annual registration statement report form 56-1 for the

Form 56 – 1

Annual Registration Statement

Report form 56-1

For the Year 2014

Ratchaburi Electricity Generating

Holding Company Limited

(Translation)

Content

Page

Part 1 Company's Business 1

1. Policies and Operating Performance 2

2. Nature of Business 8

3. Risk Factors 33

4. Asset 37

5. Legal Dispute 43

6. General Information of the Company, Subsidiaries,

Affiliates and Joint Ventures 44

Part 2 Management and Corporate Government 57

7. Securities and shareholders 57

8. Management Structure 60

9. Good Corporate Governance Report 81

10. Social Responsibility 108

11. Internal Control and Risk Management 127

12. Connected Transaction 132

Part 3 Financial Status and Operational Results 148

13. Financial Performance 148

14. Management Discussion and Analysis 160

Information Certification 170

Attachment 1 Information of Company's directors, management 171

Attachment 2 Information of subsidiaries' Executives 205

Attachment 3 Information of Chief internal auditor and Chief of compliance unit 224

Attachment 4 Information of Appraised value of assets 226

Attachment 5 Others 227

Part 1: Company's Business

Page 1

Part 1

Company's Business

Vision

To be a leading value-oriented integrated energy company in Asia-Pacific

Mission

To ensure shareholders' value creation by continuously generating superior financial returns

To achieve world-class operational excellence and project development

To be socially and environmentally responsible, conducting businesses in a fair manner

To provide an enjoyable, secure, and motivating work environment

To support long-term national energy security and comply to all local regulations

Policies

To continuously improve existing projects’ potential

To focus on developing new power projects in the regions that the Company operates in

To seek partners in expanding investment in new markets

To increase value by expanding investment in related businesses

To enhance corporate strengths

Core Value

Reliability

Accountability

Trust

Challenge

Happiness


Page 2

1. Policies and Operating Performance

Ratchaburi Electricity Generating Holding Public Company Limited was remarkably

successful in 2014 due to our ability to efficiently manage investment projects and business

restructure. Such activities resulted in high production capacity and ability to remit profit back to the

Company. Total revenue generated by the Company and its subsidiaries was Bath 58,700.32 million

increasing by 13.61 per cent. Meanwhile, the profit was Bath 6,279.03 million which clearly reflects

solid capacity of our business. The Company will continue to build sustainable growth based on

responsibility towards economy, society and the environment. The 10-year strategic plan (2013-2023)

was introduced to provide a framework for business direction and operations both for the 3-year plan

(2013-2015), the 5-year plan (2013-2017) and the 10-year period. The ultimate goal is to be the

leading valueoriented integrated energy company in Asia-Pacific.

Under the strategic plan, the Company has adjusted its growth direction, from focusing only

on electricity generating business in Thailand and its neighboring countries, to expanding to

comprehensively cover other energy business in Thailand and overseas, especially in the Asia

Pacific. The direction shift is based on our consideration that domestic power generation business

depends largely on the government’s Power Development Plan and domestic economic growth.

Competition becomes more intense because of new entrants considering low risks thanks to the long-

term power purchase agreement that can guarantees sustainable income. Considering these factors,

the Company believes that investment opportunity in the country becomes diminishing. However, the

Company, as the country’s large independent power producer, continues to give high importance to

domestic market which remains its key mission to support national energy system security.

The Company has focused its investment in domestic market through joint venture

negotiations, especially in projects that are already operating and those which have already obtained

the right for development, IPP, SPP and VSPP as well as renewable energy projects. It has also

looked for the opportunity to invest in related businesses. In the past year, the Company successfully

completed the purchase and acquisition of Tri Energy Power Plant with 700 MW installed capacity in

Ratchaburi and the joint venture in 100-MW cogeneration small power plant in Ratchaburi. It is also

negotiating on joint investment in a power plant that generates electricity from garbage and waste and

hopes to conclude the deal in 2015.

Overseas market, meanwhile, is another main target strategy to increase corporate value.

According to its corporate strategies, the Company specified four areas of interests namely 1)

Countries where the Company has already operated business such as Lao PDR and Australia; 2)

Neighboring countries, such as Myanmar and Cambodia; 3) ASEAN countries, including Vietnam,

Indonesia, Malaysia and the Philippines: and 4) Asia-Pacific countries, including China and Japan.

