIMITED BANPU POWER COMPANY LIMITED 3 EGAT EMPLOYEEûS PROVIDENT FUND EGAT EMPLOYEEûS PROVIDENT FUND BY SIAM COMMERCIAL BANK PLC. EGAT EMPLOYEEûS PROVIDENT FUND BY BANK THAI PLC. 4 THE GOVERNMENT SAVINGS BANK 5 SOCIAL SECURITY OFFICE SOCIAL SECURITY OFFICE SOCIAL SECURITY OFFICE BY KASIKORN ASSET MANAGEMENT CO.,LTD. 2 SOCIAL SECURITY OFFICE BY ONE ASSET MANAGEMENT LIMITED 2 6 AMERICAN INTERNATIONAL ASSURANCE COMPANY LIMITED GROUP AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED-AIA1 AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED-AIA2 AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED-AIA5B AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED-AIA5E 7 HSBC GROUP HSBC (SINGAPORE) NOMINESS PTE LTD HSBC ASSET MANAGEMENT (SINGAPORE) LIMITED HSBC BANK PLC HSBC BANK PLC A/C GARTMORE EMERGING MARKETS OPPORTUNITIES FUND HSBC BANK PLC-CLIENTS GENERAL A/C HSBC BANK PLC-STATE STREET TRUSTEELS LTD. AS DEPOSITORY FOR HSBC INVESTMENT FUNDS ICVC BALANCED FUND 8 STATE STREET BANK AND TRUST COMPANY GROUP STATE STREET BANK AND TRUST COMPANY STATE STREET BANK AND TRUST COMPANY, FOR CANADA STATE STREET BANK AND TRUST COMPANY, FOR LONDON 9 GOVERNMENT PENSION FUND GOVERNMENT PENSION FUND BY KASIKORN ASSET MANAGEMENT CO.,LTD. GOVERNMENT PENSION FUND BY BoA ASSET MANAGEMENT CO.,LTD. GOVERNMENT PENSION FUND BY AYUDHAYA JF ASSET MANAGEMENT CO.,LTD. GOVERNMENT PENSION FUND 10 N.C.B. TRUST LIMITED GROUP N.C.B. TRUST LIMITED-GENERAL ITALIAN RESIDENTS-TREATY A/C CLIENT N.C.B. TRUST LIMITED-UBS AG LONDON BR-IPB CLIENT AC TOTAL TOP 10 SHAREHOLDERS ORDINARY SHAREHOLDERS TOTAL

Number of Shares % of Shareholding

Ratchaburi Electricity Generating Holding Public Company Limited

No.

çRatchaburi Power Plantûs Community Development Projecté

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

is a 5-year scheme which includes 8 activities including Ratchaburirom Park as the community gathering center, Village Bank and Revolving Loan Fund for income generation, Community Development, Bangpa Cannel Preservation, Health and Sanitary Promotion, Strengthening competency of people involved the project, Educating Social and Political affairs to the communities, and Publicity of the project.

Mr. Choo Onntong, owner of shrimp farm Ban Hua Sa Noon, Ban Rai Sub-District Damnern Saduak District Ratchaburi Province

NATURE OF BUSINESS Ratchaburi Electricity Generating Holding Public Company Limited was established on March 7, 2000. It has registered and paid-up share capital of 14,500 million baht with its nature of business operation engaging in investment in other companies. At present, the Company holds a 99.99 percent stake in 5 subsidiaries namely Ratchaburi Electricity Generating Company Limited, Ratchaburi Energy Company Limited, Ratchaburi Gas Company Limited, Ratch Udom Power Company Limited and Ratchaburi Alliances Company Limited. The Company没s core revenues derived from dividends from its major subsidiary which is Ratchaburi Electricity Generating Company Limited. In this regard, the Company has set clear corporate strategies and directions to facilitate its development goals and expansion in businesses, mainly by focusing on investing in power generation and related businesses. The Company will also provide adequate financial supports for their operations including taking part in formulating policies and monitoring the performance of its invested companies.

Subsidiaries

2. Ratchaburi Energy Company Limited Ratchaburi Energy Company Limited was established on September 4, 2001 with current registered and paid-up capital of 190 million baht by which the Company holds a 99.99 percent stake. Its objective is to focus on investment in the power generating and related businesses, especially in the power generation by using renewable energy in accordance with the Company没s goals, operation plans and government没s policy of Renewable Portfolio Standard (RPS), aiming to create added value to the Company没s shareholders and society.

Annual Report 2004

Ratchaburi Electricity Generating Company Limited was established on March 20, 2000 by which the Company holds a 99.99 percent stake, with current registered and paid-up capital of 18,275 million baht incorporated to power generation. Its power plant is located in Ratchaburi Province on an area of 2,158 rai covering 3 districts namely Damnern Saduak district, Photaram district and Muang district. The Ratchaburi Power Plant has employed state-of-the-art technology for production,using natural gas from the Yadana and the Yetakun sources in the Union of Myanmar as its primary fuel for electricity generation. There are 2 types of Ratchaburi Power Plant comprising: 1. Thermal Power Plant Units 1-2 with an installed capacity of 735 MW each and a total capacity of 1,470 MW, using natural gas as their primary fuel and bunker oil as secondary source. 2. Combined - Cycle Power Plant Blocks 1-3 with an installed capacity of 725 MW each and a total capacity of 2,175 MW, using natural gas as their primary fuel and diesel as secondary source. Currently, Ratchaburi Electricity Generating Company Limited is the largest Independent Power Producer (IPP) in Thailand with a total installed capacity of 3,645 MW.

Ratchaburi Electricity Generating Holding Public Company Limited

1. Ratchaburi Electricity Generating Company Limited

Currently, Ratchaburi Energy Company Limited has invested in renewable energy and other energy businesses, which are; 2.1 Alcohol manufacturing plant project Ratchaburi Energy Company Limited has signed the agreement to hold 15 percent stake of the total shares of Siam Ethanol Exports Company Limited on September 23, 2004. The project will construct the alcohol manufacturing plant at Ban Khai Rayong Province with its production capacity of 30 million liters per year. The production is scheduled to commencing in early 2005. 2.2 Small hydro power generator project installing at the rear of the irrigation dam The small hydro power generator at the rear of irrigation dam installation project is an on going project. Currently, the company has 4 projects on hand namely Pasak Chonlasit Dam, Chao Phraya Dam, Khlong Tha Dan Dam and Narasuan Dam, and all are waiting for the concession from the Royal Irrigation Department under the Ministry of Agriculture and Cooperatives.

3. Ratchaburi Gas Company Limited Currently, the Company holds a 99.99 percent stake in Ratchaburi Gas Company Limited. It has current registered capital of 500 million baht and holds a 37.5 percent stake in Tri Energy Company Limited, an operator of 700 MW Gas-Fired Combined-Cycle Power Plant. The investment increased 262.5 MW capacity for the Company没s portion. In 2004, Ratchaburi Gas Company Limited received the interim dividend in June and December at the amount of 104.51 million baht and 137.12 million baht respectively.

4. Ratch Udom Power Company Limited Ratch Udom Power Company Limited was established on November 20, 2003 with current registered capital of 420 million baht by which the Company holds a 99.99 percent stake. Its objective is to invest in electricity generation business. At the present, Ratch Udom Power Company Limited holds a 99.99 percent stake in Ratchaburi Alliances Company Limited.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

5. Ratchaburi Alliances Company Limited

Ratchaburi Alliances Company Limited was established on January 9, 2004 with current registered capital of 420.20 million baht. Its objective is to invest in electricity generation business. It holds a 25 percent stake in Ratchaburi Power Company Limited, which has invested in 2 Blocks of Gas-Fired Combined-Cycle Power Plant Project with each installed capacity of 700 MW and a total capacity of 1,400 MW, giving an increased capacity of 350 MW for the Company没s portion. The Power Plant is located at the same site of Ratchaburi Power Plant. The Power Plant Block 1 and 2 are scheduled to operate in March and June 2008 respectively.

Associated Companies 1. Tri Energy Company Limited It carries on power generation business by employing a 700 MW Combined Cycle Power Plant, situated in Muang district of Ratchaburi Province, using natural gas as its primary fuel. The Tri Energy Power Plant started commercial operations on July 1, 2000 by selling electricity to EGAT under a 20-year Power Purchase Agreement (PPA). At present, there are 3 major shareholders namely Texaco Thailand Energy Company Limited, holding a 37.5 percent stake; EME Tri Gen B.V., holding a 25 percent stake; and Ratchaburi Gas Company Limited, holding a 37.5 percent stake.

2. Ratchaburi Power Company Limited It is an Independent Power Producer (IPP), which carries on power generation business by selling electricity to EGAT under a 25-year PPA. Ratchaburi Power Company Limited has 2 Blocks of Combined-Cycle Power Plant with an installed capacity of 700 MW each and a total capacity of 1,400 MW,

using natural gas as their primary fuel. The Power Plants Block 1 and 2 are situated at the compound of the Ratchaburi Power Plant and scheduled to operate in March and June 2008 respectively. The major shareholders are namely Union Energy Company Limited, holding a 10 percent stake; Chubu Electric Power Company International B.V., holding a 15 percent stake; Toyota Tsusho Corporation, holding a 10 percent stake; Hong Kong Electric International Power (Mauritius) Limited, holding a 25 percent stake; PTT Public Company Limited, holding a 15 percent stake; and Ratchaburi Alliances Company Limited, holding a 25 percent stake.

3. Siam Ethanol Exports Company Limited Its registered capital is 300 million baht. It is authorized to construct the alcohol manufacturing plant for export with the production capacity of 30 million liters per year. The plant is located in Rayong Province. The shareholder structure consists of Mr. Krittipongse Phatcharapinyopong, holding at 21 percent stake; Mr Suwan Lertpunyaroj, holding a 15 percent stake; Ve Wong Corporation, holding a 49 percent stake; and Ratchaburi Energy Company Limited, holding a 15 percent stake.

Revenue Structure of the Company, Subsidiaries, and Associated Companies in 2004 The Company没s core revenues derive from dividends paid by Ratchaburi Electricity Generating Company Limited. The revenue structure of the Company is under the Power Purchase Agreement (PPA) of Ratchaburi Power Plant, which can be divided into two main parts as follows;

1. Availability Payment (AP) Availability Payment is designated to cover all fixed costs, for instance, fixed operating expenses, maintenance expenses, administrative expenses, debt servicing and interest expenses, and return on investment for shareholders. In general, the Availability Payment depends on the availability of the Power Plant in generating and distributing the electricity whether EGAT commands its power generation or not.

2. Energy Payment (EP)

Annual Report 2004

In respect of the revenue structure of the associated company which is Tri Energy Company Limited by which Ratchaburi Gas Company Limited holds a 37.5 percent stake. Its revenue can be divided into 2 parts which are AP and EP (the same structure as of Ratchaburi Electricity Generating Company Limited). The AP covers the part of all investments and fixed costs such as operation and maintenance expenses, and etc. whereas its EP is of similar nature as that of Ratchaburi Electricity Generating Company Limited. Ratchaburi Energy Company Limited holds a 15 percent stake in Siam Ethanol Exports Company Limited, which has the alcohol production capacity of 30 million liters per year and is authorized to construct the alcohol manufacturing plant for export. The company没s revenue structure depends on 99.5 percent purified alcohol for export solely, while benchmark selling price bases on alcohol prices in the world market. The Plant is scheduled to commencing in the early of 2006.

Ratchaburi Electricity Generating Holding Public Company Limited

Ratchaburi Electricity Generating Company Limited will receive the energy payments when it generates electricity and distribute it to the EGAT没s power transmission system. In this regard, the Energy Payment consists of two important components namely; 1. Fuel Payment 2. Variable Operating and Maintenance Payment

Revenue Structure of the Company in 2003-2004 Type of Revenue

Company

Company没s Shareholding %

Electricity Sales Ratchaburi Electricity - Availability Payment (AP) Generating Co., Ltd. - Energy Payment (EP) Sales of Service

Ratchaburi Electricity Generating Holding PCL.

Equity in net income of the joint-venture businesses

Tri Energy Co., Ltd. Ratchaburi Power Co., Ltd. Siam Ethanol Exports Co., Ltd.

Interests Income

Ratchaburi Electricity Generating Holding PCL. Ratchaburi Electricity Generating Co., Ltd. Ratchaburi Energy Co., Ltd. Ratch Udom Power Co., Ltd.

Others

Ratchaburi Electricity Generating Holding PCL. Ratchaburi Electricity Generating Co., Ltd. Ratchaburi Energy Co., Ltd. Total Revenues

Revenue 2004

2003

Million Baht

11,418.17 28,295.86

28.25 70.01

11,897.43 23,630.88

33.23 66.00

29.53

0.07

2.22

0.01

37.50 25.00 15.00

442.11 (34.05) (0.16)

1.09 (0.08) (0.00)

94.52 -

0.26 -

99.99 99.99 99.99

34.25 118.94 2.42 0.28

0.08 0.29 0.01 0.01

22.64 128.21 2.60 0.07

0.06 0.36 0.01 -

99.99 99.99

0.12 108.95* 0.01

0.00 0.27 0.00

0.10 24.96 0.07

0.07 -

99.99

40,416.43 100.00

35,803.70 100.00

* The Warranty Claim totaled at Baht 81.75 Million

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

The Dividend Payment Policy of the Company and its Subsidiaries

The Company has set the dividend payment policy at the minimum rate of 40 percent of its net profit after deducting the legal and other reserve requirement. In 2003 and 2004, the Company had paid the dividend to its shareholders at the rate of 48.4 and 49.2 percent respectively. Ratchaburi Electricity Generating Company Limited has the policy to pay the dividend to the Company at the rate of 100 percent of its net profit after deducting the legal and other reserves.

TH E I N D U S TR Y A N D C O MP ETI TI O N In respect of clear government boosting economics growth plan amidst the outbreaks of SARS and Bird flu, gasoline price volatility, and chaos in the Southern of Thailand; brought the 6-6.5 percent positive economics growth rate whilst the electricity consumption increased in parallel.

1. Electricity Consumption and Electricity Generation Situation As of September 30, 2004, EGAT had an installed capacity of 25,969 MW. The peak demand was on March 30, 2004 at 19,325.8 MW, increasing 1,204.4 MW or 6.65 percent compared with last year. The total electricity generation and electricity purchase of EGAT was 125,325.62 million units, increased by 8,582.17 million units or 7.35 percent comparing last year.

2. Importance situation in 2004

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Average increase 2004-2008 2009-2013 2014-2015

1,585 2,025 2,403

7.5 6.8 6.4

Annual Report 2004

Year

Forecast of the Power Consumption Demand in case of the Medium Economic Recovery Increase Megawatts Megawatts % 19,600 1,479 8.2 21,143 1,543 7.9 22,738 1,595 7.5 24,344 1,606 7.1 26,048 1,704 7.0 27,852 1,804 6.9 29,808 1,956 7.0 31,844 2,036 6.8 33,945 2,101 6.6 36,173 2,228 6.6 38,515 2,342 6.5 40,978 2,463 6.4

Ratchaburi Electricity Generating Holding Public Company Limited

2.1 The Thailand Load Forecasting Sub-Committee announced the adjustment report on electricity demand in January 2004. Details are as follows;

2.2 The EGATûs Board of Directors approved the Power Development Plan çPDP 2004é on May 28, 2004 2.3 The National Energy Policy Council (NEPC) approved the concept of Power Development Plan çPDP 2004é on July 28, 2004 2.4 The cabinet approved the resolution on Power Development Plan çPDP 2004é on August 24, 2004 The details of the Power Development Plan are as follows;

Thailandûs Power Development Plan PDP 2004

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Year

Power Plant

Installed capacity to December 2004 2005 Small Private Power Producer (SPP) 2006 2007 BLCP Power Co., Ltd. Unit 1 and 2 Small Private Power Producer Gulf Power Generation Co., Ltd. (additional) 2008 Songkhla Combined-Cycle Power Plant, Block 1 Gulf Power Generation Co., Ltd., Block 1 Ratchaburi Power Co., Ltd., Block 1 and 2 2009 South Bangkok Combined-Cycle Power Plant, Block 3 North Bangkok Combined-Cycle Power Plant, Block 1 2010 Purchased from Laos Project (Nam Tern 2) Bang Pakong Combined-Cycle Power Plant, Block 5 Renewable Energy Power Plant 2011 New Power Plant and RPS* Khanom Thermal Power Plant removal, Unit 1 2012 New Power Plant and RPS* 2013 New Power Plant and RPS* 2014 New Power Plant and RPS* 2015 South Bangkok Thermal Power Plant removal, Unit 1 and 2 New Power Plant and RPS* Production capacity since December, 2004 Total of the increasing production capacity Power Plants to be removed from the system Total of the production capacity to 2015

Production Capacity (Megawatts)

Peak Demand (Megawatts)

26,352.2 20.2 1,346.5 163.7 700 700 700 1,400 700 700 920 700 175 2,940 -75 2,205 2,205 2,940 -400 2,940

Minimum Reserved Power Production Capacity %

21,143 22,238 23,844

19.9 13.7 15.3

25,548

15.5

27,352

15.9

29,308

14.3

31,344

14.4

33,445 35,673 38,015 40,478

15.3 14.3 14.6 14.2

26,352.20 21,455.40 -475.00 47,332.60

Megawatts Megawatts Megawatts Megawatts

Source : EGAT *Note : RPS refers to Renewable Portfolio Standard as details in Clause 3.2

2.5 EGAT has received an approval to construct the new power plants with additional total generating capacity of 2,880 MW. They are scheduled to commencing in 2008-2010. 2.6 The Companyûs Board of Directors has approved Ratchaburi Alliances Company Limited to hold a 25 percent stake in Ratchaburi Power Company Limited in order to invest in 1,400 MW power generating project. It is scheduled to commence operation in 2008. 2.7 The Board of Directors of Ratchaburi Energy Company Limited has passed the resolution in holding a 15 percent stake in Siam Ethanol Exports Company Limited to construct the 99.5 percent alcohol manufacturing plant. It is scheduled to commencing in 2006. 2.8 The world gasoline price has been in upward trend since beginning of the year from USD 28.22 per barrel to USD 40 per barrel and peak at USD 48.44 in November. Consequently, the natural gas which is the core fuel in generating electricity cost, increased in parallel with gasoline price.

3. Important Electricity Policy 3.1 The Ministry of Energy set up the organization and the Electricity Regulatory Commission to regulate the electricity generating businesses, which have the responsibilities as follows; To supervise service charge rate of the electricity operator under the guideline, rules, methods, and conditions, imposed by the National Energy Policy Committee. To supervise performance of the electricity operator, emphasizing in good corporate governance, promotion and enhancement of efficiency in electricity affairs. To impose and supervise business standard and safety in electricity affairs, standard and quality in services, including measures for protecting the electricity users and the person who has got difficulties from business operation, and consideration of complaints, appeals from electricity users and operators or person who has got difficulties from operating businesses. To compose and advise on electricity demand forecast, procurement plan for electricity and option in fuel use in the generation of electricity in the country and abroad, and expansion plan for electricity network. To tender announcement on electricity purchase and impose rules and methods in the assessment and selection of such proposals, including implementation of the selection on electricity generators under the imposed rules and methods. 3.2 The Ministry of Energy has set the proportion of electricity generation or procurement under the Renewable Portfolio Standard (RPS) by Independent Power Producer who uses fossil fuel as per the Power Regulatory Commission approval, must generate or acquire electricity from renewable energy according to specified proportion (currently, at a rate of 5 percent). Renewable energy under RPS scheme is energy from solar cell, wind, garbages small hydro power plant of irrigation dams, biogas and agricultural waste, and etc. 3.3 The government has carried out the policy to privatize the Electricity Generating Authority of Thailand (EGAT), the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA) to be a mechanism in ensuring competition in power generation and power distribution and retailing, together with increasing the capital raising ability from capital market and enhancing management flexibility. The competition of power industry in the future will be intensified by government policy in building the competitive mechanism to ensure quality, efficiency and stability to the power generation industry. ●

●

Annual Report 2004

Ratchaburi Electricity Generating Holding Public Company Limited

●

RISKS FROM BUSINESS OPERATION The Companyûs Board of Directors has agreed that when operating its business the Company may experience a variety of risk factors. To meet the international standards of risk management through good corporate governance, which will accordingly lead to customer satisfaction and preferable gains for shareholders and all stakeholders, the Companyûs Board of Directors has set the philosophy and policy for risk management as follows;

Risk Management Philosophy çThe Company is confident and aware of the importance of effective risk management and control, which will enable the Company to run its business with stability, continuity, and an acceptable level of risk. It is used as management tool to enhance the Companyûs success opportunity as much as possible, while minimizing the possibility of failure and loss, and reduce the uncertainty in the Companyûs overall performance. All these will help the Company achieve all its objectives.é

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Risk Management Policy

1. Promoting the culture of risk management to stimulate understanding, conscience and responsibility concerning risk, control, and the effect of risk on the Company in the process of management and operations throughout the Company. 2. Having in place sufficient and accepted international standard process, framework and measures for indicating, assessing, ranking, managing, controlling, following up, reporting, evaluating, and communicating the information of risks continuously, regularly and across the board in the Company. 3. Measuring the risk both in terms of quality, such as the Companyûs reputation and image, and in terms of quantity, such as loss, revenue decrease, and expense increase based on the possibility that could happen and affect the Company. 4. Setting risk limit at level that the Company accepted to control the level of damage, and also identifying circumstances and risk degrees that are warning sign for the operators to manage risk under control level. 5. Setting written operational regulations for executives and operators to abide by in order to control the operational risk. The Companyûs Board of Directors has appointed the Risk Management Committee comprising three directors who are in charge of screening policy, setting strategies and risk management framework, controlling, following up, maintaining risk level, and effectively managing risks of the whole organization.

The Risk Management Committee has agreed to define the Company没s risks into four categories as follows; 1. Financial risk that is the risk from the lack of cash flow/liquidity and sufficiency and timeliness of available funds for investment. 2. Investment risk that is the risk from the investment in each project. 3. Internal environment risk that is the risk from the operational mistake or insufficient reporting on the operational process. 4. External environment risk that is policy-wise risk from stakeholders, individual investors, securities analysts and the community nearby the power plant.

Financial Risk 1. Financial Liquidity

The interest rate of long-term loan of Ratchaburi Electricity Generating Company Limited is floating rate. According to the Power Purchase Agreement (PPA) entered with EGAT, Ratchaburi Electricity Generating Company Limited will receive compensation for fluctuation of the interest rates from EGAT. Hence, there is no risk from interest rate volatility.

3. Exchange Rate The assorted loans and revenues of Ratchaburi Electricity Generating Company Limited are in Thai baht. For this reason, there is no risk from the currency exchange rates. Meanwhile, the loans of Tri Energy Company Limited that are in US currency, EGAT will compensate to exchange rate exposure in some amount that will be passed through the Availability Payment (AP).

Annual Report 2004

2. Interest Rate

Ratchaburi Electricity Generating Holding Public Company Limited

In financial liquidity management, the Company has taken into account the sufficiency of funds for the investment in projects and the Company没s operation by preparing the financial plans, cash flow statement, and the estimation of dividend payment from its subsidiaries and joint ventures. The business operations have been monitored closely and the financial projection and plans have been reviewed on a regular basis in order to be prepared for setting aside a fund when necessary. However, the Company has continuously monitored the money market and other financial tools, to minimize financial cost and the risk from financial liquidity.

For the imported equipment and spare parts, EGAT has compensated to the exchange rate volatility for importing cost on a part of revenue under the PPA entered with EGAT.

4. Inflation Rate The operation expense that is in Thai Baht currency under the PPA has already been compensated for the fluctuation occurring from Thai Consumer Price Index (Thai CPI). For the expenses that are in foreign currencies, such as spare parts of imported equipment, if the prices rise higher than the Manufacturing Unit Value (MUV) announced by the World Bank, Ratchaburi Electricity Generating Company Limited will receive some compensation on the price increase as stated in the PPA.

Investment Risk 1. The Analysis on Project Return

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

The Company has a policy to invest in electricity generating business and also related businesses, taking into account the return for shareholders, employees and the public. The Company has formulated operation strategies and the plan to increase productivity based on the policy set by the Company没s Board of Directors. The Company has also studied the feasibility of the investment and business-venture thoroughly, taking into account all risk factors related to the investment and project development. Moreover, the Company has seek consultancy services from experts specialized on technology, finance, and law in its project appraisal. The sensitivity analysis has been conducted in order to ensure a satisfactory return that could add value to the Company in the future.

2. The Project Development with Predetermined Budget and Time Frame The Company has made an investment through its subsidiary in Ratchaburi Power Company Limited 没s Combined-Cycle Power Plant Project, which will be constructed in the area of Ratchaburi Power Plant. Its productivity is 1,400 MW. The Company also invested through Siam Ethanol Exports Company Limited that is in the process of developing an alcohol plant project with the production capacity of 30 million litres per year. For this reason, there is a risk that the project might not be completed on time. In the case that the construction is not completed on time, the Company might have extra expenses and the construction cost might exceed the figure projected earlier. Accordingly, the Company might earn less return from the project. Nevertheless, the Company has closely followed up the project没s progress on a regular basis. A representative of the Company has been nominated as members of the Board of Directors to attend board meetings, monitoring the progress, and taking part in setting regulations and directions of the project effectively, in order to control the budget spending and carry on the construction plan. Moreover, the Company has also reviewed on certain information of its joint-venture partners, such as financial information, while making sure that policies of the allied management are in line with the Company没s investment policy through a clear statement about the roles of each partner. This is the intention to create synergy among all partners.

The Risk of Internal Environment 1. Contracted Capacity and Contracted Operating Characteristic (COC) After EGAT has tested the efficiency of its machinery to set technical characteristic and issued the

final acceptance date of each power plant, EGAT would pay Availability Payment (AP) based on contracted capacity and Contracted Operating Characteristic (COC) fee according to the test results. Ratchaburi Electricity Generating Company Limited would be in charge of maintaining both AP and COC standards. It is also liable to pay penalty if the level of AP reduces without any defect in machinery. However, to minimize the risk from the reduction of revenue from the penalties deducted by the full AP, the PPA specifies certain limitation on the penalty. It states that if the fine is less than the minimum payment (0.5% of full annual AP), the fine is not subject to be paid. At the same time, the fine shall not exceed the maximum charge (2% of full annual AP).

2. Fuel Prices The changes of natural gas prices do not affect Ratchaburi Electricity Generating Company Limited since the calculation of Energy Payment (EP) under the PPA is based on the actual prices of natural gas each month. EGAT as the purchaser will take risk from the fluctuation of energy prices. However, Ratchaburi Electricity Generating Company Limited must maintain the actual heat rate at the level lower or equivalent to the rate stated in Schedule 3 under the PPA.

3. The Heat Rate of the Facilities After EGAT has tested the efficiency of the machinery and measure the Heat Rate from the performance test, the Heat Rate specified in the PPA must include a margin. This is to compensate the depreciation of machinery in the long run which depreciation usually caused the machine to use more fuel in electricity generation. Ratchaburi Electricity Generating Company Limited, however, still has certain risk in the case that the actual Heat Rate is higher than the rate stated in the agreement.

4. Fuel Quality

For the AP specified in the PPA, the expenses in Thai baht will be adjusted according to Thai CPI and the expenses in US dollars such as expenses on imported spare parts and equipment would be adjusted according to MUV Index and changed in relation to the exchange rates. EGAT will take risk for extra expenses as specified in the PPA. Ratchaburi Electricity Generating Company Limited will hold the responsibility over the risk if the actual expenses are higher than Thai CPI or MUV Index. Nevertheless, for the expenses on imported spare parts, if the adjusted prices are higher than MUV Index, EGAT will share the responsibility for extra expenses in the proportion stated in the contract.

Annual Report 2004

5. Operation Costs

Ratchaburi Electricity Generating Holding Public Company Limited

The quality of fuel is clearly specified in the Gas Sale Agreement (GSA). In the case that PTT Plc supplies fuel with the quality lower than that specified in the GSA, Ratchaburi Electricity Generating Company Limited may refuse to accept the fuel, and PTT Plc would be treated as being unable to deliver the fuel. According to the PPA, Ratchaburi Electricity Generating Company Limited will continue to receive Availability Payment. For this reason, the company does not have any risk in the case that PTT Plc could not deliver natural gas on schedule as it does not affect AP under the PPA.

6. The Operation and Maintenance of the Power Plant According to the Power Plant Operation and Maintenance Agreement (OMA), in which Ratchaburi Electricity Generating Company Limited has outsourced to EGAT, the conditions about incentive and penalty have been appointed in order to control the EGATûs Operation based on the consideration of the key factors; AP and COC. If EGAT operation causes the Power Plant to have less AP and COC, it will be liable to pay fine to Ratchaburi Electricity Generating Company Limited as stated in the OMA. The fine may not cover lost in revenue due to the PPA. However, since EGAT is specialized and experienced in the operation and maintenance of power plants in Thailand for more than 30 years, it is not likely that such incident will take place, except that there is any accident or machinery defect.

Risks from External Environment 1. The Risk From Future Restructuring of Electricity Industry According to the Cabinet resolution on December 9, 2003, the Cabinet agreed in principle to restructure electricity industry into Enhanced Single Buyer (ESB) format to stabilize the countryûs electricity system. The ESB Structure assigned EGAT to be a main organization in charge of electricity generation and transmission, while MEA and PEA in charge of electricity distribution and retailing. The Regulator will be responsible for forecasting the demand for electricity and new power plants, formulating the regulation on electricity purchasing from the new power plants, setting electricity prices, and maintaining power plantsû service quality. The restructuring of the electricity industry may affect directly to the future direction and competition among electricity businesses. The restructuring, however, is pending the regulations on electricity purchasing from private companies that will be announced by the Electricity Regulatory Commission in 2005. Ratchaburi Electricity Generating Company Limited has a 25-year PPA with EGAT. According to the ESB Structure, EGAT is still the direct purchaser of the electricity. The restructuring of the electricity industry, therefore, will not affect the Companyûs annual revenue in any way.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

2. Political Risks

2.1The acquisition by public agency In case the Company is acquired by a public agency whether it is the acquisition on the part of the power plant or through stock acquisition, the situation will be considered the Government Force Majeure. Under the PPA, Ratchaburi Electricity Generating Company Limited still receives the AP. If the acquisition process is longer than one year, EGAT has the right to revoke the contract, but it has to pay the revocation fee equivalent to the remaining liability of the Company, retained earning, reserved funds and shareholder dividends. 2.2 Legislation changes In case of the changes of laws affect the capital, revenue, or expenses of Ratchaburi Electricity Generating Company Limited, with the extra cost exceeding amount in the PPA. EGAT and the company will discuss the adjustment of AP and the EP. If legislation changes affect the companyûs ability to abide by the PPA, the situation will be considered as an uncontrollable situation incurred by the governmentûs action. The company will still entitled to receive AP payment.

FUTURE PROJECTS

The government has restructured the electricity industry, designating EGAT as the sole generator and purchaser of electricity and as the operator of the whole electricity system. A new regulatory organization will be set up to regulate the electricity industry. EGAT and interested private power producers will be invited to compete in the bidding for the construction of new power plant projects. As a result, the Company has the opportunity to expand its electricity generation according to the country没s rising demand in the future. The Company also has an advantage edge on the fact that it has enough space in the area of Ratchaburi Power Plant for the construction of the Combined-Cycle Power Plant with 700 MW capacity. The space in the area of Tri Energy Power Plant is also enough to build another 700 MW Power Plant.

For this reason, the Company has given priority to the investment in the power plants utilizing renewable energy. It also assigned Ratchaburi Energy Company Limited to research and develop electricity generating projects from different renewable sources. The following projects are in the process of research and development:

Annual Report 2004

1. The acquisition of the stocks in the existing businesses of large and small power plants, both in domestic and abroad. 2. The investment in power plant projects that have long-term PPA both in Thailand and in other countries where the power plants constructing are under way; for example the hydro power plant project in Laos. 3. The procurement of new land plots for the Company没s new power plant projects, which will be developed to serve the rising demand for electricity in the future. 4. The investment in electricity generating businesses that use renewable energy which is in line with the government没s energy policy and strategy. The government requires new power plants that are to sell electricity to EGAT to build power plants that use renewable energy in the generation of up to 5 percent of the electricity they are selling to EGAT.

Ratchaburi Electricity Generating Holding Public Company Limited

According to the Company没s business plan approved by the Board of Directors, the Company plans to invest in electricity generating business and relevant businesses, as follows:

1) Windmill Electricity Generating Project Ratchaburi Energy Company Limited has committed in wind energy study. It has studied continuously the potential of wind energy at 40 meter height from the ground for one year and come up with the strategies and principles for future wind energy feasibility study. The company has also located areas with high potential for the installation of power generating windmill, and makes them pilot projects. It has studies patterns of windmill to find out the patterns that suit wind power in Thailand the most.

2) Biogas Electricity Generating Project To identify alternative energy from natural resources and reserve environmental conditions, Ratchaburi Energy Company Limited together with academic institutions have studied the feasibility of utilizing wastewater from industrial factories, for example, tapioca flour factories and alcohol factories in producing biogas for electricity generation. It is also studying the technology for electricity generation from biogas to develop such biogas electricity generating project in the future. The pilot project is expected to construct in 2005.

3) Flare Gas Electricity Generating Project

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Utilizing flare gas in the process of crude oil production in electricity generation makes natural resource consumption more effective, and leads to better environment. Ratchaburi Energy Company Limited for this reason, has studied the feasibility of flare gas electricity generating project together with the crude oil exploration and production company at crude oil sites in Sukhothai and Phitsanulok provinces.

TRANSACTION WITH RELATED COMPANIES The Company has had transactions with certain related parties which may incur any conflicts of interest with the nature of relationship as follows: Connected transactions

Contract Signed Date

Related Companies

Amount (Million Baht)

2. Public Relations Service Agreement for Ratchaburi Power Co., Ltd. (RPCL) Ratchaburi Power Plant Communication Center was set up according to this agreement and will be expired on December 30, 2006. The Agreement will be renewed automaticaly year to year except any party makes cancellation. Service fee is charged at actual operating costs in proportion as follows: - From June 1, 2004 till financial close date, RPCL will pay 50 percent of all charge - From financial close date till commercial operation date, RPCL will in proportion of two-third of all charge - After commercial operation date, RPCL has paid up the charge as per capacity in proportion of RPCL

Jan 2, 2003 Ratchaburi Electricity

1.24

Generating Co., Ltd. Ratchaburi Energy Co., Ltd.

0.28

Nov 14, 2003 Tri Energy Co., Ltd.

17.53

Jan 2, 2003

Jun 1, 2004

Ratchaburi Power Co., Ltd.

Annual Report 2004

1. Provision of Management Services Agreement 1.1 To provide services related to internal audit, legal affair, secretarial job to Board of Directors, and information technology and financial services ● In 2004, service income include; Ratchaburi Electricity Generating Co., Ltd. at 1.24 million baht. Ratchaburi Energy Co., Ltd. at 0.28 million baht. ● As of December 31, 2004, other account receivable of related party was 0.12 million baht. 1.2 To provide service by assigning the companyûs representatives to Tri Energy Co., Ltd. as the Managing Director, Account and finance manager, and Operation and contract management manager ● In 2004, service income was 17.53 million baht. ● As of December 31, 2004, other account receivable of related party was 3.22 million baht.

Ratchaburi Electricity Generating Holding Public Company Limited

Ratchaburi Electricity Generating Holding PCL.

Connected transactions

Contract Signed Date

Related Companies

Amount (Million Baht)

and Ratchaburi Power Plant In 2004, service income was 12 million baht. ● As of December 31, 2004, other account receivable of related party was 0.41 million baht.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

●

3. Loan to Ratchaburi Power Co., Ltd. Feb 27, 2004 Ratchaburi Power By 25 percent in equity of Ratchaburi Power, the Co., Ltd Company will lend 600 million baht maximum for 3 years. The loan will be gradually withdrewn accordingly to its necessary. The interest rate will be charged at 3.125 percent per year. In 2004, Ratchaburi Power Co., Ltd. withdrew as follows; The First: On Mar 19, 2004, at 340.93 million baht The Second: On May 13, 2004, at 17.41 million baht The Third: On Aug 19, 2004, at 20.33 million baht The Fourth: On Nov 2, 2004, at 28.14 million baht Total 406.81 million baht ● In 2004, interests income was 9.13 million baht.

406.81

4. Loan to Ratchaburi Gas Co., Ltd. Nov 14, 2003 The Company has issued the offering to Ratchaburi Gas Co.,Ltd. The interest rate charge based on 1-year fixed deposit for corporate rate of Siam Commercial Bank PCL. Loan as of Nov14, 2003, at 934.10 million baht Repayment at (441.30) million baht Balance as of Dec31, 2004, at 492.80 million baht ● In 2004, interests income was 9.88 million baht. ● As of Dec 31, 2004, other account receivable of related party was 0.39 million baht.

492.80

5. Loan to Ratchaburi Alliances Co., Ltd. The Company has issued 416.25 million baht promissory note to Ratchaburi Alliances Co.,Ltd. The interest rate charges upon 1-year fixed deposit for corporate rate of of Siam Commercial Bank PCL. rate plus 1 percent. ● In 2004, interest income was 0.82 million baht. ● On April 28, 2004, Ratchaburi Alliances Co., Ltd repaid all principal to the Company. 6. Borrowing from Ratchaburi Electricity Generating Co., Ltd. by issuing bill of exchange for 2 times, amounting at 800 million baht as follows : a. 1st bill: From Mar 11, 04 › May 4, 04 amounted 416 million baht, interests rate at 1.16 percent b. 2nd bill: From Mar 19, 04 › May 4, 04 amounted 384 million baht, interests rate at 1.16 percent

Feb 27, 2004

Ratchaburi Gas Co., Ltd.

Ratchaburi Alliances Co., Ltd. (Already Paid)

Ratchaburi Electricity Generating Co., Ltd. (Already Paid)

Connected transactions

Contract Signed Date

Related Companies

Amount (Million Baht)

7. Hiring EGAT as consultant for preparation of contractor bidding for 700 MW Power Plant of expansion project The scope of work covers conditions for bidders and documents arrangement for the bidding. The consulting fee values at 2.99 million baht (excluding VAT) ● In 2004, no expenses incurred.

Jun 1, 2004

EGAT

2.99

8. Ratchaburi Electricity Generating Co., Ltd. Purchase Agreement of the Ratchaburi Thermal Power Plant Units 1 and 2 Ratchaburi Electricity Generating Co., Ltd. made an advance payment of 400 million baht for the fuel oil transport system (as part of the property totally amounted to 30,472 million baht and there had been the transfer of the Ratchaburi Thermal Power Plant Unit 1 and 2 on October 31, 2000 pursuant to the Agreement). EGAT hired Best Tech & Engineering Ltd. and Thai Rotary Engineering Ltd. as its contractor for constructing the fuel oil transport system. At present, the construction has been completed. It is now on the process of document provision for ownership transfer to Ratchaburi Electricity Generating Co., Ltd.

Oct 9, 2000

EGAT

400

9. Power Purchase Agreement Ratchaburi Electricity Generating Co.,Ltd. entered into a 25-year Power Purchase Agreement with EGAT ● In 2004, Income incurred from the electricity sales amounting to 39,714.03 million baht. ● As of Dec 31, 2004, the related transactions were by the following; Account receivable of related party was 6,645.08 million baht Long-term account receivable of related party was 34.66 million baht. Accrued expenses of related party was 123.03 million baht.

Oct 9, 2000

EGAT

39,714.03

10. The Assets Purchase Agreement of Combined-Cycle Power Plant Blocks 1-3 Ratchaburi Electricity Generating Co., Ltd. will receive compensation on warranty claim from EGAT due to damage equipments of which Ratchaburi Electricity

Oct 9, 2000

EGAT

81.75

In 2004, interests expense was 1.28 million baht. On May 4, 2004, the principal was repaid to Ratchaburi Electricity Generating Co., Ltd.