In 2014, the Company conducted feasibility studies across different type of projects, including main

power plants, renewable energy power plants, coal mining, fuel supply business, high voltage

transmission line development. Last year, the Company jointly invested in two solar power generation

projects with a total capacity of 33 MW. The success in business expansion in Japan is considered


Page 3

a significant milestone for the Company. In 2015, the Company expected to conclude more deals in

two power plants with high investment potential.

With a target to achieve Baht 121,000 million enterprise value in 2014, the Company focused

on managing existing asset quality in order to maintain high production efficiency and profitability. The

result was very significant as such activities have increased enterprise value to Baht 120,000 million,

which also has a significant positive trend to the Company’s profit this year.

Significant activities included the acquisition of Tri Energy Power Plant, in which the Company

held 50 per cent stake, through entire business transfer. The move has enabled the Company to

lower cost and expenses related to parts, operations, maintenance and tax management. At the end

of 2014, therefore, the Company’s power plants that have already commenced operations have a

combined production capacity of 5,560 MW. The Company has increased production capacity and

profitability of each power plant category in order to achieve its preset goals and plan. The Company

also considered writing off assets that do not create values, implemented financial restructure in

subsidiaries to lower financial costs, and closely monitored and ensured that new power plant

construction progress as planned. In November 2014, the 105-MW Ratchaburi World Cogeneration

Unit 1 commenced commercial operations.

Significant changes and development

Operating its business under the strategic plan emphasizing on value-focused strategy

development, the Company is moving forward to ensuring sustainable growth that enhances

shareholders’ confidence. It sets a goal to provide total shareholder return (TSR) by increasing

enterprise value (EV) to Baht 282,000 million or equivalent to 9,700 MW installed capacity

in 2023.

In 2014, the Company reviewed and set short-term, medium-term and long-term plans as well

as investment criteria according to the Company’s regulations. Continuous monitoring and reporting

of each project status is required in order to reduce risks and shorten project development time. All

activities have to be based on return on investment for both the Company and its shareholders. The

Company is highly interested in acquisition and joint investment with partners in Asia-Pacific

Economic Cooperation (APEC) countries and ASEAN Economics Community (AEC) as well as other

high potential countries that are the Company’s main targets and support the Company’s current

vision, mission, policy and strategies.

Other significant changes are as follows:

16 January 2014: The Company sold 100 million shares, representing 40 per cent of the

total shares in Ratchaburi World Cogeneration Company Limited to Ratchaburi Electricity Generating

Company Limited at Baht 10 each, totalling Baht 500 million.


Page 4

28 July 2014: Ratchaburi Gas Company Limited acquired the entire shareholding of the

previous shareholder equivalent to 17.12 million shares, representing 50 per cent of shares in Tri

Energy Company Limited, totalling USD 21.32 miillion. It later transferred the entire business to the

Company through entire business transfer method then registered its dissolution and complete

liquidation. At the sametime, Ratchaburi Electricity Generating Company Limited increased its

registered capital by Baht 3,625 million by issuing 362.50 million new shares at 10 each to purchase

and accept business transfer from Tri Energy Company Limited. As a result, Ratchaburi Electricity

Generating Company Limited’s registered capital is now Baht 21,900 million. On 4 August 2014, Tri

Energy Company Limited registered its dissolution and the liquidation process is underway.

7 February 2014: Ratch Udom Power Company Limited registed its complete liquidation.

Such action did not affect the Company’s business operations at all.

The Company wrote off Baht 315 million cost for Nam Ngum 3 Hydroelecric Power Plant

as the 2013 expenses because it did not receive Project Development Agreement renewal from the

Ministry of Planning and Investment, Lao PDR, due to changes in domestic energy development

policy within Lao PDR.

17 April 2014: Ban Bueng Power Company Limited, Eastern IPP Company Limited and

Eastern Power Generation Company Limited registered their dissolutions and completed the

liquidation process on 28 October 2014. The action did not affect the Company’s Group’s business

operations.

28 April 2014: RH International (Singapore) Corporation Pte. Limited issued and offered 5-

year debentures to international investors worth USD 300 million at 3.50 per cent interest. The

debentures will be matured in 2019 and the Company is the guarantor.