Annual Report 2004

●

Ratchaburi Electricity Generating Holding Public Company Limited

●

Connected transactions

Contract Signed Date

Related Companies

Amount (Million Baht)

11. Diesel Income Ratchaburi Electricity Generating Co., Ltd. received diesel income from Load Rejection Test from EGAT. ● In 2004, other income from diesel was 2.06 million baht

EGAT

2.06

12. Fuel Oil Purchase During the construction of Petkasem fuel oil unloading and supply system, EGAT will be the fuel oil supplier for the Ratchaburi Electricity Generating Co., Ltd. ● In 2004, fuel oil expenses were 3,081.60 million baht ● As of Dec 31, 2004, account payable of related party was 216.41 million baht

EGAT

3,081.60

13. Station Service Power Purchase Agreement Nov 1, 2000 Ratchaburi Electricity Generating Co., Ltd. has entered into Station Service Power Supply Agreement to be used for wastewater treatment, pumping station, and electricity consumption in the power plant area ● In 2004, the expenses incurred was 132.88 million baht. ● As of Dec 31, 2004 Account payable of related party was 11.67million baht Accrued expenses of related party were 12.37million baht.

EGAT

132.88

14. Operation and Maintenance Agreement Oct 26, 2000 Ratchaburi Electricity Generating Co., Ltd. hired EGAT to operate and maintain Ratchaburi Power Plant including general maintenance and major overhaul for 9 year period. ● In 2004, the incurred expenses was 761.23 million baht. ● As of Dec 31, 2004, the related transactions were by the following Account payable of related party was 20.01million baht Accrued expenses of related party were 23.21million baht. Prepaid expenses to related party were 8.87million baht.

EGAT

761.23

15. Parts management Agreement for Gas Turbine Aug 1, 2002 Ratchaburi Electricity Generating Co., Ltd. entered into an agreement with EGAT for providing management services for the Parts of Gas Turbine Model MS9001FA. The services fees under the agreement are divided into

EGAT

12.32

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Generating Co., Ltd. paid in advance at 81.75 million baht. ● As of Dec 31, 2004, account receivable of related party was 87.75 million baht

Connected transactions

Contract Signed Date

Related Companies

Amount (Million Baht)

EGAT

3.64

Connected transaction between the Company and related parties detailed as follows; 1. Ratchaburi Electricity Generating Co., Ltd. 1.1 The Company is the major shareholder of Ratchaburi Electricity Generating Co., Ltd. 1.2 Some directors and executives of the Company are the directors of Ratchaburi Electricity Generating Co., Ltd. 2. Ratchaburi Energy Co.,Ltd. 2.1 The Company is the major shareholder of Ratchaburi Energy Co.,Ltd. 2.2 Some directors and executives of the Company are the directors of Ratchaburi Energy Co.,Ltd. 3. Ratchaburi Gas Co., Ltd. 3.1 The Company holds share in Ratchaburi Gas Co., Ltd. 3.2 Some executives of the Company are the directors of Ratchaburi Gas Co., Ltd. 4. Tri Energy Co., Ltd. 4.1 Ratchaburi Gas Co., Ltd. which is the subsidiary of the Company holds share in Tri Energy Co., Ltd. 4.2 Some directors and executives of the Company are the directors of Tri Energy Co., Ltd. 5. Ratchaburi Alliances Co., Ltd. 5.1 Ratch Udom Power Co., Ltd. which is the subsidiary of the Company holds share in Ratchaburi Alliances Co., Ltd. 5.2 Some executives of the Company are the directors of Ratchaburi Alliances Co., Ltd. 6. Ratchaburi Power Co., Ltd. 6.1 Ratchaburi Alliances Co., Ltd. which is the subsidiary of the Company holds share in Ratchaburi Power Co., Ltd. 6.2 Some directors and executives of the Company are the directors of Ratchaburi Power Co., Ltd. 7. Electricity Generating Authority of Thailand (EGAT) 7.1 EGAT is the major shareholder of the Company 7.2 Some directors of EGAT are directors of the Company 8. Ratchaburi Electricity Generating Co., Ltd. and EGAT 8.1 Under 25-year Power Purchase Agreement 8.2 Some EGAT directors are the directors of Ratchaburi Electricity Generating Co., Ltd.

Annual Report 2004

16. Service Agreement for the Preparation and Internal Aug 1, 2002 Mornitoring of Environmental Management System (ISO 14001) Ratchaburi Electricity Generating Co., Ltd. hired EGAT to provide services for preparation and internal monotoring of environmental management system (ISO 14001). ● In 2004, the expenses incurred were 3.64 million baht. ● As of Dec 31, 2004, the accrued expenses of related party were 1.56 million baht.

Ratchaburi Electricity Generating Holding Public Company Limited

2 parts namely, a monthly service fee at a rate of 1.03 million baht per month (excluding VAT) and operating expenses in procurement and repair which will be charged in accordance with actual cost. ● In 2004, the incurred expenses was 12.32 million baht. ● As of Dec 31, 2004, the related transactions were by the following Account payable of related party was 1.10million baht Accrued expenses of related party were 1.10million baht

For the year ended December 31, 2004

Ratchaburi Electricity Generating Holding Public Company Limited Management D i scussi on and A nal ysi s

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

1. Business Operation

The Company and its subsidiariesû operation and management policies for the year 2004 had been set to reflect their core business objective, to expand its investment in power business to increase revenues and generating capacity of the Company. On March 12, 2004 Ratchaburi Alliances Company Limited, the Companyûs subsidiary, acquired 25 percent of the total registered and paid up capital of Ratchaburi Power Company Limited (çRPCLé). RPCL will construct two Blocks of Combined-Cycle Power Plant, with the generating capacity of 700 megawatts each, or 1,400 megawatts in total. These two blocks of Combined-Cycle Power Plant are under processing for construction and will be located in the same area of existing Ratchaburi Power Plants. The first and the second blocks of Combined-Cycle Power Plant are scheduled to commence its commercial operation date in March 2008 and June 2008 respectively. At present, the Company has total capacity of 3,907.50 megawatts and the completion of the project in 2008 will increase the capacity of 350 megawatts. In addition, Ratchaburi Energy Company Limited, the Companyûs subsidiary, has acquired 15% of the total shares of Siam Ethanol Exports Company Limited in September 2004 which will be paid up by capital on call with the total investment value approximately Baht 45 million. Siam Ethanol Exports Company Limited is licensed to construct the alcohol manufacturing plant for export with its production capacity of 30,000 tons per year. The project is located in Ban Kai District, Rayong Province with the estimated construction period of one year. The alcohol manufacturing plant is scheduled to commence its Commercial Operation in January 2006. 1.1 Operating Performances Net profit in the year 2004 was Baht 6,487.03 million, or Baht 4.47 per share. This represents an increase of Baht 1,062.70 million or 19.59 percent from Baht 5,424.33 million in year 2003. Total income in the year 2004 was Baht 40,416.43 million, increasing by Baht 4,612.74 million or 12.88 percent from the year 2003. Cost of sales and expenses in the year 2004 were Baht 33,929.40 million, increasing by Baht 3,550.04 million or 11.69 percent from the year 2003. 1.2 Analysis of Income Total revenues of the Company and its subsidiaries for the year 2004 were Baht 40,416.43 million, increasing by Baht 4,612.74 million or 12.88 percent from Baht 35,803.69 million in the year 2003. The main reasons of this were as follows: 1) The electricity sales of Ratchaburi Power Plant for the year 2004 was Baht 39,714.03 million, increasing by Baht 4,185.72 million or 11.78 percent from the year 2003. The main reasons were as follows : - Revenue received from the availability payment for the year 2004 was Baht 11,418.17 million, decreasing by Baht 479.26 million or 4.03 percent from Baht 11,897.43 million in the year 2003. The main reason for such decrease was due to the fact that the availability payment rate of Thermal

Annual Report 2004

Ratchaburi Electricity Generating Holding Public Company Limited

Power Plant in the year 2004 was lower than that of in the year 2003 as specified in the Power Purchase Agreement (PPA). - Revenue received from the energy payment for the year 2004 was Baht 28,295.86 million, increasing by Baht 4,664.98 million or 19.74 percent from Baht 23,630.88 million in the year 2003. This mainly was due to increase in energy generation, resulting in higher consumption of natural gas and oil in 2004. 2) Management service income for the year 2004 was Baht 29.53 million, increasing by Baht 27.31 million or 12.31 times because of the increase of the management service fee from Tri Energy Co., Ltd. in the amount of Baht 15.31 million. There was also income received from Ratchaburi Power Co., Ltd. in relation to the services provided to the Ratchaburi Power Plant Communication Center in the amount of Baht 12.00 million. 3) Other income for the year 2004 was Baht 109.08 million, increasing by Baht 83.96 million or 3.34 times. This mainly was due to the fact that the Company received compensation from warranty claim from EGAT for the equipment repairing. Such claim was recorded as expenses in the previous year in the amount of Baht 81.75 million. 4) The Company recorded share of profit of joint ventures for the year 2004 in the amount of Baht 407.90 million, increasing by Baht 313.38 million or 3.32 times from Baht 94.52 million in the year 2003. The main reason was that on November 14, 2003 the Company invested 37.5 percent in Tri Energy Co., Ltd. by acquiring Banpu Gas Power Co.,Ltd. (Currently named as Ratchaburi Gas Co.,Ltd.), while in the year 2004, the Company recorded share of profit of joint venture for the whole year. 1.3 Analysis of Cost of Sales and Expenses Cost of sales and expenses in the year 2004 were Baht 33,929.40 million, increasing by Baht 3,550.04 million or 11.69 percent from Baht 30,379.36 million in the year 2003. The main reasons were as follows: 1) Cost of sales of Ratchaburi Power Plant in the year 2004 was Baht 32,173.20 million, increasing by Baht 3,968.74 million or 14.07 percent from Baht 28,204.46 million in year 2003. This was resulting from - An increase in fuel cost amounted to Baht 4,582.86 million. This mainly was due to higher power generation, resulting in higher consumption of natural gas and oil. - The equipment repairing expenses for the year 2004 were Baht 82.57 million, decreasing by Baht 396.83 million or 82.78 percent from Baht 479.40 million in the year 2003. The main reason was that the Combined Cycle Power Plant Block 2 was shutdown for Minor Inspection during November to December 2004. - The equipment repairing expenses were not recorded as expenses in the year 2004 since plant equipment were in the process of delivering to the contractor for repairing during such period.

- The maintenance service expenses for the year 2004 were Baht 65.50 million, decreasing by Baht 251.42 million or 79.33 percent from Baht 316.92 million in year 2003. The main reason was that the Power Plant shutdown period for maintenance in the year 2004 was less than the shutdown period in the year 2003. - The insurance expenses for the year 2004 were Baht 225.14 million, decreasing by Baht 105.56 million or 31.92 percent from Baht 330.70 million in year 2003. The main reason was that the company received discount for the good claim bonus of the power plantûs insurance premium for the year 2004. - Ratchburi Electricity Generating Co.Ltd., the Principal Subsidiary has adopted a new accounting policy - to calculate the value of spare parts by recognizing the allowance for obsolescence as an annual expense, averaged by the remained operating life of the power plants commencing from 2004 onwards. The allowance for obsolescence, which is catego rized as the cost of sales of power plants, was Baht 47.97 million for the year 2004. 2) Interest expenses for year 2004 were Baht 1,224.68 million, decreasing by Baht 477.91 million or 28.07 percent from Baht 1,702.59 million in year 2003.The main reasons were that the average MLR for the year 2004 was 5.75%, lower than 6.24% in the year 2003 and the loan agreement of the Principal Subsidiary had been secondly amended for the interest rate reduction from MLR-1.50% to MLR-2.50% starting from July 1, 2003 to June 30, 2005. In addition, the principal has been repaid according to its schedule at the end of each quarter.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

2. Analysis of Financial Status

2.1 Analysis of Assets As at December 31, 2004, the Company and its subsidiaries had total assets of Baht 69,494.19 million, Baht 2,349.74 million or 3.50 percent increase from the year 2003. The classification is provided below: 1) The current assets totaled of Baht 16,595.48 million with an increase of Baht 4,548.21 million. The main reasons were as follows : - Short-term investments in promissory notes and short-term investments pledged as collaterals (according to conditions of loan agreement) totaled to Baht 7,639.25 million, Baht 641.75 million increase from the previous year. - Trade receivable from related party totaled to Baht 6,645.08 million with an increase of Baht 3,991.19 million or 1.5 times from the end of the previous year since the trade receivable at December 31, 2004 equal to two months (November and December, 2004) but trade receivable at 31 December 2003 equal to only one month (December 2003). 2) The non current assets totaled of Baht 52,898.71 million decreased by Baht 2,198.47 million. The main reasons for this were as follows: - Long-term investments pledged as collateral totaled to Baht 519.51 million, Baht 1,097.37 million decreased from the previous year. - Long ›term loans to related parties increased in the amount of Baht 406.81 million from the previous year. The main reason was, during year 2004, the Company had lent RPCL in the amount of Baht 406.81 million. According to this, Ratchaburi Alliances Company Limited, the Companyûs subsidiary, acquired 25 percent of the share capital of RPCL on March12, 2004. - Interests in joint ventures totaled to Baht 593.89 million as the result of profit sharing from of Tri Energy Co.,Ltd increased in the amount of Baht 200.48 million. Together with the first year received profit sharing from the RPCL in the amount of Baht 382.20 million and Siam Ethanol Exports Co.,Ltd., in the amount of Baht 11.21 million.

- Net property, plant and equipment totaled to Baht 48,970.62 million with a decrease by Baht 2,097.76 million from previous year because of the depreciation of assets during the year. 2.2 Analysis of Liabilities As at 31 December, 2004, the Company and its subsidiaries had total liabilities of Baht 41,026.18 million, which was Baht 1,382.29 million or 3.26 percent decreased from the end of the previous year. The main reasons were as follows : 1) Current liabilities were Baht 8,907.73 million, increasing by Baht 1,741.66 million, compared with those as at the end of the previous year. Due to increase in energy generation, resulting in higher consumption of natural gas and oil, trade payable was increased in the amount of Baht 1,435.91 million. 2) Long-term liabilities were Baht 32,118.45 million, decreasing by Baht 3,123.95 million or 8.86 percent in comparison with those as at the end of 2003. The underlying factors were the repayment of long-term loans in the amount of Baht 2,887.18 million. 2.3 Analysis of Shareholdersรป Equity As at December 31, 2004, the Company and its subsidiaries had total shareholdersรป equity of Baht 28,468.01 million, Baht 3,732.03 million or 15.09 percent increased in comparison with that of the previous year. The supporting factors were as follows: 1) Net profit in the year 2004 amounted to Baht 6,487.03 million. 2) Accordance to the Shareholdersรป Annual General Meeting on April 12, 2004, the Companyรปs shareholders approved the appropriation of the Companyรปs profit for the dividend payment for the operating results in the 2nd half year of 2003 in the amount of Baht 1,450 million (Baht 1.00 per share), which was paid on May 7, 2004. 3) The Board of Directors of the Company held on September 13,2003 passed the resolutions to approve the interim dividends payment for the operating results for the first six month period of 2004 in the amount of Baht 1,305 million (Baht 0.90 per share), which was paid on October 8, 2004. As at December 31, 2004, the Company had issued and paid-up share capital in the amount of Baht 14,500 million, with a premium on share capital of Baht 1,531.78 million, legal reserves of Baht 995.37 million, and unappropriated retained earnings of Baht 11,440.86 million.

Current Ratio (times) Ratio of Net Profit (%) Ratio of Return on Equity (%) Rate of Return on Assets EBITDA (Million Baht) Ratio of EBITDA to Assets (%) Debt to Equity Ratio (times) Debt Service Coverage Ratio (times) Book Value per Share (Baht) Earning per Share (Baht)

Year 2003 1.68 15.15 22.93 8.04 9,737.47 14.43 1.71 2.46 17.06 3.74

Annual Report 2004

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

Year 2004 1.86 16.05 24.39 9.50 10,433.79 15.27 1.44 2.52 19.63 4.47

Ratchaburi Electricity Generating Holding Public Company Limited

2.4 Major Financial Ratios of the year 2004 and 2003.

3. Analysis of Cash Flows

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

The ending balance of cash and cash equivalents of the Company and its subsidiaries as at December 31, 2004 was Baht 571.11 million with a decrease of Baht 118.46 million or 17.18 percent, compared to the previous year. The details were summarized below: 1) Net cash provided by operating activities decreased in the amount of Baht 5,763.61 million from year 2003. This was due to the cash flows from operating increased by Baht 858.13 million. Cash received from working capital decreased by Baht 6,621.74 million, resulting from an increase of electricity trade receivable in the amount of Baht 7,744.35 million whereas the trade payable increased in the amount Baht 1,505.19 million as described in 2.1 and 2.2 for trade receivable and trade payable respectively. 2) Net cash payments from investing activities decreased in the amount of Baht 4,179.56 million from the year 2003, as a result of a decrease in acquisition of joint ventures in the amount of Baht 738.10 million and a decrease in deposits at financial institution and short term investment in the amount of Baht 3,591.20 million. 3) Net cash provided by financing activities decreased from the previous year in the amount of Baht 790.77 million. The main reasons were that payments on long-term loans were increased in the amount of Baht 645.27 million and dividends paid to shareholders were decreased in the amount of Baht 502.61 million. Also, in the year 2003 there were loans to Banpu Gas Power Co.,Ltd. (currently named as Ratchaburi Gas Co.,Ltd.) in the amount of Baht 931.28 million for acquiring 37.5 percent in Tri Energy Co.,Ltd. in November 2003.

REPORT ON COMPLIANCE WITH PRINCIPLES OF GOOD CORPORATE GOVERNANCE

Annual Report 2004

In realizing the importance of good corporate governance, the Company fully intends to operate its business under the principles to acquire efficient management in terms of structure, system, and administrative process. The increasing competitiveness through the compliance benefits shareholders in the long term and it is a fundamental factor for sustainable growth. Transparency and explicitness also generate utmost advantage to all stakeholders. Therefore, the principles of good corporate governance are stated in the vision statement and missions of the Company. The Board of Directors announced Good Corporate Governance Policy on January, 14, 2003 that complies with the Stock Exchange of Thailand guidance on good corporate governance for listed companies as follows: 1) To establish a system of management and operations adhering to good corporate governance, the Company must eliminate conflicts of interest and maintain standards of honesty, integrity, rationality, independence, and high ethical values. 2) To establish the effective and comprehensive control systems of financial, operational, administrative, internal audit, and risk management and controls. 3) To promote and ensure the accurate, timely and transparent disclosure of significant information relating activities of the Company没s group. 4) To promote and support the equal treatment of all shareholders on an equal manner, according to the code of conduct for public companies. 5) To promote and supervise on operations to ensure that the legal rights of all stakeholders, such as customers, employees, business partners, shareholders, investors, creditors, competitors, independent auditors, the public sector, and the community where the company is located, receive protection and good treatment. In order to achieve the business cooperation and to create the mechanism for monitoring, supervising, improving, and assessing the Company没s performance to meet the vision, mission, and policy, the Company has set up a good corporate governance working group comprising executives from each Company没s group to study and consider the related principles, to propose the study result and the operation

Ratchaburi Electricity Generating Holding Public Company Limited

1. Policies of Good Corporate Governance

guidelines, including to bring those accepted guideline into concrete action. With determination to continuously practice the principles of good corporate governance in management and operations led the Company to be one of 85 companies awarded ù2003 Top Quartile Companiesû from total 337 listed companies on the Stock Exchange of Thailand (SET) under the project of Baselining Corporate Governance Practices on Thai Listed Companies organized by Thai Institute of Directors Association (IOD) under the support of SET and the Securities and Exchange Commission (SEC). The Company has received this award three consecutive years. Besides, participation in the mentioned project since December, 2003, the Company was rated 8.02 scores or in the level classified as ùvery outstandingû by Thai Rating and Information Services Co., Ltd. (TRIS) in September, 2004. This reflects the fact that the Company has practiced the principles of good corporate governance seriously and has determined to develop the practice in coming days. As a result of the rating, the Company not only strengthen its credit and good image among investors and general public, but also benefit privileges from SET in terms of 50% annual fee reduction for two years and 50% annual fee reduction from the SEC. Moreover, the Department of Revenue and the Department of Business Development have facilitated the Company when contact for services.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

2. Rights of Shareholders

The Company has operated to preserve equal rights of shareholders as follows: ● The Company has appointed the transparent operating direction to promote the shareholdersû trust in complete and fair returns, with no crossing shareholding structure. Besides, the stakeholders are not allowed to vote and approve the connected transaction and/or other important matters that involved with their interest. ● The Company has set up the measurement to prevent the usage of internal information for its employee benefits. The Company has issued a notification dated on February 5, 2003, to enforce management, staffs, and employees to directly report the changes in their shareholding status in the Company, including their spouses and their under-age children to the Managing Director within 3 working days since the changes have taken place. ● The Company has proceeded to enable its shareholders to have absolute voting right by sending them the details of important issues, namely the connected transaction of the changes in key policies, the determination of the committee remuneration, and the alteration of regulation with supportive details for their comprehension and consideration together with the shareholdersû meeting invitation The Company has delivered the meeting invitation letters, including other information, namely meeting agenda, meeting decorum, and proxy form to individual shareholders at least 14 days prior to the meeting date. In addition, the Company welcomes all shareholders to ask for more information and give their opinion equally. The count of voting scores is transparently arranged and could be examined. The meeting reports are posted on the Companyûs website after receiving approval from the Chairman and notified to the SET. ● The fundamental rights are equally provided to all shareholders which are the right to receive the share certificates and transfer, the right to receive the accurate and clear information, the right to attend the meetings and make a vote for approval of important issues, the right to elect the Board of Directors who will operate the Companyûs business, and the right to gain corporate profits in terms of dividends and/or other rights.

3. Rights of Stakeholders The Company has set up corporate, management and staffsû ethics to be used as a guideline of clear and fair practice to all stakeholders. The management and staffs are well aware of the instituted ethics and strictly comply with them. The ethics cover all significant principles that adhere with the fair responsibility for all relevant parties and legal rights of stakeholders are taken into account. Throughout the past operation, the Company has treated its staffs fairly and equally and given the appropriate remuneration to them. Moreover, the Company has operated its business to establish a stable growth in order to promote the valuable returns to all shareholders. Besides, the Company has treated all business partners equally with good relation as well as environmental effects to the society and public are in the Companyûs concern.

Annual Report 2004

The Company has held shareholdersû meeting by treating all shareholders equally and proceeding the meeting with lawful. In 2004, the Shareholdersû Annual General Meeting was scheduled on April, 12 at 10.00 am at Vibhawadee Ballroom, Sofitel Central Plaza Hotel, Paholayothin Road, Jatujak District, Bangkok. The Company sent each shareholder, whose name appears in the shareholders registration book on its closing date, an invitation letter together with annual report/financial report, meeting decorum, and proxy form. Moreover, the Company disclosed facts, key information, reasons, necessities, and the Directorsû opinion in each agenda as for supportive information to be considered. Moreover, the schedule of the meeting was published both in Thai and English newspapers for three consecutive days prior to the meeting date. Besides selecting the convenient time and place for the attendance, the Company has allowed shareholders to register in two hours before the commencement of the meeting by using the computer system to facilitate the registration process with accuracy. Before the commencement, the Chairman of the meeting informed the attendants how to vote and count the vote score in each agenda in accordance with the SETûs guidance on Shareholders Meetings Arrangement. Every shareholder has the equal rights to vote and no one is barred from the vote. Eight directors including the Chairman, the Chairmen of the Boards of the subsidiaries, Managing Director, and all Auditing Committee participated in the Meeting. In addition, the management of the companyûs group attended the Meeting to answer inquiries and provide further information. The Meeting was arranged accordingly the prior informed agenda and the participants were welcomed to opine, question and comment in each agenda. Requested discussion period was fully spent. Then, announcement and voting process were operated. Computer system was utilized for the accuracy and time save. Overall meeting consumed roughly 2 hours. The meeting report covered important information, for example, meaningful explanations, questions, answers, and comments. Voting method, score counting method and consents/disagreement, including non vote were disclosed. The meeting report must be completely written in three days after the meeting date. The Company, then, notified the report to the SET within determined time and posted it on the Companyûs website. Moreover, the report was kept in good filing system, which could be examined and referred. Furthermore, in order to gather all opinions and comments of all shareholders for improving the Shareholdersû Annual Meeting preparation to be more convenient for all shareholders, since April 12, 2004 the Company has provided the questionnaire to shareholders to evaluate the meeting arrangement by using the questionnaire created by the Listed Company Association (LCA).

Ratchaburi Electricity Generating Holding Public Company Limited

4. Shareholders Meeting

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

5. Leadership and Visions

The Board of Directors, as the Companyûs leader, has important role to bring success to the Company by setting the proper strategies and policies to increase competitiveness referring to the Companyûs growth, adding long-term value to shareholders and responsibilities to all stakeholders. The Board has authorities to manage the Companyûs business under the laws, regulations, and shareholdersû resolutions with honesty, morality, and business ethics, also to oversee the performance of the Companyûs management to achieve the target, and to generate ultimate benefits to all shareholders. The Board of Directors is independent to make decision for generating ultimate benefits for the Company and shareholders. Besides, the Board has important role to give approval and review the Companyûs visions, obligation, key policies, financial target and budget and strategic plan. The Board has to follow up the management performance to acknowledge their operational progress according to the Companyûs target or plan, consistently. In addition, the Board has supervised the Company to provide sufficient internal control and follow up systems. The Board also has given the policy to have appropriate measures for risk management, which accounted as for the Companyûs urgent policy, and taken those measures into concrete action. The Board would give an approval for setting the annual assessment scale at the beginning of the year. Besides, the quarterly performance reports must be submitted to the Board for following up, review and improvement of the Companyûs operating performance. Moreover, those reports would be brought to evaluate the performance of the management and of the Board itself at the end of the year. Result of the evaluation would be linked to the adjustment of their remuneration. Furthermore, the Sub-committees, namely the Auditing Committee and the Risk Management Committee also play important roles to closely monitor and follow up the operation of the management. Besides the scaling assessment, the Board of Directors has proceeded Self Assessment for the purpose of review and improvement of their operations in the future. To make clear understanding on business operation, The Company published the documentary about natures of its businesses and the work performance of the Companyûs group, including regulations, important policies, and guidance for the Directors in accordance with the SET and delivered it to new Directors. In addition, the Company has urged a policy to encourage the Directors to participate in seminars held by involving organizations, for example, the IOD, and the SET in order to develop and increase their skills and efficiency of performing the Companyûs Directorship. The Companyûs Directors have participated in the seminar held by the IOD in many programs as shown in the next page. The Companyûs operation has complied with regulations issued by the governmental regulator from the government. In the Board of Directors meetings, management has made the informative summary concerning any announcement, regulations, compulsions, and rotated letters from the SEC and the SET for the acknowledgement of the Board of Directors.

Chairman Directors

Mr. Cherdpong Siriwit Mr. Pala Sookawesh Mr. Viravat Chlayon Mr. Viroj Klangboonkrong Mr. Suchart Thada-Thamrongvech Mr. Sujarit Patchimnun Mr. Chulasingh Vasantasingh Mr. Chanin Vongkusolkit Mr. Kraisi Karnasuta Mr. Narongsak Vichetpan Mr. Kumphuy Jirararuensak Mr. Areepong Bhoocha-oom Mr. Boonchoo Direksathapon

Programs Director Director Audit Finance for Certificate Accreditation Committee Non-Finance Program Program Director

✓

✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

✓ ✓ ✓ ✓ ✓

✓

7. Business Ethics The Board of Directors is seriously aware of its responsibility to institute a system in order to ensure that all activities are both legal and ethical. The Company has set codes of conduct for directors, management and all staffs as for the guidance of practices, for instance, business operation guidance, responsibility to shareholders, responsibility to society and environment, ethic to customers, ethic to business

Annual Report 2004

Since the Company has been operated, the Board of Directors and the management have carefully considered preventing the conflict of interest with honesty, integrity, rationality, and independence under the good ethics framework. To endorse transparency and prevent the misuse of resources for personal gain, the Board of Directors has determined the regulations and prohibitions for directors, management, employees, hired workers, their spouses, and their under-age children from using the important and undisclosed inside information of the Company or its group for their own benefits or others. The Audit Committee has reported the Board of Directors on the acknowledgement of the connected transactions which their appropriation has been carefully considered in accordance with SETûs requirements regarding the reporting. The disclosures of such information are strictly implemented in quarterly as presented in details on pages 47, and in the Companyûs Annual Report form 56-1.

Ratchaburi Electricity Generating Holding Public Company Limited

6. Conflicts of Interest

partners, ethic to the Company, ethics to personnel and colleagues in accordance with hierarchical relations, and ethics to society and politics. The Companyรปs codes of conduct, namely for the Company, for management, and for staffs are based on the principle of sustainable success in businesses relies on high ethical standards. The Company is convinced that its status as a business leader requires not only attention to operational excellence, new technologies, and effective systems of management and control, but also on morality, ethics, transparency, virtue, responsibility to stakeholders, and care of social and environmental importance.

8. The Balance Provided by Non-Managerial Directors

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

There are 13 directors in the Companyรปs Board of Directors, comprising 12 directors who is not the management (including five independent directors) and a director who is the management and the managing director of the Company. In the Board of Directors, the number of independent directors must be more than one-third of the board members. Chairman of the Board is the independent director and must not be the management as well as the managing director of the Company. As duty of the non-managerial directors are visibly separated, their acting as shareholdersรป representatives, balance makers and auditors could be trusted. In addition, the Company has set up three sub-committees; Audit Committee, the Human Resources and Remuneration Committee and Risk Management Committee in order to facilitate the work of the Board of Directors and increase their performing efficiency, as detailed on page 25-27 The Company has given considerably importance to the capacity for independent decision-making among its directors as a way of assuring that the best interests of the Company and shareholders are maintained. All Directors of the Company perform their duties honestly, ethically, and in ways to protect the Companyรปs interests. They act as representatives of the shareholders and thus their obligation is to lead and observe the operations of management. In addition, the Company determines to have at least one non-managerial directors meeting in a year to encourage an independent discussion among them. In 2004, the meeting of the directors who is not the management of the Company was held on December 2004 for considering the operation assessment of the directors together with other factors. These will enhance the effectiveness of the board meeting and monitoring of the Directors.

9. Combining or Separating Positions The Chairman of the Board of Directors is an independent director who is not the same person as Managing Director and has no relationship with management. Although Managing Director represents the Companyรปs largest shareholder holding 45 percent of the registered shares, his authority for making governance policy is explicitly separated from regular execution.

10. Remuneration for Directors and Management The remuneration for directors is compensated at an appropriate level in comparison to general practice in the same industry and in view of the benefits deriving from their works. Directors who are given multiple duties and responsibilities, such as being a member of three committees, will be given remuneration that is appropriately higher.

Directors who are serving as management will receive a level of remuneration in line with the Company没s operating results and their individual performances. The remuneration for directors is regularly proposed to the Shareholders没 Annual General Meeting for approval. Remuneration for senior executives is determined according to the principles and policies of the Board of Directors, and is linked to the Company没s operating results and the performance of each executive. These issues are considered and reviewed by the Human Resources and Remuneration Committee, using a set of key performance indicators agreed upon in advance. The Board of Directors gives final approval for remuneration paid to senior executives. This annual report, the Board of Directors has disclosed the Company没s remuneration policy and the amount paid to Directors and executives, in compliance with regulations of the SEC and the SET as details on page 18

Annual Report 2004

The Company has determined in advance to hold the Board of Directors meeting once a month on Monday of the third week all year round. The confirmation of the next meeting date must be informed to all directors and management in the current meeting for their acknowledgement and effective time schedule. Extraordinary meetings could be arranged accordingly appropriate. Meeting agenda is clearly arranged in advance under the bilateral consideration of the Chairman and Managing Director to assure that important issues, including regular follow-up are on the agenda. However, directors could address any issues into the agenda independently by informing at least ten days ahead of the meeting date. In case of urgent issue that would bring negative effects both direct and indirect ways to the Company, directors could propose that issue for consideration or for acknowledgement during the meeting of the Board of Directors. The Company would submit each director of meeting invitations together with agenda and a full set of documents to be used in the meeting at least seven days prior to the meeting date, in order to provide time sufficient for the directors to study the agenda before attending the meeting. During the meeting, the Chairman encourages each chairman to present their opinions freely and advocates circumspection in discussion and the appointment of time sufficient for the management to propose issues and for the directors to thoroughly address those issues. The directors could propose their opinions liberally and they are obliged to attend every meeting, except in necessary circumstances. Other senior executives and management who are relating directly to the matters are invited to provide necessary information for the support of proper decision made by the directors and to observe the workings of the Board at the meantime. Each meeting normally lasts for 2-3 hours. The Secretary of the Board of Directors has duty to facilitate the meeting process and activities of the Board of Directors. Minutes of the meetings must be written literally with all relevant matters included. The minutes are prepared on timely manner of 2-3 days after the meeting and properly filing for verification and references. Meeting resolutions must be informed to involving departments and/or taken into actions. In 2004, the Board of Directors held 12meetingson a regular basis. The attendances of directors are summarized as follows:

Ratchaburi Electricity Generating Holding Public Company Limited

11. Meetings of the Board of Directors

Directors 1. Mr. Cherdpong Siriwit 2. Mr. Pala Sookawesh 3. Mr. Viravat Chlayon 4. Mr. Sujarit Patchimnun 5. Mr. Viroj Klangboonkrong 6. Mr. Suchart Thada-Thamrongvech 7. Mr. Narongsak Vichetpan 8. Mr. Kumphuy Jirararuensak 9. Mr. Areepong Bhoocha-oom 10.Mr. Chanin Vongkusolkit 11.Mr. Boonchoo Direksathapon 12.Mr. Apai Chandanachulaka 13.Mr. Silchai

Thirawat

Attendance of Board Meeting 11/12 9/12 12/12 8/12 12/12 12/12 11/12 12/12 7/12 5/12 12/12 4/5 7/8

14.Mr. Chulasingh Vasantasingh

4/6

15.Mr. Kraisi

2/2

Karnasuta

Notes

Resigned as of May 25, 2004 Holding the position as January 13, 2004 and Resigned as of October 1, 2004 Holding the position June 22, 2004 Holding the position as of November 1, 2004

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

The Company has established the department of Corporate Secretary in responsible for secretariat duties, for example, arranging the board meeting, preparing documents and supplements for the Company没s group of directors, taking minutes of the meeting, preparing and filing documents from the board meeting and shareholders没 meeting, including providing the information for decision making, supporting and facilitating the administrative works of the Company没s group of directors.

12. Sub-committees The board of Directors has instituted the other three Committes, composed of non-managerial directors. These Committees help alleviate the obligations of the Board of Directors in considering the matters assigned to them and giving preliminary attention to their correctness, clarity, and completeness before proposing them to the Board of Directors for approval or authorization, as required. The sub-committees comprises as follws; 1) The Audit Committee 2) The Human Resources and Remuneration Committee 3) The Risk Management Committee Duties and responsibilities of the sub-committees are written on page 74 The sub-committees report their workings to the Board of Directors, on a regular basis.

13. Systems of Internal Controls and Audit The Company believes that a system of internal controls is essential at both executive and operational levels. It has, accordingly, spelled out clearly what the obligations and authority are for each level, how the use of assets is to be supervised in the best way possible, and how the implementation of different levels are separated from each other in ways that facilitate balance and mutual scrutiny. The Company has also set up the accurate financial report system for submission to management and disclosure to the public. The purpose of the Office of Internal Audit is to ensure that the Companyûs main operations are in compliance with relevant laws and regulations as well as the policies and methodologies guided by executives to be used as the Companyûs projections. To ensure, moreover, that the Office of Internal Audit has the independence and ability to investigate and deliberate freely, the Companyûs structure has allowed the Office to report its findings directly to Audit Committee.

14. Report of the Board of Directors

The board of Directors is well aware that information, whether financial or non-financial, will have a major impact on the decisions of investors and stakeholders. Disclosure of accurate, complete, sufficient, credible, and punctual information is, therefore, regarded as most important. The Company has instituted an Investor Relations Division to communicate with and provide information to institutional investors, shareholders, analysts, state organizations, and general public. To unveil information of the Company, for example, financial data and influential news, the Company proceeds through the Stock Exchange of Thailandûs electronic media; www.set.or.th, that any interested persons can surf this website. At the same time, some presentations for analysts, and other information has been disclosed on www. ratch.co.th, the Companyûs electronic media. Besides, investors are able to contact Investor Relations Division at telephone 0-2978-5086-7 or by e-mail at polagornk@ratch.co.th.

Annual Report 2004

15. Relations with Investors

Ratchaburi Electricity Generating Holding Public Company Limited

The Board of Directors is responsible for the financial statements and other financial information appears in the annual report pertaining to the Company and its subsidiaries. The financial statements are prepared in accordance with generally accepted accounting principles in Thailand. Accounting policies are chosen for their appropriateness and carefully and consistently implemented and prepared while based on the best possible estimates. All significant information is disclosed in the notes accompanying the financial statements. The Board of Directors maintains an effective system of internal controls so as to provide reasonable assurance that accounting data are recorded correctly, completely, and thoroughly enough to protect assets. This approach also enables the detection of weakness and their rectification so as to prevent malfeasance or other improper conduct. The Audit Committee is responsible for the quality of financial statements and the system of internal controls. The report of the Audit Committee appears on page 73 The board of Directors has an opinion that the Companyûs system of internal controls is in generally good order and of sufficient quality to give grounds for reasonable confidence in the reliability of the financial statements of the Company and its subsidiaries as of December 31, 2004. The responsibility statement from the Board of Directors to the financial report of the Company appears on page 74

In addition, information has been disclosed through the Companyûs activities as follows; ● Quarterly Analysts Meetings which are the opportunity to inform the Companyûs operational workings to analysts and investors, and answer their qustions. The Companyûs executives could meet analysts and investors at these occassions. ● Participation in roadshows and exhibitions organized by the Stock Exchanges of Thailand such as Thailand Focus 2004 and SET in the City 2004 to provide information and to answer questions from institutional investors, international analysts, and general investors. ● Participation in foreign roadshows organized by leading securities companies to provide information and answer questions from foreign institutional investors and foreign analysts. ● To compose annual report Form 56-1 and disclose it through the Stock Exchange of Thailandûs website and to deliver annual report Form 56-2 to shareholders and general interested persons every year. As a result of being well-aware of the importance of such information disclosure, TRIS ranked the Companyûs good corporate governance at ùVery Outstandingû in September, 2004. The Company was scored highest in terms of information disclosure because of its completion and punctuality in accordance with TRISûs report. Furthermore, provision of the Companyûs Management Report and Analysis on nonfinancial matters was in ùgoodû level due to the fact that the interests of shareholders and investors has been considerably concerned.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

16. Human Resources Administration

The Company is well aware of the importance of human resources that is a fundamental factor of successes accordingly corporate targets. The company determines to administrate, develop, and retain its human resources for the creation of products and sustainable prosperity in the organization. The Company, therefore, continues to set up policy and activities for human resources such as In the Companyûs organization chart, there is the Human Resources Department, which is directly responsible for human resources affairs and qualified recruitment. The company encourages human resources development in terms of knowledge accumulation, sequential creation and the preparation of competitive readiness and the Companyûs business adjustment. Besides rotational training programs, the Company organizes both internal and external training courses. Seminars both in the country and aboard have been provided to make staffs capable to effectively produce works under their responsibilities with honesty and virtues. The Company hold some staff activities such as the Company Group Sport Day, annual seminar for strengthening their cooperative efficiency. Moreover, the Company prepares career path development system and the successor to the positions system in order to encourage staffsûcareer progression based on their abilities. The Company implants corporate culture in management and all staffs as of their working lifestyles. The culture is shortened to RATCH meaning as follows;

Respect

The Company trusts and accept the value and differences of staffs. The Company encourages all staffs to participate in workings. Awareness Management and staffs realize any matters relating to their works and seek knowledge to develop themselves. Teamwork All staffs are cooperative and cohesive. Problems are solved in creative ways to develop teamûs success.

Creativity Honesty

positive thinking is beneficial to better operations. Operations are based on honesty, disciplines, and virtues.