14 May 2014: The Company sold itsentire shareholding of 6.47 million shares,

representing 49 per cent of total shares in Solarta Company Limited to Ratchaburi Energy Company

Limited. at book value totaling Baht 695.69 million

28 May 2014: Nava Nakorn Electricity Generating Company Limited, the operator of

Navanakorn SPP Power Plant, signed the Baht 4,770 million financial facility with three Thai financial

institutions for 20.5 years.

21 July 2014: Ratchaburi Energy Company Limited sold out 200,000 shares, representing

25 per cent of the total shares of Sukhothai Energy Company Limited, at Baht 54.71 per share,

totaling Baht 10.94 million to Sun rise Energy Company Limited, the existing shareholder in the

company.

29 August 2014: The Company sold out all stakes to Ratchaburi Energy Company Limited,

totaling 7.55 million shares in Solar Power (Korat 3) Company Limited, 7.97 million shares in Solar

Power (Korat 4) Company Limited and 7.55 million shares in Solar Power (Korat 7). This represents

40 per cent of the total stake it held in each of these companies. Total value of the sales is Baht

285.39 million.


Page 5

29 September 2014: Ratchaburi Energy Company Limited sold all of its 24.28 million

shares, representing 55.18 percent of the total shares in Sustainable Energy Corporation which is the

developer of wind turbine power plant in Petchaboon province. The sales valued Baht 118.43 million

was made to Mr. Chatchaval Jairavanon, the new shareholder. This is to save some investment

capital and reinvest it in other projects that will create higher returns, prevent risk ad reduce impact on

that may occur as the project has been delayed for 3 years due to some unexpected environmental

factors that negatively had impact on the Company’s cost and subsidiaries’ costs.

20 October 2014: Ratchaburi Energy Company Limited established Oversea Green

Energy Company Limited with Baht 1 million registered capital, comprising 100,000 ordinary shares

(fully paid) at Baht 10 each. This followed the Shareholders Agreement signed on 12 September 2014

between Ratchaburi Energy Company Limited and Premier Solution Company Limited under the

60:40 shareholding structure to invest in solar power plant project management service in Japan.

30 October 2014: Ratchaburi Electricity Generating Company Limited acquired 3.50 million

shares, or 35 per cent of the total shares in Ratchaburi Cogeneration Company Limited, from Rajburi

Sugar Company Limited, amounting Baht 8.75 million. The transaction was part of the shareholders’

agreement signed on 15 September 2014 to invest in Ratchaburi Cogeneration Company Limited’s

SPP Project with the capacity to produce 100 MW electricity and 15 tons per hour of steam. Later on

27 January 2015, Ratchaburi Cogeneration Company Limited registered its change of name to Berk

Prai Cogeneration Company Limited.

24 November 2014: RH International (Singapore) Corporation Pte. Limited established

RICI International Investment Pte. Limited in Singapore with SGD 100 registered capital, comprising

100 shares (fully paid) at SGD 1 each according to the shareholders’ agreement signed between RH

International (Singapore) Corporation Pte. Limited and Chow International Company Limited, each

holding 60 per cent and 40 per cent stake respectively. This is to invest in solar power plants in Japan

with combined installed capacity of 33 MW.

19 December 2014: The Company sold shares in Songkhla Biomass Company Limited

and Songkhla Biofuel Company Limited to Ratchaburi Energy Company Limited, a wholly owned

subsidiary. Total shares sold included 840,000 shares amounting Baht 80,000,000 in Songkhla

Biomass and 4,000 shares amounting Baht 400,000 in Songkhla Biofuel (totaling Baht 80,400,000 or

at the paid up registered capital value), which accounted for 40 per cent of all the registered shares in

each company.


Page 6

Investment Structure

Relationship with Major Shareholders

Ratchaburi Electricity Generating Holding Public Company Limited is a public listed company

traded on the Stock Exchange of Thailand. It operates electricity generating and related businesses

and with the Electricity Generating Authority of Thailand (EGAT) as a major shareholder, holding 45

per cent stake, and other shareholders holding the other 55 per cent stake.