Annual Report 2004

Ratchaburi Electricity Generating Holding Public Company Limited

The Company is well aware of internal communication system to create good understanding among staffs and to provide cooperative learning activity together with participation opportunity in various ways. Intranet system, welfare committee meeting representing staffsû requirement and management and staffs meeting are organized. Besides, the Company highlights the improvement of career life quality. Staffsû welfare and other benefits are growing together with the Companyûs business and the standard of labour market. The evaluation system is improved by allowing staffs and their executives to jointly determine work projections which follow organizationûs strategic plans, in advance. Staffsû productivity and their remuneration adjustment are considered according to those projections. The Company also makes the cooperative survey on staffsû wages and benefits with leading companies. The survey is applied as for the guideline for the standard of appropriate and incentive remuneration determination to retain qualified staffs in accordance with the Companyûs business performance.

莽The Village Bank and Revolving Loan Fund for Income Generation茅

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

shows a success of Ratchaburi Power Plant没s Community Development Project. Since project implementation in the past 6 months, people from the areas have jointly formed 16 such village banks from the target of 24. These banks will act as financial institutions wholly owned by the local people. Meanwhile, they will be used for saving and funding for family provisions. Most importantly, the village banks will be tool that strengthens the local organizations and endorses togetherness and harmony in the community.

Mr. Pichet Munkong, Village Headman of Bann Ta-makam, Moo 6 Mr. Pun Bangwat, Member of Ban Ta-makam没s Village Bank Ban Ta-makam, Moo 6, Donsai Sub-District, Photaram District, Ratchaburi Provice

SOCIAL AND ENVIRONMENTAL RESPONSIBILITIES

The Company and group of companies are fully aware that responsibilities to environment and society are essential factors leading to the social acceptance and enable the Company to conduct its business to maintain the sustainable growth together with the development of society and environment. As the result, the Company is focusing mainly to the society and environment. This responsibility extends to the business operation and activities in returning the good and cherished things to the community where the Company operates its business as well as to protect, supervise and develop the environment to be remained in the better conditions together with the community.

Environmental management

The essential matters of the environmental measurement of the Companyûs subsidiary are as follows: ● Management on the air quality. In starting up process of the Thermal Power Plant, the natural gas shall be used as the primary fuel which is clean and no affect against the environment and has been designed to have the fuel combusted in the Low Nox burner so that the amount of Nitrogen oxide that may have been occurred can be controlled. In case the bunker oil (2% low Sulfur) is needed to be used in the start up of the Thermal Power Plant, Ratchaburi Power Plant has to operate Flue Gas Desulfurization (FGD) which minimizes 97.2 percent Sulfur dioxide. The amount of sulfur dioxide gas to be released to the atmosphere is limited at very low compared to the standard criteria of the government. For the start up of the Combined-Cycle Power Plant for the generation of electricity, it generally uses the natural gas as the

Annual Report 2004

As the result of the continuous and consistent performance on the environment, causing the subsidiary to be given with the ISO 14001 certification by Det Norske Veritas (Thailand) Co., Ltd. or DNV for the period of 3 years from July 31, 2003 to July 31, 2006. Throughout such period the surveillance audit must be performed in every 6 months and in 2004 the Company was declared twice for the surveillance audit success as on February 16, 2004 and on September 21, 2004 respectively.

Ratchaburi Electricity Generating Holding Public Company Limited

The Company, via subsidiary (Ratchaburi Electricity Generating Company Limited) has chosen to use the most advanced and highest efficiency in the electricity generation process to protect the environment and work strictly on the practice in accordance with the Companyûs environmental policy. The monitoring and auditing of the environmental quality have been conducted as identified in the Environmental Impact Assessment (EIA) report and the changing of environment quality has been evaluated with the control of the environment quality in all aspects to be within the required standards and deliver such environment quality auditing report to the concerned units for acknowledgement.

Due to higher trends of the social responsibility, the Company has put into policy and emphasizes on building good relationship and trust among stakeholders particularly in respect of social responsibility in the form of community nearby the plant. The company positioned itself as çGood Neighboré who would be apart in developing the community, we located.

primary source. There is the Dry Low Nox Burner to control the amount of Nitrogen oxide that may have been occurred. In case the diesel oil is used, the mineral free water injection system will be operate to control the temperature of the burner lower than level where the Nitrogen oxide may have been released. In addition, Ratchaburi Power Plant has undertaken to measure the air quality on the continuous basis by installing the continuous Emission Monitoring System at all stacks of the power plants in order to monitor and control the amount of emission ensuring that the released particle is in the standard criteria according to the notification of the Ministry of Industry and Ministry of Sciences, Technologies and Environment. Currently, Ratchaburi Power Plant have 4 air quality monitoring stations installed in Ban Rai, Ban Rai Sub-district; Ban Bang Ka Do, Ban Sing Sub-district; Ban Don Mot Tanoi, Phaeng Phuay Sub-district; and Ban Khlong Khae, Phong Sawai Sub-district. ● Water Quality Monitoring. The water used in electricity generating process must be treated in the wastewater treatment to ensure quality of water is met standard criteria of Royal Irrigation Department and Department of Industrial Works. Currently the treated water has been used for watering trees in Navarajburirom Public Park. ● Noise Control. The prevention of noise from being within the dangerous and harmful level has always been in the attention of Ratchaburi Power Plant. The anti-noise machinery and equipment was installed in the power plant to reduce the loudness of the noise. In addition, the power plant regularly measures loudness of noise in the power plant area and nearby community areas namely Ban Chao Nua, Ban Rai Sub-district and Ban Sam Ruen, Phikun Thong Sub-district. ● Heat Control. Ratchaburi Power Plant has defined the heat control measures to reduce the dispersion of the heat ray by insulating the equipments of the Power Plant with the temperature higher than 54 degrees Celcius.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Social Responsibility

Due to higher trends of the social responsibility, the Company has put into policy and emphasize on building good relationship and trust among stakeholders particularly in respect of social responsibility in the form of community nearby the plant. The Company positioned itself as çGood Neighboré who would be apart in developing the community, we located. Consequently, the Company initiates various social activities as well as valuable projects for the better life quality of the community covering the areas of 3 districts, 8 sub-districts for the total of 72 villages in Ratchaburi Province consisting Phikun Thong Sub-district, Sam Ruen Sub-district, Tha Rab Sub-district, Bang Pa Sub-district in Muang District area; Ban Rai Sub-district and Phaeng Phuay Sub-district in Damnern Saduak District area; and Ban Sing Sub-district and Donsai Sub-district in Photaram District area. The çRatchaburi Power Plantûs Community Development Projecté has been implemented by the Company in cooperation with the Population and Community Development Association (PDA) to expect peopleûs well being and harmony in communities. The activities being implemented are as follows: ● çRatchaburiromé Public Park Project aims to be a gathering center of the communities in the sub-districts. The communities in 8 sub-districts will have a center for performing activities and for multi-purpose functions such as aerobics, demonstration of environment and information of bio-agricultural plots and energy gardens. The projects are underway in two sub-districts: Phaeng Phuay and Don Sai Sub-districts. The remaining six sub-districts are in the course of making the survey and sites selection process.

Apart from the Ratchaburi Power Plantûs Community Development Project, the Company has supported social activities continuously which consisted of education, youth, religions, sports, culture and tradition, health and sanitation, public health and agriculture. In 2004, there were major activities following below:

Annual Report 2004

Ratchaburi Electricity Generating Holding Public Company Limited

● Village Bank and Revolving Loan Fund Protect is an attempt to promote the establishment of the Village Bank to encourage savings of members and strengthen the existing village funds. The Company also provided knowledge of fund management in order to enhance management skill and business thinking for people in the community. The funds also served as a source of capital and as the beginning of welfare system of community where people could depend on themselves. Today 16 Village Banks under the Ratchaburi Power Plantûs Community Development Project have been established and operated for saving and lending to members. ● Community Development Activities. According to the fact findings of PDA, most people around the plant are found to encounter with the problems of occupations and insufficient income. Under the Ratchaburi Power Plantûs Community Development Project, the Company will help to promote occupational training the people in the areas in order to upgrade their skill and know-how. Recently, the Company had held business management training, built up business networks in the communities and promote household industry and eco-tourism. ● Ban Pa Canal Conservation Project. It is aiming to people awareness of environment. This project will encourage conservation esteem of people who are living 2 sides of Bang Pa canal. In the meantime, the Company will seeks support and cooperation with local government agencies and concerned parties for proper solutions of the canal recovery. Recently, there had canal cleaning campaigns including tree planting along the Bang Pa banks, garbage collection and weed elimination in the canal. ● Activities related to the health and environmental sanitary development. It focuses on education about health and environmental sanitary matters. The Company had done many activities such as providing educational training on garbage elimination and wastewater treatment. Moreover, the Company had provided training of bio liquid fertilizers to reduce the usage of chemical substance that is harmful to crops and their health. Promotion to use the smokeless incinerator, the conduct of the seminar on the protection and control of contagious diseases, workshops on the herbal extraction for controlling insects and seminars on environmental sanitary in household were successfully implemented activities. ● Activities related to the enhancement of the community strength. It emphasizes on promotion and development in providing knowledge to the community leaders and the public by holding seminar on aspects of fund management and accounting. In addition, there were visiting successful activities outside their areas for broaden their perspectives on career improvement, management of village bank, public parks and the agricultural tourism. ● Activities related to the social and political development. These activities are aiming to encourage the people to take part in developing their community on the social aspect including conservation and recovery of local value, custom, and traditions of Songkran and Loy Krathong. The Company also supported in both financial and occupational development to the inferiors and elderly people in the communities. Consequently, the elderly people club, women occupational group and village administration youth organization were established in all 8 Sub-Districts.

●

● ●

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

●

Environmental youth club program that provide knowledge on the environment to the youth and to encourage them to be concerned of the importance of the environmental conservation. The youth camp in Ratchaburi Power Plant. It was an education program for youth to learn more about power plant by using cartoon as a persuasive tool. The support on the construction of the Chalerm Phra Kiat Clock Tower on the occasion of Her Majesty the Queenûs 72nd Birthday Anniversary. Providing support to the 34th National Sports Competition, çRatchaburi Gamesé hosted by Ratchaburi Province. The support of the preparation of Ratchaburiûs football team for the competition in the 34th National Sports Competition. Enhancement of learning project from school to Power Plant as the enhancement of knowledge with respect to the electricity generation with advanced technology and to provide support to students to have the learning opportunity outside the school. Establishment of the Green Learning Classroom Project for the secondary school nearby the plant as the source of knowledge on the electricity energy. The Mobile Medical and Dental Unit service project which facilitate the health check-up and disease treatment for the life quality development on the communityûs public health. The mobile chest X-ray project for the support of the Mobile Medical Unit Project. The support of Buddhist Lent Day activities making merit and presenting the robes to the monks at the end of the Buddhist Lent Day at the respected temples in Ratchaburi Province and other temples located around the Ratchaburi Power Plant area. Aerobic dance project for encouraging the public to exercise for good health and physical strength. The support of the project on learning science outside classrooms in the Scientific Museum by inviting instructors teaching the science subject from schools located around Ratchaburi Power Plant area to participate in the seminar on the scientific knowledge at the National Science Museum Organization. The support of the Ratchaburi Tour 2004 Festival and jointly to have the exhibition boards organized for providing knowledge on the electricity generation process and the environmental management of Ratchaburi Power Plant.

(Mr. Suchart Thada-Thamrongvech) Chairman of the Audit Committee

Annual Report 2004

The Audit Committee of Ratchaburi Electricity Generating Holding Public Company Limited consists of 4 Directors, Mr. Suchart Thada-Thamrongvech acting as Chairman, Mr. Viravat Chlayon, Mr. Viroj Klangboonkrong and Mr. Areepong Bhoocha-oom acting as member of the Committee, with Mr.Thoedpan Indramaha, Director of Internal Audit Division serves as the committeeûs secretary. All committee members are of full qualifications of independent directorship as stipulated in Companyûs Regulations on Companyûs Committee, 2003; not being major shareholder. Therefore, the Committee is free to perform duties independently, free from intervention from shareholders, management and related bodies. The committee members are not staff or counselor of the Company and there is no committee members holding over 0.5 percent of paid up capital of the Company. The Audit Committee has assignments as stipulated in the Companyûs Regulations on Audit Committee 2000. In 2004, the Audit Committee held 4 meetings, with attendance from the Companyûs management and its subsidiary companies, and also the auditor, to gather information and to listen opinions and suggestions useful to companyûs management. Each result was submitted to the Companyûs Board of Directors and its subsidiary companies for acknowledgment at every time. Core activities are summarized as follow: ● Reviewing of quarterly and annual financial statements of the Company and Subsidiaries jointly with Auditor before submitting them to each companyûs Board. The Financial Statements of the Company and its subsidiaries has been done in generally accepted accounting principle with enough disclosure of information involved. ● Reviewing on the appropriation of the entries and also the disclosure of the connected transaction. Most of the entries are under the long-term contract with Electricity Generation Authority of Thailand (EGAT), which is the major shareholder. In addition, the management has reported on the transaction of entries to the Audit Committee in quarterly. ● Reviewing the Companyûs performance to be complied with the Securities and Exchange Act, the Stock Exchange of Thailandûs regulations and other related business laws. ● Reviewing on Performance and Suggestions from Internal Audit Division, operating under audit plan approved by the Committee. The Committee has concluded that there is sufficient and suitable control in the Company and its subsidiaries to be of transparent supervision without any malpractice in essence. Moreover, the Audit Committee has agreed to employ PricewaterhouseCoopers ABAS Limited and appoint Miss Nangnoi Charoenthaveesub (Certified Public Account Registration No.3044) or Mrs. Anothai Leekitwattana ( Certified Public Account Registration No. 3442 ) or Mr. Prasan Chuaphanich (Certified Public Account Registration No.3051) to be the Auditors of the Company and its subsidiaries for the year 2005 in second consecutive year, with auditing fee of 1,570,000 Baht, which is the part of the Company at the amount of 420,000 Baht.

Ratchaburi Electricity Generating Holding Public Company Limited

REPORT OF THE AUDIT COMMITTEE

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

THE BOARD OF DIRECTORS没 REPORT ON ITS RESPONSIBILITY TO FINANCIAL REPORT

The Board of Directors is responsible for the consolidated financial statements and the company financial statements of Ratchaburi Electricity Generating Holding Public Company Limited including financial information as appeared in this annual report. The financial statements were stated in accordance with generally accepted accounting principles, applying the appropriate accounting policies and consistently adhered with careful discretion and best estimation in the preparation. Besides, significant information was disclosed sufficiently in the notes accompanying the financial statements for the benefit of shareholders and investors in a transparent manner. The Board of Directors has provided and maintained the appropriate and efficient internal control system to reasonably ensure that the accounting data are accurate, complete, and sufficient to maintain its assets and to prevent fraud and materially irregular operation. In this regard, the Board of Directors has appointed the Audit Committee to review the accounting policies, the quality of the financial reports, the internal control, and internal audit systems. The opinions of the Audit Committee with regard to the matters, which appear in the Report of the Audit Committee, are already shown in this annual report. The consolidated financial statements and the company financial statements of the Company have been audited by the Company没s Auditor, namely PricewaterhouseCoopers ABAS Limited. In auditing, the Board of Directors provided all relevant information and documents to enable the Auditor to examine and express his opinion in conformity with generally accepted auditing standards. The Auditor没s opinion, which appears in the auditor没s report, is already shown in this annual report. The Board of Directors is of the opinion that the overall internal control system of the Company is satisfactory and can bring about reasonable confidence that the consolidated financial statements and the company financial statements of the Company for the year ending December 31, 2004 are reliable and prepared in conformity with generally accepted accounting principles and carried out accurately in accordance with law and all relevant rules and regulations.

Mr.Cherdpong Siriwit Chairman

Mr.Boonchoo Direksathapon Director and Managing Director

AUDITOR没S REPORT

Nangnoi Charoenthaveesub Certified Public Accountant (Thailand) No. 3044 PricewaterhouseCoopers ABAS Limited Bangkok 14 February 2005

Annual Report 2004

I have audited the accompanying consolidated and company balance sheets as at 31 December 2004, and the related consolidated and company statements of income, changes in shareholders没 equity, and cash flows for the year then ended of Ratchaburi Electricity Generating Holding Public Company Limited and its subsidiaries, and of Ratchaburi Electricity Generating Holding Public Company Limited, respectively. These financial statements are the responsibility of the Company没s management. My responsibility is to express an opinion on these financial statements based on my audit. The consolidated financial statements of Ratchaburi Electricity Generating Holding Public Company Limited and its subsidiaries and the company financial statements of Ratchaburi Electricity Generating Holding Public Company Limited for the year ended 31 December 2003 were audited by another auditor whose report, dated 17 February 2004, expressed an unqualified opinion on those statements. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides 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 2004, and the consolidated and company results of operations, and cash flows for the year then ended of Ratchaburi Electricity Generating Holding Public Company Limited and its subsidiaries, and of Ratchaburi Electricity Generating Holding Public Company Limited, respectively, in accordance with generally accepted accounting principles.

Ratchaburi Electricity Generating Holding Public Company Limited

To the Shareholders of Ratchaburi Electricity Generating Holding Public Company Limited

Ratchaburi Electricity Generating Holding Public Company Limited As at 31 December 2004 and 2003

Balance Sheets Consolidated

ASSETS Notes

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Current Assets Cash and cash equivalents Short-term investments - held-to-maturity Deposits at financial institutions used as collateral Short-term investments used as collateral - Promissory notes and bills of exchange, net Long-term investments used as collateral due within one year - Promissory notes and bills of exchange - Marketable securities - held-to-maturity Trade receivable from a related party, net Advances to and other receivables from related parties Spare parts and supplies, net Other current assets Total Current Assets

Non-Current Assets Advance to a related party Long-term trade receivable from a related party Long-term investments used as collateral - Promissory notes and bills of exchange, net - Marketable securities - held-to-maturity, net Long-term loans to related parties Investments in subsidiaries Interests in joint ventures Property, plant and equipment, net Other non-current assets Total Non-Current Assets Total Assets

3 4 5 5

Company

2004

2003

2004

2003

Baht

571,106,851 689,565,835 2,681,816,163 268,000,000 20,125,936 1,869,914,085

490,195,273 2,611,846,674 -

517,814,339 268,000,000 -

3,756,624,246 4,818,911,823

1,119,510,416 9,777,569 61,169,791 30,895,520 6,645,083,792 2,653,887,347

100,255,043 11,881,663 1,606,726,712 1,557,271,239 33,058,301 137,160,621 16,595,477,251 12,047,265,702

4,140,123 3,950,430 3,110,132,500

2,772,292 20,683,551 809,270,182

19 19 6

19 19 5

19 7 7 8

400,000,000 34,655,815

400,000,000 39,606,646

259,548,312 1,304,623,559 259,958,503 312,259,500 406,807,881 899,607,881 718,200,000 - 24,465,914,491 23,202,112,344 2,558,868,197 1,964,981,489 48,970,618,174 51,068,382,218 43,952,724 55,145,012 8,253,627 7,328,705 5,994,349 6,185,687 52,898,710,509 55,097,182,117 25,415,469,445 23,981,643,043 69,494,187,760 67,144,447,819

28,525,601,945 24,790,913,225

The notes to the consolidated and company financial statements on pages 82 to 108 are an integral part of these financial statements.

Ratchaburi Electricity Generating Holding Public Company Limited As at 31 December 2004 and 2003

Balance Sheets Consolidated

LIABILITIES AND SHAREHOLDERS没 EQUITY Notes

Shareholders没 Equity Share capital Authorised share capital Issued and paid-up share capital Premium on share capital Retained earnings Appropriated - Legal reserve Unappropriated Total Shareholders没 Equity Total Liabilities and Shareholders没 Equity

2003

2004

2003

Baht

4,644,404,729 216,407,284 3,123,950,880 32,784,663 301,600,004 161,270,280

3,208,498,622 460,182,349 2,834,081,181 18,168,238 19,255,107 115,425,531

263,862 -

18,542,610 175,867,069 106,000,000 11,143,322 115,763,048 8,907,733,889

17,940,848 151,802,842 9,286,181 331,430,443 7,166,071,342

399,015 11,143,322 46,050,767 57,593,104

160,589 9,286,181 45,222,026 54,932,658

32,118,445,030 35,242,395,910 32,118,445,030 35,242,395,910 41,026,178,919 42,408,467,252

57,593,104

54,932,658

10 14,500,000,000 14,500,000,000

14,500,000,000 14,500,000,000

14,500,000,000 14,500,000,000 14,500,000,000 14,500,000,000 1,531,778,000 1,531,778,000 1,531,778,000 1,531,778,000

995,371,531 670,971,531 995,371,531 670,971,531 11,440,859,310 8,033,231,036 11,440,859,310 8,033,231,036 28,468,008,841 24,735,980,567 28,468,008,841 24,735,980,567 69,494,187,760 67,144,447,819

The notes to the consolidated and company financial statements on pages 82 to 108 are an integral part of these financial statements.

28,525,601,945 24,790,913,225

Annual Report 2004

Non-Current Liabilities Long-term loans, net Total Non-Current Liabilities Total Liabilities

19 9 19

2004

Ratchaburi Electricity Generating Holding Public Company Limited

Current Liabilities Trade payable Trade payable to a related party Current portion of long-term loans, net Amounts due to related parties Other payables Accrued expenses to a related party Other current liabilities - Corporate income tax payable - Value added tax payable - Unearned income - Dividend payable - Others Total Current Liabilities

Company

Ratchaburi Electricity Generating Holding Public Company Limited For the years ended 31 December 2004 and 2003

Statements of Income Consolidated

Sales Cost of sales

Notes

2004

Baht 39,714,032,943

12,19

Gross profit

Company

2003

2004

Baht 35,528,313,660

(32,173,197,383) (28,204,463,763) 7,540,835,560

7,323,849,897

2003

Baht

Baht -

Administrative expenses

12,19

(462,969,477)

(402,399,943)

(207,881,617) (169,416,489)

Directors没 remuneration

(32,250,273)

(27,345,291)

(19,310,124) (17,119,192)

7,045,615,810

6,894,104,663

(227,191,741) (186,535,681)

Profit (loss) from sales Other income - Management service income

29,527,049

2,222,347

31,049,083

3,805,246

- Interest income

155,889,329

153,520,134

44,953,804

22,644,148

- Others

109,077,509

25,121,358

118,602

97,519

7,340,109,697

7,074,968,502

(151,070,252) (159,988,768)

407,901,835

94,519,635

6,639,486,874 5,584,537,537

7,748,011,532

7,169,488,137

6,488,416,622 5,424,548,769

(1,224,680,371)

(1,702,593,632)

(1,388,348)

(217,140)

Corporate income tax

(36,302,887)

(42,562,876)

Net profit for the year

6,487,028,274

5,424,331,629

4.47

3.74

Operating profit (loss) Share of profit of subsidiaries and joint ventures 7 Profit before interest and tax

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Interest expenses

Basic earnings per share (Baht) Net profit for the year

6,487,028,274 5,424,331,629

The notes to the consolidated and company financial statements on pages 82 to 108 are an integral part of these financial statements.

4.47

3.74

Notes

Premium on share capital Baht 1,531,778,000 1,531,778,000 1,531,778,000 1,531,778,000

Issued and paid-up share capital Baht 14,500,000,000 14,500,000,000 14,500,000,000 14,500,000,000

Annual Report 2004

Ratchaburi Electricity Generating Holding Public Company Limited

The notes to the consolidated and company financial statements on pages 82 to 108 are an integral part of these financial statements.

Opening balance as at 1 January 2004 Legal reserve Net profit for the year Dividend paid Closing balance as at 31 December 2004 Opening balance as at 1 January 2003 Legal reserve Net profit for the year Dividend paid Closing balance as at 31 December 2003

Notes

Premium on share capital Baht 1,531,778,000 1,531,778,000 1,531,778,000 1,531,778,000

Issued and paid-up share capital Baht 14,500,000,000 14,500,000,000 14,500,000,000 14,500,000,000

Statements of Changes in Shareholders没 Equity Retained earnings Baht 8,033,231,036 (324,400,000) 6,487,028,274 (2,755,000,000) 11,440,859,310 6,142,752,391 (271,352,984) 5,424,331,629 (3,262,500,000) 8,033,231,036

Retained earnings Baht 8,033,231,036 (324,400,000) 6,487,028,274 (2,755,000,000) 11,440,859,310 6,142,752,391 (271,352,984) 5,424,331,629 (3,262,500,000) 8,033,231,036

Consolidated Legal reserve Baht 670,971,531 324,400,000 995,371,531 399,618,547 271,352,984 670,971,531 Company Legal reserve Baht 670,971,531 324,400,000 995,371,531 399,618,547 271,352,984 670,971,531

Total Baht 24,735,980,567 6,487,028,274 (2,755,000,000) 28,468,008,841 22,574,148,938 5,424,331,629 (3,262,500,000) 24,735,980,567

Ratchaburi Ratchaburi Electricity Electricity Generating Generating Holding Holding Public Public Company Company Limited Limited As at 31 December 2004 and For the years ended 31 December 2004 and 2003 2003

Ratchaburi Electricity Generating Holding Public Company Limited For the years ended 31 December 2004 and 2003

Statements of Cash Flows

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Consolidated

Cash flows from operating activities Net profit for the year Adjustments to reconcile net profit to net cash provided by operations: - Depreciation - Allowance for obsolescence - Amortisation of deferred financing fee - Goodwill written-off - Unrealised currency exchange (gains)/losses - Shares of profit of investment in subsidiaries and joint ventures - Loss from disposal of fixed assets - Others Cash flows before changes in operating assets and liabilities Changes in operating assets and liabilities: (excluding the effects of acquisition and disposal) - Trade receivable from a related party - Advances to and other receivables from related parties - Spare parts and supplies - Other receivable - Other current assets and non-current assets - Trade payables and trade payable to a related party - Amounts due to related parties and other payables - Accrued expenses to a related party - Other current liabilities Net cash receipts (payments) from operating activities Cash flows from investing activities Net cash receipts (payments) of short-term investments Net cash receipts (payments) of deposits at financial institutions and short-term investments used as collateral Cash receipts from disposals of long-term investments Purchases of long-term investments used as collateral Cash receipts from disposals of long-term investments used as collateral Payment of short-term loan to a related party Receipt from short-term loan to a related party Acquisition of interest in joint ventures Payments for additional call-up shares of a subsidiary Long-term loans to a related party Receipts from long-term loans to a related party Dividends received from a subsidiary and a joint venture Payment for land deposit Purchases of property, plant and equipment Net cash receipts (payments) from investing activities

Company

Notes

2004 Baht 6,487,028,274

2003 Baht 5,424,331,629

2004 Baht 6,487,028,274

2003 Baht 5,424,331,629

8 6 9

2,584,714,824 47,971,101 53,096,703 (17,365,554)

2,514,233,885 53,742,857 9,707,431 (1,272,355)

24,047,740 -

20,757,838 9,707,431 292,319

(407,901,835) 2,679,988 8,750,223,501

(94,519,635) (6,639,486,874) (5,584,537,537) 775,606 44,119 (14,906,177) 839,256 7,892,093,241

(128,410,860)

(128,564,945)

(3,986,245,614) 3,758,105,858 (88,373,379) 8,470,641 (97,426,574) (186,309,674) 90,000,000 2,008,788 (53,096,524) 1,192,131,042 (313,058,564) 31,484,969 (10,649,609) 45,844,749 90,838,346 (85,124,262) 251,741,885 5,764,523,220 11,528,135,600

(1,367,831) 7,391,143 (263,862) 617,167 (122,034,243)

(2,578,205) 28,697,528 (163,068) 12,291,105 (90,317,585)

306,000,000 (2,334,313,357)

302,000,000

(2,404,076,844)

2,913,973,149 (3,387,307,792) 9,134,592 (73,329,353) (174,157,288)

7 7

39,219,761 74,748,583 (427,612,500) - (1,165,711,200) (406,807,882) 241,627,628 219,673,151 (1,200,000) (124,129,620) (304,276,555) (242,335,661) (4,421,896,509)

The notes to the consolidated and company financial statements on pages 82 to 108 are an integral part of these financial statements.

9,134,592 -

(416,250,000) 416,250,000 (420,500,000) (1,346,302,559) (406,807,882) (718,200,000) 225,400,000 5,796,184,727 5,615,309,218 (12,405,452) (8,493,675) 2,847,558,036 3,853,447,576

Ratchaburi Electricity Generating Holding Public Company Limited For the years ended 31 December 2004 and 2003

Statements of Cash Flows Consolidated

Cash flows from financing activities Receipt from short-term loan from a related party Repayment of short-term loan from a related party Repayment of loan from other company Payments of financing leases Repayments on long-term loans Dividends paid to shareholders Net cash payments from financing activities Net increase (decrease) in cash and cash equivalents Beginning balance Ending balance Cash and cash equivalents are made up as follows: - Cash in hand and deposits at financial institutions - Short-term investments - maturity within three months Non-cash transactions: Purchase of machinery and equipment which has not been paid Transfer advance payments to machinery and equipment

2003 Baht

2004 Baht

2003 Baht

800,000,000 - (800,000,000) - (931,284,453) (325,800) (2,469,236) (2,143,435) (2,887,177,884) (2,241,905,697) (2,753,142,859) (3,255,754,993) (2,753,142,859) (3,255,754,993) (5,640,646,543) (6,431,414,379) (2,753,142,859) (3,257,898,428) (118,458,984) 689,565,835 571,106,851

674,824,712 14,741,123 689,565,835

(27,619,066) 517,814,339 490,195,273

505,231,563 12,582,776 517,814,339

159,939,413 411,167,438 571,106,851

22,565,835 667,000,000 689,565,835

139,130,287 351,064,986 490,195,273

10,814,339 507,000,000 517,814,339

283,290,560 79,530,600

450,000 -

1,224,680,371 36,971,336

1,704,333,226 86,195,767

1,388,348 1,246,148

171,347 253,521

Ratchaburi Electricity Generating Holding Public Company Limited

Supplementary information for cash flows: Interest paid Tax paid

2004 Baht

The notes to the consolidated and company financial statements on pages 82 to 108 are an integral part of these financial statements.

Annual Report 2004

Notes

Company

Ratchaburi Electricity Generating Holding Public Company Limited For the years ended December 31, 2004 and 2003

NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 1. General information Ratchaburi Electricity Generating Holding Public Company Limited (the Company) is a public company limited, incorporated and resident in Thailand. The address of its registered office is 19 SCB Park Plaza, Tower 3 East, 20th Floor, Ratchadapisek Road, Jatujak, Jatujak, Bangkok, Thailand. The Company is listed on the Stock Exchange of Thailand. For reporting purposes, the Company and its subsidiaries and joint ventures are referred to as the Group. The principal business of the Group is to generate and sell electricity to the government sector in Thailand and to invest in other companies, whose objectives are equivalent or similar to the Company没s objective, which is the Power Plant business. As at 31 December 2004, the Group employs 140 people. (2003: 135 people).

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

2. Accounting policies

The principal accounting policies adopted 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 B.E. 2535. The accounting principles applied may differ from generally accepted accounting principles adopted in other countries and jurisdictions. The accompanying consolidated and company financial statements are therefore not intended to present the financial position, results of operations and cash flows in accordance with jurisdictions other than Thailand. Consequently, these consolidated and company financial statements are only addressed to those who are informed about Thai generally accepted accounting principles and practices 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 management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses in the reported periods. Although these estimates

2.3 Foreign currency translation Items included in the financ Group are measured using Thai Baht. 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 currency are translated to Thai Baht at the exchange rate prevailing at the balance sheet date. 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 statement of income.

Annual Report 2004

2.2 Group accounting - investments in subsidiaries, and interests in joint ventures 2.2.1 Investments in subsidiaries Subsidiaries, which are those entities in which the Group has power to govern the financial and operating policies, are consolidated. The existence and effect of potential voting rights that are presently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the fair value of the Groupûs share of the identifiable net assets acquired is recorded as goodwill. Inter company transactions, balances and unrealised gains (losses) on transactions between group companies are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group. In the Companyûs separate financial statements, investments in subsidiaries are reported using the equity method of accounting. A list of the Groupûs principal subsidiaries is shown in Note 7. 2.2.2 Interests in joint ventures The Groupûs interests in jointly controlled entities are accounted for by the equity method of accounting in the consolidated and company financial statements. The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that it is attributable to the other venturers. The Group does not recognise its share of profits or losses from the joint venture that result from the Groupûs purchase of assets from the joint ventures until it resells the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in the net realisable value of assets or an impairment loss, the loss is recognised immediately. A list of the Groupûs principal joint ventures is shown in Note 7.

Ratchaburi Electricity Generating Holding Public Company Limited

are based on managementûs best knowledge of current events and actions, actual results may differ from those estimates. For the convenience of the user, an English translation of the consolidated and company financial statements has been prepared from the statutory financial statements that are issued in the Thai language.

2.4 Financial instruments Financial assets carried in the balance sheets include cash and cash equivalents, investments, and trade receivable from a related party. Financial liabilities carried in the balance sheet include trade payable, trade payable from a related party, loans, amounts due to related parties and other payables. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. 2.5 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand, deposits held at call with banks, short-term highly liquid investments with original maturity of three months or less and bank overdrafts. 2.6 Trade accounts receivable Trade accounts receivable are carried at original invoice 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 of the receivable and the amount expected to be collectible. Bad debts are written off during the year in which they are identified.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

2.7 Spare parts and supplies Spare parts and supplies are stated at cost less allowance for obsolescence. Cost is calculated based on the moving average basis. The spare parts are categorised as fuel, specific spare parts and common spare parts. Specific spare parts are used for specific plant equipment in the power plant. The allowance for specific spare parts is calculated using the straight-line method to write off the balances of specific spare parts on hand at the year end over the estimated useful life of the power plant.

2.8 Investments Investments other than investments in subsidiaries and interests in joint ventures are classified as held-to-maturity. 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 noncurrent assets, except for maturities within 12 months from the balance sheet date, which are classified as current assets. Purchases and sales of investments are recognised on the trade date, which is the date that the Group commits to purchase or sell the investments. Cost of investment includes transaction costs. Heldto-maturity investments are carried at amortised cost using the effective yield method. 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 consolidated and company statements of income.

2.9 Intangible assets 2.9.1 Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group没s share of the net identifiable assets of the acquired subsidiary/joint venture at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of joint ventures is included in interests in joint ventures. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold. 2.9.2 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 straightline basis over the period of its expected benefit.

Equipment for the Gas Turbine power plant which is not yet used would be depreciated when it is in use. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Estimated recoverable amount is the higher of the anticipated discounted cash flows from the continuing use of the asset and the amount obtainable from the sale of the asset less any cost of disposal.

Annual Report 2004

Power plant Equipment for Gas Turbine power plant Operating and maintenance equipment Buildings and structures Furniture, fixtures and office equipment Vehicles

Years 25 5 - 25 5 5 and 20 5 5

Ratchaburi Electricity Generating Holding Public Company Limited

2.10 Property, plant and equipment Property, plant and equipment are initially recorded at cost. Plant and equipment are stated at historical cost less accumulated depreciation. Depreciation is calculated using the straight-line method to write off the cost of each asset, except for land which is considered to have an indefinite life, to their residual values over their estimated useful lives as follows:

Repair and maintenance expenses are charged to the income statement during the financial period in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in operating profit. 2.11 Deferred income taxes and income taxes The Group does not recognise income taxes payable or receivable in future periods in respect of temporary differences arising from differences between the carrying amounts and tax base of assets and liabilities in the consolidated or company financial statements. Subsidiaries have certain promotional privileges from the Board of Investment, which include exemption of income tax for a prescribed period (Note 17).

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

2.12 Employees没 benefits The Group operates a provident fund that is a defined contribution plan, the assets of which are held in a separate trust fund and managed by fund managers. The provident fund is funded by payments from employees and by the relevant Group companies. Contributions to the provident fund are charged to the consolidated and company statements of income in the year to which they relate. The Group does not recognise liabilities in respect of employee benefit potentially payable under the Thai Labour Law.

2.13 Revenue recognition A subsidiary has entered into a 25-year Power Purchase Agreement with Electricity Generating Authority of Thailand (EGAT) whereby the subsidiary will deliver the Net Electrical Generation to EGAT. Revenue comprises Availability Payments and Energy Payments. Availability Payments are recognised according to the terms set out in the Power Purchase Agreement, as conditions are met essentially on a time basis, net amount of sales taxes and discounts. Energy Payments are calculated based on electricity delivered. Interest income is recognised on an accrual basis unless collectibility is in doubt. Dividend income is recognised when the shareholder没s right to receive payment is established. Sales within the Group are eliminated in the consolidated financial statements. 2.14 Related parties 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 enterprise, 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. 2.15 Dividends Dividends are recorded in the consolidated and company financial statements in the period in which they are approved by the Annual Shareholders没 meeting. 2.16 Segment reporting The Group engages in the power plant business through its own operations and through investments. Management considers its activities as an integrated and complementary line of business and determines that the Group has only one major industry segment. Moreover, in terms of operating locations and market areas, the Group has only one geographical segment because it operates solely in Thailand. 2.17 Comparatives Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.

3. Cash and cash equivalents Consolidated

411,167,438 571,106,851

667,000,000 689,565,835

2004 Baht 100,000 139,030,287

2003 Baht 50,000 10,764,339

351,064,986 507,000,000 490,195,273 517,814,339

As at 31 December 2004, deposits held at call with banks bear interest at the rate of 0.25% to 1.50% per annum (2003: 0.25% to 0.38% per annum) and short-term investments bear interest at the rate of 1.60% to 1.72% per annum (2003: 1.00% to 1.30% per annum).

4. Short-term investments - held-to-maturity Consolidated 2004 Baht Promissory notes Bills of exchange, net 2,681,816,163 Short-term investments - held-to-maturity 2,681,816,163

2003 Baht 268,000,000 268,000,000

Company 2004 Baht

2003 Baht - 268,000,000 2,611,846,674 2,611,846,674 268,000,000

As at 31 December 2004, short-term investments - held-to-maturity bear interest at the rate of 1.85% to 2.40% per annum (2003: 1.00% to 1.40% per annum).

Annual Report 2004

2003 Baht 133,000 22,432,835

Ratchaburi Electricity Generating Holding Public Company Limited

Cash in hand Deposits held at call with banks Short-term investments - maturity within three months Cash and cash equivalents

2004 Baht 210,000 159,729,413

Company

5. Deposits at financial institutions, short-term and long-term investments used as collateral Deposits at financial institutions, short-term and long-term investments used as collateral are those of a subsidiary and comprise cash reserves required to be maintained under its loan agreements for the purpose of repayment of principal and interest due in the next installment (Debt Service Reserve Requirement). These cash reserves are provided from the proceeds of sales of electricity. As at 31 December 2004, these cash reserves amounted to Baht 1,021.08 million (31 December 2003: Baht 1,254.90 million). The remaining balance of deposits at financial institutions, short-term and long-term investments used as collateral of Baht 4,455.86 million (31 December 2003: Baht 7,091.49 million) represents collateralised deposits maintained in accordance with the loan agreements (Note 9), but which can be used subject to certain lender approval. a) Deposits at financial institutions used as collateral As at 31 December 2004, deposits at financial institutions used as collateral of Baht 20,125,936 bear interest at the rate of 0.25% to 0.38% per annum (2003: Baht 1,869,914,085 and bear interest at the rate of 0.25% to 0.75% per annum). b) Short-term investments used as collateral

Promissory notes Bills of exchange, net Short-term investments used as collateral

Consolidated Held-to-maturity 2004 2003 Baht Baht 1,471,140,000 2,203,025,000 2,285,484,246 2,615,886,823 3,756,624,246 4,818,911,823

Company Held-to-maturity 2004 2003 Baht Baht -

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

As at 31 December 2004, short-term investments used as collateral bear interest at the rate of 1.50% to 1.98% per annum (2003: 0.90% to 2.37% per annum).

c) Long-term investments used as collateral (continued) Consolidated Held-to-maturity 2004 2003 Baht Baht Long-term investments used as collateral - Promissory notes and bills of exchange 1,379,058,728 - Marketable securities 321,128,294 Long-term investments used as collateral 1,700,187,022

Company Held-to-maturity 2004 2003 Baht Baht

1,314,401,128 343,155,020 1,657,556,148

Long-term investments used as collateral due within one year - Promissory notes and bills of exchange 1,119,510,416 - Marketable securities 61,169,791 Long-term investments used as collateral due within one year 1,180,680,207

9,777,569 30,895,520

40,673,089

Long-term investments used as collateral, net - Promissory notes and bills of exchange, net 259,548,312 - Marketable securities, net 259,958,503 Long-term investments used as collateral, net 519,506,815

1,304,623,559 312,259,500 1,616,883,059

Annual Report 2004

Ratchaburi Electricity Generating Holding Public Company Limited

As at 31 December 2004, investments in promissory notes and bills of exchange bear interest at the rate 2.10% to 4.25% per annum (2003 : 2.10% to 3.75% per annum). As at 31 December 2004, investments in marketable securities bear interest at the rate of 2.54% to 5.81% per annum (2003: 2.54% to 5.81% per annum).