EGAT is a state enterprise under the Ministry of Energy and Ministry of Finance. Its mission

includes the production, sourcing and distribution of electricity in Thailand and neighboring countries

and joint investment to conduct such businesses under EGAT Act. EGAT has five subsidiaries and

affiliates as follows:


Page 7

Source: Electricity Generating Authority of Thailand

In addition to the Company, the subsidiaries and affiliates that EGAT is a shareholder and

operate electricity generation and distribution business are Electricity Generating Public Company

Limited, a listed company on The Stock Exchange of Thailand, and EGAT International Company

Limited. This sometime creates competition among EGAT subsidiaries and affiliates, especially in

some project development, such as the IPP bidding in early 2013. To reduce such problem EGAT has

adjusted its future direction by synergizing affiliates and subsidiaries in large scale overseas project

investment in order to increase the Group’s competitiveness against other players in the industry.

EGAT has appointed its representatives to be directors in its subsidiaries and affiliates

according to its shareholding portion in each company while subsidiaries and affiliates can formulate

their own policy, manage and make decision related to investment as deemed appropriate.

In Ratchaburi Electricity Generating Holding Public Company Limited, EGAT appointed seven

representatives to sit in its 15-member Board of Directors. In addition of being a major shareholder,

holding 45 per cent stake in the Company, EGAT is the major electricity purchaser, representing

14 per cent of Thailand’s total electricity generating capacity, under the same terms and conditions

and as EGAT purchases electricity from other companies, using the same source of energy and

distribute power to EGAT’s distribution system at the same period of time. Agreements and contracts

made between the Company and EGAT are power purchase agreement; Ratchaburi Electricity

Generating Company Limited’s power plant operation and maintenance service, which is made

between Ratchaburi Electricity Generating Company Limited, a subsidiary that the Company holds

99.99 per cent stake, and EGAT; and the power plant operations and maintenance for the Hongsa

Thermal Power Plant owned by RATCH-Lao Services Company Limited which is 99.99-percent-own

subsidiary of the Company. These businesses are conducted under general trade conditions.


Page 8

The Company and EGAT also have shared intention to work together with responsibility

towards society and environment through promoting, preserving and optimizing the limited natural

resources available in order to drive the organization growth and responsibility towards the society

and environment.

2. Nature of Business

Ratchaburi Electricity Generating Holding Public Company Limited is Thailand’s largest

private electricity producer. Operating as a holding company, the Company invests in subsidiaries,

jointly-controlled entities and affiliates that operate in electricity generating and related businesses in

Thailand and overseas. Its major source of income is dividend based on the Company’s investment

portion. The Company has strong commitment to operate its business in support of the national’s

electricity security and to drive economic development. The Company continuously creates and

develops itself in order to transform itself into “the leading value-oriented integrated energy company

in the Asia-Pacific”. At the same time, the Company has strong commitment to take good care of the

society and environment as part of its way to become a green organization that can best address

expectations of all stakeholders, leading to wide corporate recognition and sustainability in all

aspects.

As of 31 December 2014, the Company’s attribution production capacity totaled 6,578.12

MW. This comprised 5,874.07 MW of electricity for domestic use or 16 per cent of the country’s total

production capacity and with EGAT as the major buyer, and 704.05 MW of electricity for export that is

sold to countries where the power plants are located, such as Lao PDR and Australia.

The Company’s investment structure includes four businesses as follows:

1. IPPs and SPPs in Thailand

To support security and stability of the country’s electricity system which is a crucial

infrastructure that drives national economic and social development, the Company gives high

importance to the use of diverse energy sources for electricity generating. Natural gas, coal and

hydropower are used in order to maintain natural balance while strengthening national energy

sustainability.

The country’s power plants using main fuel sources have a combined production capacity

of 4,882.65 MW. Out of this, 4,748.05 MW is produced by commercially operated plants while another

134.60 MW will be contributed by power plants that are under construction and development.

Considering type of producers, IPPs and SPPs in Thailand are.