The maturity of long-term investments used as collateral is as follows: Consolidated Held-to-maturity 2004 2003 Baht Baht - Within 1 year 1,179,667,412 39,828,520 - Later than 1 year and not later than 5 years 511,162,380 1,614,125,852 - Later than 5 years 3,808,360 6,013,300 Total 1,694,638,152 1,659,967,672 Add Premium/(Discount) 5,548,870 (2,411,524) 1,700,187,022 1,657,556,148 Less Current portion (1,180,680,207) (40,673,089) 519,506,815 1,616,883,059

Company Held-to-maturity 2004 2003 Baht Baht -

6. Spare parts and supplies, net Consolidated

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Fuel Specific spare parts Common spare parts Spare parts in transit Total Less Allowance for obsolescence Spare parts and supplies, net

2004 Baht 572,164,026 1,077,680,386 1,194,883 3,658,518 1,654,697,813 (47,971,101) 1,606,726,712

2003 Baht 484,650,705 939,764,989 1,417,633 131,437,912 1,557,271,239 1,557,271,239

Company 2004 Baht

Allowance for obsolescence represents allowance against specific spare parts.

2003 Baht -

7.2 Investments in subsidiaries and interests in joint ventures are as follows:

As at

Investments in subsidiaries Interests in joint ventures Total investments in subsidiaries and interests in joint ventures

Consolidated 31 December 31 December 2004 2003 , Baht 000 Baht,000

Company 31 December 31 December 2004 2003 , Baht 000 Baht,000

2,558,868

1,964,981

24,465,914 -

23,202,112 -

2,558,868

1,964,981

24,465,914

23,202,112

Annual Report 2004

7.1 The Group没s principal subsidiaries and joint ventures are as follows: Subsidiaries Ratchaburi Electricity Generating Company Limited, a 99.99% owned subsidiary of the Company, was incorporated as a limited company in Thailand to develop and operate the Ratchaburi Power Plant comprising Thermal Generating Units and Combined Cycle Generating Units. The output is sold to EGAT under a 25-year Power Purchase Agreement according to the Private Participation Plan in the Ratchaburi Power Plant Project. Ratchaburi Energy Company Limited, a 99.99% owned subsidiary of the Company, was incorporated as a limited company in Thailand to develop and operate power plant including investing in the power energy business. Ratchaburi Gas Company Limited, a 99.99% owned subsidiary of the Company from 14 November 2003, was incorporated as a limited company in Thailand to invest in the power energy business. Ratch Udom Power Company Limited, a 99.99% owned subsidiary of the Company, was incorporated as a limited company in Thailand to invest in the power energy business. Ratchaburi Alliances Company Limited, a 99.99% owned subsidiary of Ratch Udom Power Company Limited, was incorporated as a limited company in Thailand to invest in the power energy business. Joint ventures Tri Energy Company Limited, a 37.50% owned joint venture of Ratchaburi Gas Company Limited, was incorporated as a limited company in Thailand to generate electricity for sale solely to EGAT under a 20-year Power Purchase Agreement. Ratchaburi Power Company Limited, a 25% owned joint venture of Ratchaburi Alliances Company Limited, was incorporated as a limited company in Thailand to develop the 1,400-Megawatt power project inside the existing power plant complex of Ratchaburi Electricity Generating Company Limited in Ratchaburi province. Siam Ethanol Exports Company Limited, a 15% owned joint venture of Ratchaburi Energy Company Limited, was incorporated as a limited company in Thailand to produce ethanol for export.

Ratchaburi Electricity Generating Holding Public Company Limited

7. Investments in subsidiaries and interests in joint ventures

The movements in investments in subsidiaries and interests in joint ventures can be analysed as follows: Consolidated Baht,000

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

For the year ended 31 December 2004 Opening book value Acquisition of interests in joint ventures (Note 7.3) Additional call-up of shares of a subsidiary Share of profit of subsidiaries and joint ventures Dividends received from a subsidiary and a joint venture Closing book value

Company Baht,000

1,964,981 427,612 407,902

23,202,112 420,500 6,639,487

(241,627) 2,558,868

(5,796,185) 24,465,914

Ratch Udom Power Company Limited In April 2004, Ratch Udom Power Company Limited, a wholly owned subsidiary of the Company, issued 42,050,000 new ordinary shares at a par value of Baht 10, which were priced at Baht 10. The Company purchased the newly issued shares for a total consideration of Baht 420.50 million. Dividends received from a subsidiary During the year ended 31 December 2004, Ratchaburi Electricity Generating Company Limited approved the payment of dividends in the amount of Baht 2,853.59 million in respect of 2003 performance; these dividends were received in May 2004. It also approved the payment of interim dividends in the amount of Baht 2,942.59 million in respect of 2004 performance. The dividends were received in October 2004. Dividends received from a joint venture During the year ended 31 December 2004, Tri Energy Company Limited approved the payment of dividends in the amount of Baht 241.63 million, according to 37.50% interest in this joint venture. Ratchaburi Gas Company Limited received the dividends in the amount of Baht 104.51 million in June 2004 and in the amount of Baht 137.12 million in December 2004.

The principal subsidiaries, which are all incorporated in Thailand, are as follows: Company 31 December 2004 Portion of Cost Equity Investment Method Method Dividend Business (%) Baht,000 Baht,000 Baht,000 Ratchaburi Electricity Generating Co., Ltd. Electricity generating 99.99 18,275,000 22,243,807 5,796,185 Ratchaburi Energy Co., Ltd. and its joint Electricity generating 99.99 190,000 158,657 venture Siam Ethanol Exports Co., Ltd. (not yet operating) and investing in power energy business Ratchaburi Gas Co., Ltd. Investing in power 99.99 500,000 1,677,807 (formerly Banpu Gas Power Co., Ltd.) energy business and its joint venture Tri Energy Co., Ltd. Ratch Udom Power Co., Ltd. and its subsidiary Investing in power 99.99 420,900 385,643 Ratchaburi Alliances Co., Ltd and its joint energy business venture Ratchaburi Power Co.,Ltd. 19,385,900 24,465,914 5,796,185

Investing in power energy business

99.99

500,000

1,246,712

99.99

400

339

18,965,400

23,202,112

5,615,309

Annual Report 2004

Ratchaburi Gas Co., Ltd. (formerly Banpu Gas Power Co., Ltd.) and its joint venture Tri Energy Co., Ltd. Ratch Udom Power Co., Ltd.

Ratchaburi Electricity Generating Holding Public Company Limited

Ratchaburi Electricity Generating Co., Ltd. Ratchaburi Energy Co., Ltd.

Business Electricity generating Electricity generating (not yet operating) and investing in power energy business Investing in power energy business

Company 31 December 2004 Portion of Cost Equity Investment Method Method Dividend , , (%) Baht 000 Baht 000 Baht,000 99.99 18,275,000 21,780,361 5,615,309 99.99 190,000 174,700 -

The principal joint ventures, which are all incorporated in Thailand, are as follows:

Tri Energy Co., Ltd. Ratchaburi Power Co., Ltd. Siam Ethanol Exports Co., Ltd.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Tri Energy Co., Ltd.

Business Electricity generating Electricity generating (development phase) Produce Ethanol for export (not yet operating)

Business Electricity generating

Portion of Investment (%) 37.50 25.00 15.00

Portion of Investment (%) 37.50

Consolidated 31 December 2004 Cost Equity Method Method Bahtû000 Bahtû000 1,283,925 2,165,459 416,250 382,203

Dividend Bahtû000 241,627 -

11,362

11,206

1,711,537

2,558,868

241,627

Consolidated 31 December 2004 Cost Equity Method Method Bahtû000 Bahtû000 1,283,925 1,964,981 1,283,925 1,964,981

Dividend Bahtû000 219,673 219,673

7.3 Acquisition of interests in joint ventures 7.3.1 Ratchaburi Power Company Limited On 12 March 2004, Ratchaburi Alliances Company Limited, which is a subsidiary of Ratch Udom Power Company Limited, acquired 25% of the share capital of Ratchaburi Power Company Limited, according to a Shareholders Agreement dated 27 February 2004. The operation of Ratchaburi Power Company Limited is to generate electricity for sale to EGAT over the period of a Power Purchase Agreement (PPA) of 25 years. Net assets acquired in Ratchaburi Power Company Limited and the resulting goodwill are as follows: Million Baht Property, plant and equipment, net 147 Other assets less liabilities (436) Fair value of net assets (289) Goodwill 705 Total purchase consideration 416

Annual Report 2004

Ratchaburi Electricity Generating Holding Public Company Limited

The net assets from the acquisition, as shown above, are stated at the fair value at the date of acquisition. The consideration of Baht 416 million was settled in cash. The net fair value, which is presented as a negative balance of Baht 289 million as at 12 March 2004, was applied as the fair value of the net identifiable assets at the acquisition date. The resulting goodwill of Baht 705 million will be amortised on a straight-line basis from the commencement of commercial operations, currently expected to be the first quarter of 2008, for 25 years, the term of the joint venture没s PPA. 7.3.2 Siam Ethanol Exports Company Limited According to the Share Purchase Agreement and Shareholders Agreement dated 23 September 2004, Ratchaburi Energy Company Limited, which is a wholly owned subsidiary of the Company, acquired 15% of the share capital of Siam Ethanol Exports Company Limited being 1,500 shares with a par value of Baht 100 per share for a total consideration of Baht 150,000. Subsequently, Siam Ethanol Exports Company Limited registered additional share capital of 29.9 million shares with a par value of Baht 10 per share and called for Baht 2.5 per share. On 1 November 2004, Ratchaburi Energy Company Limited purchased additional share capital in the same proportion as its original investment for 4.485 million shares with a par value of Baht 10 per share and paid-up Baht 2.5 per share for a total consideration of Baht 11.21 million. The operation of Siam Ethanol Exports Company Limited is to produce ethanol for export. As a joint shareholder, Ratchaburi Energy Company Limited is entitled to study and develop the biogas production project that utilises waste water from the ethanol production process. This biogas supply could be employed as an alternate fuel for Ratchaburi Energy Company Limited没s power generating projects in the future. The ethanol manufacturing plant will be constructed in January 2005 with an estimated construction period of one year.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

720,974,144 720,974,144

Year ended 31 December 2004 Opening net book value Additions Transfer Depreciation charge (Note 12) Closing net book value

At 31 December 2004 Cost Less Accumulated depreciation Net book value 485,095,540 (100,468,774 ) 384,626,766

399,195,834 195,000 9,945,041 (24,709,109) 384,626,766

474,955,499 (75,759,665) 399,195,834

Buildings and land improvements Baht

55,425,676,589 (8,087,706,539) 47,337,970,050

49,107,781,319 413,891,096 338,739,949 (2,522,442,314) 47,337,970,050

54,673,045,543 (5,565,264,224) 49,107,781,319

433,094,843 433,094,843

731,652,619 27,724,873 (326,282,649) 433,094,843

731,652,619 731,652,619

Power plants, substation & transmission system and operating & Equipment for Gas maintenance Turbine power plant equipment which not yet used Baht Baht

Consolidated

205,651,313 (112,978,219) 92,673,094

89,536,070 23,609,201 17,091,224 (37,563,401) 92,673,094

164,950,889 (75,414,819) 89,536,070

Equipment and vehicles Baht

1,279,277 1,279,277

19,242,232 21,530,610 (39,493,565) 1,279,277

19,242,232 19,242,232

Construction in progress Baht

57,271,771,706 (8,301,153,532) 48,970,618,174

51,068,382,218 486,950,780 (2,584,714,824) 48,970,618,174

56,784,820,926 (5,716,438,708) 51,068,382,218

Total Baht

As at 31 December 2004, land, buildings, power plant and equipment of Ratchaburi Electricity Generating Company Limited, a subsidiary, amounting to Baht 48,832.72 million (As at 31 December 2003: Baht 50,959.60 million) have been mortgaged and pledged as collateral in accordance with the long-term loans agreements (Note 9).

720,974,144 720,974,144

Land Baht

At 31 December 2003 Cost Less Accumulated depreciation Net book value

8. Property, plant and equipment, net

Company Equipment and vehicles Baht At 31 December 2003 Cost Less Accumulated depreciation Net book value Year ended 31 December 2004 Opening net book value Additions Depreciation charge (Note 12) Closing net book value At 31 December 2004 Cost Less Accumulated depreciation Net book value

109,540,624 (54,395,612) 55,145,012 55,145,012 12,855,452 (24,047,740) 43,952,724 122,396,076 (78,443,352) 43,952,724

9. Long-term loans, net The long-term loans are Thai Baht loans as follows:

(53,096,703) 3,123,950,880

(53,096,703) 2,834,081,181

Long-term loans Less Deferred financing fee amortised more than one year Long-term loans, net

32,587,465,910 35,764,513,493

(469,020,880) (522,117,583) 32,118,445,030 35,242,395,910

Total long-term loans Less Deferred financing fee Total long-term loans, net

35,764,513,493 38,651,691,377 (522,117,583) (575,214,286) 35,242,395,910 38,076,477,091

Annual Report 2004

Current portion of long-term loans Less Deferred financing fee amortised within one year Current portion of long-term loans, net

Company 31 December 31 December 2004 2003 Baht Baht Ratchaburi Electricity Generating Holding Public Company Limited

As at

Consolidated 31 December 31 December 2004 2003 Baht Baht 3,177,047,583 2,887,177,884

The movements in the long-term loans can be analysed as follows: Consolidated Baht For the year ended 31 December 2004 Opening net book amount Additions Repayments Amortisation of deferred financing fee Closing net book amount

38,076,477,091 (2,887,177,884) 53,096,703 35,242,395,910

Company Baht -

The maturity of long-term loans can be analysed as follows:

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Consolidated Company As at 31 December 31 December 31 December 31 December 2004 2003 2004 2003 Baht Baht Baht Baht - Within 1 year 3,177,047,583 2,887,177,884 - Later than 1 year and not later than 5 years 12,826,100,910 12,772,539,576 - Later than 5 years 19,761,365,000 22,991,973,917 35,764,513,493 38,651,691,377 -

On 9 October 2000, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into long-term loans agreements in Thai Baht with several banks and financial institutions to borrow under credit facilities of Baht 44,000 million which comprised Tranche A credit facilities of Baht 42,500 million and Tranche B credit facilities of Baht 1,500 million. However, the subsidiary cancelled the Tranche B credit facilities of Baht 1,500 million on 22 July 2002. Long-term loan of Baht 42,500 million was for the purchase of the Thermal Power Plant Units 1 and 2 and Combined Cycle Plant Blocks 1-3 (Tranche A). It is subject to a floating interest rate at the average Minimum Lending Rate (MLR) of four banks. On 31 October 2000, the subsidiary made the initial drawdown from the Tranche A1 loan for the amount of Baht 18,475 million. The principal is repayable in 53 quarterly installments commencing from 28 September 2001 and interest is payable monthly. On 18 April 2002, the subsidiary made the second drawdown from the Tranche A2 loan for the amount of Baht 18,716 million. The principal is repayable in 52 quarterly installments commencing from 28 June 2002 and interest is payable monthly. And on 1 November 2002, the subsidiary made the final drawdown from the Tranche A3 loan for the amount of Baht 5,246.5 million. The principal is repayable in 49 quarterly installments commencing from 31 December 2002 and interest is payable monthly. The subsidiary has used its cash from operations of Baht 62.5 million rather than drawing down a portion of the Tranche A3 loan.

The subsidiary entered into the First Amendment and the Second Amendment to the loan agreement on 20 June 2002 and 27 June 2003, respectively with several banks and financial institutions, who had agreed to provide a long-term loan facility for acquiring power plants of Baht 42,500 million, to reduce the applicable interest rate from the floating rate based on the average Minimum Lending Rate (MLR) announced by the four local commercial banks to the following rates. Periods

Interest Rate (%) MLR - 1.5 MLR - 2.5 MLR - 1.125 MLR

1 July 2002 - 30 June 2003 1 July 2003 - 30 June 2005 1 July 2005 - 30 June 2008 1 July 2008 and thereafter

In addition, the banks and financial institutions agreed to reduce the Debt Service Reserve Requirement from a reserve amount sufficient to repay the principal and interest for the next six-month period to a reserve amount sufficient to repay the principal and interest for the next three-month period, effective from 1 July 2003 onwards. The long-term loans are secured with land, buildings, power plant and equipment of a subsidiary. The subsidiary has to maintain cash reserves which are provided from the proceeds of sales of electricity for the purpose of repayment of principal and interest in the next installment (Note 5). In addition, the Power Purchase Agreement, the Asset Purchase Agreement, the Major Maintenance Agreement, insurance policies and other related agreements with the lenders have been assigned as collateral in accordance with the conditions under the Loan Agreement.

10. Share capital and premium on share capital

As at 31 December 2004, the total authorised number of ordinary shares is 1,450,000,000 shares (31 December 2003: 1,450,000,000 shares) with a par value of Baht 10 per share (31 December 2003: Baht 10 per share). All issued shares are fully paid.

Annual Report 2004

As at 1 January 2004 Issue of shares As at 31 December 2004

Ordinary Premium on Shares Share Capital Total Baht Baht Baht 1,450,000,000 14,500,000,000 1,531,778,000 16,031,778,000 1,450,000,000 14,500,000,000 1,531,778,000 16,031,778,000

Ratchaburi Electricity Generating Holding Public Company Limited

Number of Shares

11. Legal reserve

Opening balance Appropriation during the year Closing balance

Consolidated 2004 2003 Baht Baht 670,971,531 399,618,547 324,400,000 271,352,984 995,371,531 670,971,531

Company 2004 2003 Baht Baht 670,971,531 399,618,547 324,400,000 271,352,984 995,371,531 670,971,531

Under the Public Companies Act B.E. 2535, the Company is required to set aside as a statutory reserve at least 5% of its net profit until the reserve is not less than 10% of the registered capital. The reserve is non-distributable.

12. Operating profit (loss) The following expenditure items have been charged in arriving at operating profit (loss):

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Fuel cost Depreciation on property, plant and equipment (Note 8) Service charges for operation and maintenance expenses Spare parts, repair and service charges for major maintenance Premium insurance Staff costs Amortisation of deferred financing fee

100

Consolidated 2004 2003 Baht Baht 28,118,503,895 23,535,651,880

Company 2004 Baht

2003 Baht -

2,584,714,824

2,514,233,885

24,047,740

20,757,838

724,808,559

691,418,445

388,324,627 225,144,954 137,850,082 53,096,703

1,028,665,047 330,698,100 103,133,286 53,742,857

79,457,710 -

57,308,665 -

13. Earnings per share Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year. Consolidated 2004 2003 Net profit attributable to shareholders (Baht) 6,487,028,274 Weighted average number of ordinary shares in issue (share) 1,450,000,000 Basic earnings per share (Baht) 4.47

Company 2004

2003

5,424,331,629

6,487,028,274 5,424,331,629

1,450,000,000 3.74

1,450,000,000 1,450,000,000 4.47 3.74

There are no dilutive potential ordinary shares in issue during the years presented, so no diluted earnings per share are presented.

14. Dividends At the Board of Directorsû meeting held on 13 September 2004, it was approved to pay interim dividends in respect of 2004 performance for 1,450 million shares of Baht 0.90 per share, totalling Baht 1,305 million. These dividends were paid to shareholders in October 2004. At the Annual Shareholdersû meeting held on 12 April 2004, it was approved to pay final dividends in respect of 2003 performance as follows: (a) Interim dividends for 1,450 million shares of Baht 0.75 per share, totalling Baht 1,087.50 million. These interim dividends were paid to shareholders in September 2003. (b) Dividends for 1,450 million shares of Baht 1.00 per share, totalling Baht 1,450 million. These dividends were paid to shareholders in May 2004. At the Annual Shareholdersû meeting held on 11 April 2003, it was approved to pay dividends in respect of 2002 performance for 1,450 million shares of Baht 1.50 per share, totalling Baht 2,175 million. These dividends were paid to shareholders in May 2003.

15. Directorsû remuneration Directorsû remuneration for the year ended 31 December 2004 in the consolidated and company statements of income is Baht 32.25 million and Baht 19.31 million, respectively (2003: Baht 27.35 million and Baht 17.12 million, respectively) and comprises meeting fees and bonus. Expenses were approved at the Annual Shareholdersû meeting.

16. Provident fund

Ratchaburi Electricity Generating Company Limited On 22 November 2000, Ratchaburi Electricity Generating Company Limited, a subsidiary, received promotional privileges from the Office of the Board of Investment for two promotional certificates comprising Thermal Generating Power Plant and Combined Cycle Generating Power Plant. Under these privileges, the subsidiary has received exemption from certain taxes and duties as detailed in the certificates, including exemption from corporate income tax for a period of 8 years from the date of the first revenue earned (31 October 2000 for the Thermal Generating Power Plant and 18 April 2002 for the Combined Cycle Generating Power Plant). As a promoted entity, the subsidiary is required to comply with the terms and conditions as specified in the promotional certificates.

Annual Report 2004

17. Promotional privileges

Ratchaburi Electricity Generating Holding Public Company Limited

The Group joined the contributory employeesû provident fund of Electricity Generating Authority of Thailand (EGAT) for their employees. Membership to the fund is on a voluntary basis. The contributions comprise the employeesû and the Groupûs contribution at the same rate. The funds are managed by authorised fund managers in accordance with the Provident Fund Act B.E. 2530.

101

The revenues for promoted and non-promoted business activities for the years ended 31 December 2004 and 2003 are as follows:

BOI promoted activities Non BOI promoted activities

2004 Baht 39,738,015,697 205,173,166 39,943,188,863

2003 Baht 35,541,163,724 142,051,621 35,683,215,345

Ratchaburi Energy Company Limited On 19 November 2004, Ratchaburi Energy Company Limited, a subsidiary, received promotional privileges from the Office of the Board of Investment for the Small Hydro Power Plant Project, namely Pasak Cholasid. Under these privileges, the subsidiary has received exemption from certain taxes and duties as detailed in the certificate, including exemption from corporate income tax for amounts not exceeding 100% of capital investment less cost of land and working capital or Baht 250 million, whichever is lesser, for a period of 8 years from the date of the first revenue earned. As a promoted entity, the subsidiary is required to comply with the terms and conditions as specified in the promotional certificate. As at 31 December 2004, this subsidiary has not yet operated.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

18. Financial instruments

102

Foreign Currency Risk The Group has no significant foreign currency risk since the major business transactions of the Group are carried out in Thai Baht. In respect of currency exchange risk, which mainly relates to the purchase of spare parts and maintenance expenses in US Dollars, the Group manages its short-term exchange risk by entering into forward exchange contracts, normally of a maturity of no more than 30 days. In addition, the pricing formula contained in the PPA with EGAT allows for the inclusion of the exchange risk factor relating to the purchase of spare parts and maintenance expenses. Trading for speculative purposes is prohibited. All derivative transactions are subject to approval by the managing director of each company before execution. Decisions on the level of risk undertaken are confined to the managing director of each company, which has established limits by transaction type and by counter party. 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 institutions. The Group没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. The Group has no significant credit risk with any single counterparty or group counterparties as the only customer of the Group is EGAT, a State Enterprise.

Interest Rate Risk Interest rate risk arises from the fluctuations in market interest rates, which may have a negative effect on current and future operations of the Group. Management believes that exposure to interest rate risk is minimal because the floating interest rate according to the condition in the long-term loans agreements (Note 9) is included in the availability payment as specified in the Power Purchase Agreement (Note 20). Therefore, the Group does not enter into a hedging agreement to protect against such risk.

19. Related party transactions A major shareholder of the Company is the Electricity Generating Authority of Thailand (EGAT), which holds 45% of the Companyûs total ordinary shares, and EGAT Employeeûs Provident Fund, which holds about 3% of the Companyûs total ordinary shares. The Companyûs remaining shares are widely held. Information regarding the Companyûs subsidiaries and joint ventures is shown in Note 7. During the year, the Group has entered into a number of transactions with related parties; the terms are agreed in the agreement and are in the ordinary course of business and according to normal trade conditions. Purchases of fuel oil and electricity from EGAT are at market price. Details of the agreements made with the related parties are shown in Note 20. The following material transactions were carried out with related parties: (a) Sales, management service income, interest income and other income

2004 Bahtû000

2003 Bahtû000

39,714,033

35,528,314

29,527

2,222

1,522 29,527

1,583 2,222

9,133

10,704 9,133

1,739 -

83,811

12,208

Other income in the consolidated statement of income for the year ended 31 December 2004 included a claim for maintenance of machinery and equipment incurred during the warranty period which can be claimed from EGAT amounting to Baht 81.75 million. The Group recorded this as other receivables from related parties in the consolidated balance sheet as at 31 December 2004.

Annual Report 2004

Sales - Electricity Generating Authority of Thailand Management service income - Subsidiaries - Joint ventures Interest income - Subsidiaries - Joint ventures Other income - Electricity Generating Authority of Thailand

Company

Ratchaburi Electricity Generating Holding Public Company Limited

For the year ended 31 December

Consolidated 2004 2003 Bahtû000 Bahtû000

103

(b) Purchases of goods and services and interest expense

For the year ended 31 December Purchases of fuel oil - Electricity Generating Authority of Thailand Purchases of electricity - Electricity Generating Authority of Thailand Operation and major maintenance expenses - Electricity Generating Authority of Thailand Interest expense - Subsidiary

Consolidated 2004 2003 Bahtû000 Bahtû000

Company 2004 Bahtû000

2003 Bahtû000

3,081,595

1,281,920

132,883

147,049

773,554

992,459

1,275

(c) Outstanding balances arising from sales/ purchases of goods and services Consolidated 31 December 31 December 2004 2003 Bahtû000 Bahtû000

As at

Company 31 December 31 December 2004 2003 Bahtû000 Bahtû000

Trade receivable from a related party, net - Electricity Generating Authority of Thailand

6,645,084

2,653,887

Trade receivable from a related party Less Allowance for doubtful accounts Trade receivable from a related party, net

6,649,958 (4,874) 6,645,084

2,783,177 (129,290) 2,653,887

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Outstanding trade receivable from a related party, net can be analysed as follow:

104

As at

Up to 3 months 3 - 6 months 6 - 12 months Over 12 months Trade receivable from a related party Less Allowance for doubtful accounts Trade receivable from a related party, net

Consolidated 31 December 31 December 2004 2003 Bahtû000 Bahtû000 6,649,958 2,783,177 6,649,958 2,783,177 (4,874) (129,290) 6,645,084 2,653,887

(c) Outstanding balances arising from sales/ purchases of goods and services (continued) Consolidated 31 December 31 December 2004 2003 Bahtû000 Bahtû000

As at

Long-term trade receivable from a related party - Electricity Generating Authority of Thailand Trade payable to a related party - Electricity Generating Authority of Thailand Amounts due to a related party - Electricity Generating Authority of Thailand Accrued expenses to a related party - Electricity Generating Authority of Thailand

Company 31 December 31 December 2004 2003 Bahtû000 Bahtû000

34,656

39,607

216,407

460,182

32,785

18,168

264

161,270

115,425

(d) Amounts due from/ to, advances and loans to related parties

96,621 3,634

9,504 2,378

506 3,634

394 2,378

400,000

406,808

492,800 406,808

718,200 -

Advance to a related party amounting to Baht 400 million is advance for the fuel oil handling system. EGAT has completed construction of this system and will transfer it to a subsidiary within the first quarter of 2005. Long-term loan to Ratchaburi Gas Company Limited, a subsidiary, amounting to Baht 492.80 million is promissory note at call which bears interest at the rate of 1.50% per annum (31 December 2003: Baht 718.20 million bearing interest at the rate of 1.50% per annum). The Company classifies as long-term loan because the subsidiary will repay this loan when it receives dividend from its investment in joint venture, Tri Energy Company Limited.

Annual Report 2004

Advances to and other receivables from related parties - Electricity Generating Authority of Thailand - Subsidiaries - Joint ventures Advance to a related party - Electricity Generating Authority of Thailand Long-term loans to related parties - Subsidiary - Joint venture

Company 31 December 31 December 2004 2003 Bahtû000 Bahtû000

Ratchaburi Electricity Generating Holding Public Company Limited

As at

Consolidated 31 December 31 December 2004 2003 Bahtû000 Bahtû000

105

Long-term loan to Ratchaburi Power Company Limited, a joint venture, amounting to Baht 406.81 million is in form of loan agreement with the repayment period within 2 years from the earlier of the date that the joint venture received such loan from the Company, or get approval of the loan from financial institutions. The loan bears interest at the rate of 3.125% per annum (31 December 2003: nil).

20. Commitments and contingent liabilities

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

a) Commitments and contingent liabilities Company Corporate guarantee According to the Shareholders Agreement dated 27 February 2004 (Note 7.3.1), the Company has committed to guarantee to banks an amount of Baht 175 million to secure certain obligations under the Power Purchase Agreement which Ratchaburi Power Company Limited, a jointly controlled entity, has made with EGAT. In addition, according to this Shareholders Agreement, Ratchaburi Alliances Company Limited agrees to increase the registered capital of Ratchaburi Power Company Limited and subscribe for such new shares at a proportion of 25% up to the maximum aggregate amount of US Dollars 52.5 million, which is equivalent to Baht 2,100 million, or until the completion of the project upon the prior approval of all shareholders.

106

Subsidiaries Land Lease Agreement On 7 June 2004, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a land lease agreement with Ratchaburi Power Company Limited to let Ratchaburi Power Company Limited lease an area of 43 rais in the Ratchaburi Power Plant area for a power plant project for a period of 25 years and 3 months commencing from its commercial operation date. Shareholders Agreement According to the Shareholders Agreement dated 23 September 2004 (Note 7.3.2), all shareholders agree to increase the registered capital of Siam Ethanol Exports Company Limited of Baht 299 million consisting of 29.9 million shares with a par value of Baht 10 per share. After the capital increase, the registered capital of such company shall be Baht 300 million consisting of 30 million shares with a par value of Baht 10 per share. In addition, according to this Shareholders Agreement, Ratchaburi Energy Company Limited, a subsidiary, agrees to provide financial support in the form of shareholder loans or guarantees to Siam Ethanol Exports Company Limited in proportion to Ratchaburi Energy Company Limited没s shareholding of 15%, should the Siam Ethanol Exports Company Limited require additional funding from the paid up capital. Letter of guarantees As at 31 December 2004, Ratchaburi Electricity Generating Company Limited, a subsidiary, has a letter of guarantee provided by a bank in respect of electricity usage amounting to Baht 60.34 million and has commitments under a letter of credit issued by a bank for the purchase of machinery amounting to Baht 18.20 million.

Joint ventures Development fee According to the new Shareholder Agreement dated 27 February 2004, Ratchaburi Power Company Limited, a joint venture, is committed to pay a development fee of US Dollars 2.5 million (represented 25% of our proportion) to the shareholders for services rendered in connection with the development of the project. The development fee is due on financial close of this joint venture. Claim from a foreign supplier In January 2004, Ratchaburi Power Company Limited, a joint venture, obtained a demand letter from a foreign supplier claiming for damages of US Dollars 2.55 million (represented 25% of our proportion) with respect to the discontinuation of the Hin Krut power plant project. The management of the joint venture anticipates that there will be no loss resulting to the claim and no provision has been made.

Annual Report 2004

Subsidiary Power Purchase Agreement with a related party On 9 October 2000, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a 25-year Power Purchase Agreement with EGAT whereby the subsidiary will deliver the Net Electrical Generation from the Thermal Generating Units 1 and 2 and the Combined Cycle Generating Blocks 1, 2 and 3 to EGAT at the agreed condition. Under the PPA, the subsidiary is compensated for the availability of the facility (the Availability Payment) and for the sale of electricity (the Energy Payment). The availability payment is indexed for inflation and foreign exchange movements for the part relating to maintenance, and compensates for the financing of the power plant construction. Fuel Purchase Agreements On 27 October 2000, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a 25-year Gas Sales Agreement with PTT Public Company Limited (PTT) whereby PTT will supply natural gas to the subsidiary at an agreed quantity and price. On 29 August 2002 and 30 September 2002, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a memorandum of understanding relating to the combustion system improvement for Ratchaburi Power Plant with EGAT and PTT to improve the combustion system in order to match with gas with heat rate at 803 - 858 BTU per Square Feet, which was different from the rate specified in the agreement (730 - 800 BTU per Square Feet). In this regard, the subsidiary would receive compensation

Ratchaburi Electricity Generating Holding Public Company Limited

b) Significant agreements Company Office rental Agreement On 12 March 2004, the Company renewed the office building rental agreement with a local company for a period of three years at a rental charge of Baht 8.1 million per annum. The Company paid the deposit of Baht 2 million, which is presented under other non-current assets in the balance sheet as at 31 December 2004.

107

for damage to equipment, fuel costs, etc. In 2004, the subsidiary received such compensation for combustion system improvement amounting to Baht 106 million, which was recorded as unearned income in the consolidated balance sheets as at 31 December 2004 because such improvements have not yet performed. On 1 June 2004, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a 3-year Diesel Purchase Agreement with PTT Public Company Limited (PTT) whereby PTT will supply diesel to the subsidiary at the agreed quantity and price. Supply of Parts and Maintenance Services Agreement On 26 September 2001, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a supply and/or repair of parts agreement for the Combined Cycle Generating of Ratchaburi Power Plant with the Consortium of General Electric International Operations Co., Inc. and GE Energy Parts, Inc. for a period of 12 years with a total contract price of US Dollars 264 million. As at 31 December 2004, the subsidiary has outstanding commitments amounting to US Dollars 202 million. Operation and Maintenance Agreement and Other Service Agreement from a related party On 26 October 2000, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into an Operation and Maintenance Agreement with EGAT for a period of approximately 9 years whereby EGAT will operate and provide maintenance services including general maintenance and major overhaul for the subsidiary. The original operation and maintenance charge is approximately Baht 633 million per annum, adjusted by the annual Consumer Price Index. In addition, there is an additional charge, which is based on the actual costs incurred. On 1 August 2002, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a Parts Management Agreement for Gas Turbine Model MS9001FA with EGAT for a period of 12 years with an original contract price of Baht 12 million per annum, adjusted by the annual Consumer Price Index. In addition, there is an additional charge, which is based on the actual costs incurred.

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

21. Post balance sheet events

108

At the Board of Directors没 meeting of Ratchaburi Energy Company Limited held on 18 January 2005, it was approved to pay for additional paid up capital of Siam Ethanol Exports Company Limited for 4.485 million shares with a par value of Baht 10 per share and called for additional paid-up capital of Baht 2 per share, totalling Baht 8.97 million within 25 February 2005. Ratchaburi Gas Company Limited, a subsidiary, has submitted the notice to purchase 12.50% of total ordinary shares of Tri Energy Company Limited from the existing shareholder for a total consideration of US dollars 13.70 million or approximately Baht 548 million. The completion date for share transferring and payment will be on 9 March 2005. This results in Ratchaburi Gas Company Limited没s interest in this joint venture increase from 37.50% to 50.00%.

Company没s General Infomation List of Subsidiaries and Associated Company of Ratchaburi Electricity Generating Holding Public Company Limited Company Name 1 Ratchaburi Electricity Generating Holding Public Company Limited

Type of Business

Authorized Paid-up Shareholding Capital Capital Proportion (Million Baht ) (Million Baht ) (%)

holds shares in 14,500.00 14,500.00 various companies for investment in the power generation

Location

19 Siam Commercial Bank Park Plaza, Building 3 East, 20th FL, Ratchadapisek Rd, Jatujak, Jatujak, Bangkok 10900 Tel. : 02978 5000 Fax : 0 2937 9321

99.99

128 Moo 6 Phikun Thong Subdistrict, Mueang District, Ratchaburi Province 70000 Tel. : 0 2978 5111-9, 0 3236 5740 ext. 3210 Fax : 0 2978 5110 0 3236 5740 ext. 3204 19 Siam Commercial Bank Park Plaza, Building 3 East, 21st FL, Ratchadapisek Rd, Jatujak, Jatujak, Bangkok 10900 Tel. : 0 2978 5200 Fax : 0 2937 9541 19 Siam Commercial Bank Park Plaza, Building 3 East, 20th FL, Ratchadapisek Rd, Jatujak Jatujak, Bangkok 10900 Tel. : 0 2978 5000 Fax : 0 2937 9321 19 Siam Commercial Bank Park Plaza, Building 3 East, 20th FL, Ratchadapisek Rd, Jatujak, Jatujak, Bangkok 10900 Tel. : 0 2978 5000 Fax : 0 2937 9321 19 Siam Commercial Bank Park Plaza, Building 3 East, 20th FL, Ratchadapisek Rd, Jatujak, Jatujak, Bangkok 10900 Tel. : 0 2978 5000 Fax : 0 2937 9321

Power Generation

18,275.00 18,275.00

3 Ratchaburi Energy Company Limited

invests in small power 190.00 plant and hydro power plant business

190.00

99.99

4 Ratchaburi Gas Company Limited

hold shares in other companies engaging in the power generating business

500.00

99.99

5 Ratch Udom Power Company Limited

hold shares in other companies investing in the power generating business

420.90

99.99

6 Ratchaburi Alliances Company Limited

hold shares in other companies engaging in the power generating business

420.90

99.99

Annual Report 2004

2 Ratchaburi Electricity Generating Company Limited

Ratchaburi Electricity Generating Holding Public Company Limited

Subsidiaries

109

Company Name

Associated Company 7 Tri Energy Company Limited

Ratchaburi Electricity Generating Holding Public Company Limited

Annual Report 2004

Authorized Paid-up Shareholding Capital Capital Proportion (Million Baht) (Million Baht) (%)

Power Generation

3,423.80

37.50

Power Generation

1,665.00

25.00

9 Siam Ethanol Exports Company Power Generation Limited

300.00

75.75

15.00

8 Ratchaburi Power Company Limited

110

Type of Business

Location

1550 Thanaphum Building 16th FL, New Petchburi Road Ratchathewi, Makkasan, Bangkok 10320 Tel. : 0 2207 0307-14 Fax : 0 2207 0315-16 1828 Sukhumvit Rd. Bangjark, Prakanong, Bangkok Tel. : 0 2311 5111 Fax : 0 2332 3882 310 Jaransanitwong Rd. Bang Yee Khan, Bangplad, Bangkok Tel. : 0 2424 0515 Fax : 0 2433 1336

OTHER REFERENCE PERSONS Share Registrar Thailand Securities Depository Company Limited The Stock Exchange of Thailand Building, 62 Ratchadapisek Road, Klongtoey, Bangkok 10110 Tel. : 0 2229 2800 0 2654 5599 Fax : 0 2359 1259

Auditor PricewaterhouseCoopers ABAS Limited 15th floor, Bangkok City Tower, 179/74-80 South Sathorn Road, Bangkok 10120 Tel. : 0 2286 9999 Fax : 0 2286 5050

Legal Advisor Siam Niti Law Office Company Limited 12th Floor, Tower 1 West, SCB Park Plaza, 18 Ratchadapisek Road, Jutujak, Jutujak, Bangkok 10900 Tel. : 0 2937 5000 Fax : 0 2397 5001 Linklaters (Thailand) Limited 20th Floor, Capital Tower, All Seasons Place, 87/1 Wireless Road, Bangkok 10330 Tel. : 0 2305 8000 Fax : 0 2305 8010 White & Case (Thailand) Company Limited 4-5th Floor, Gaysorn Plaza, 999 Ploenchit Road, Lumpini Pathumwan, Bangkok 10330 Tel: 0 2656 1721 Fax: 0 2656 1733

Financial Advisor SCB Securities Company Limited 130-132 Sinthorn Tower 3, 26th Floor, Wireless Road, Pathumwan, Bangkok 10330 Tel. : 0 2263 3500 Fax : 0 2263 3801 2