1.1. Independent power producer projects (IPPs): Ratchaburi Power Plant, Tri Energy

Power Plant and Ratchaburi Power’s Power Plant

1.2. Small power producer projects (SPPs): Ratchaburi World Power Plant and

Navanakorn Power Plant


Page 9

1.3. Very small power producer project (VSPPs): PTO-A Power Plant and Sao Thian-A

Power Plant

2. Renewable Projects in Thailand

The Company has a policy and intention to reduce natural source of fuel and impact from

the Global Warming phenomenon. Environmental responsibility, similar to business expansion, is one

of the Company’s most important tasks. It fully supports the government’s policy to promote

renewable energy through the use of alternative and renewable energy, such as solar, wind and

biomass, for Power generation.

At present, Renewable Projects in Thailand have combined capacity of 69.34 MW,

including commercially operating projects of 65.38 MW and projects under construction and

development of 3.96 MW. This is categorized by type of energy sources as follows:

2.1. Solar power projects: Solarta Power Plant, Solar Power Korat 3 Power Plant, Solar

Power Korat 4 Power Plant and Solar Power Korat 7 Power Plant

2.2. Wind power projects: Huay Bong 2 and Huay Bong 3 Wind-Turbine Power Projects

2.3. Biomass power project: Songkhla Biomass Power Plant

3. International Projects

With its goal to become a leading power producer in the Asia-Pacific, the Company has

been developing and upgrading international projects. At the same time, the Company seeks new

partners and joint ventures to expand its business in the emerging markets across the Asia-Pacific in

order to achieve long-term and sustainable expansion.

Total capacity of international projects under joint ventures and developed by the

Company is 1,537.08 MW. This includes 663.27 MW contributed by commercially operating projects

and 873.71 MW to be produced by the projects currently under construction and development. These

projects can be categorized by project locations as follows:

3.1. Lao PDR: Nam Ngum 2 Hydroelectric Power Project, Hongsa Thermal Power Plant

and Xe-Pian Xe-Namnoy Hydroelectric Power

3.2. Australia: RATCH-Australia Power Plants

3.3. Japan: RICI Solar Power Plant

4. Related Business

The Company has always been searching for opportunity to create added value from its

investment projects and increase the Group’s competitiveness, which will add value and increase

returns for investors while enabling it to become the leading energy company. It has invested in

various related businesses, including power plant operations and maintenance, coal mine, gas turbine

maintenance service for power plants and other investment. Investment has been made through its


Page 10

subsidiaries, jointly-controlled entities and joint ventures as follows:

4.1. Power plant operations and maintenance service business: RATCH O&M Company

Limited, RATCH-Lao Services Company Limited and Chubu Ratchaburi Electric

Services Company Limited

4.2. Gas turbine maintenance service: EGAT Diamond Service Company Limited

4.3. Coal mine business: Phu Fai Mining Company Limited

4.4. Fuel sourcing business: Songkhla Biofuel Company Limited

4.5. Other investment: holding stakes in EDL-Generation Public Company (“EDL-Gen”)

which is a listed company on Laos Securities Exchange through RATCH-Lao Services

Company Limited and RH International (Singapore) Pte. Corporation. The Company’s

attribution installed capacity of 89.05 MW.

Electricity Generating Business

Commercially operating power plants

Ratchaburi Power Plant has successfully managed power plant operations and

maintenance business with 96.90 per cent availability, 10.3 time of CAH Index, 1.00 time of Fuel

Ratio, and has continually maintained occupational health, safety and environment operation standard

in accordance with the OHSAS 18001:2007 and ISO 14001:2004 standards.

Tri Energy Power Plant has 89.18 per cent availability for the power plant operations and

maintenance activity, 7,812 hours of CAH, 1.77 per cent of fuel margin and can operate the

occupational health, safety and has continually maintained occupational health, safety and

environment operation standard in accordance with the ISO 14001:2004 standard.

Ratchaburi Power’s Power Plant has 94.22 per cent availability, 1.04 time of CAH and 1.02

time of fuel ratio. Electricity generation efficiency and safety has been improved by 0.50 per cent on

average because the improvement of gas turbine system has increased the temperature of gas

generated during combustion.

RATCH-Australia Power Plants have the availability of thermal and wind power plants

have of 95 per cent and 96-99 per cent respectively. The Company also closely monitors the

operations of the project to ensure its constant capability to create profit.

PTO-A and Sao Thian A Power Plants have passed the 2014 annual surveillance audit for

ISO 9001:2008 standard on 19 February 2014. The two projects have been certified for the standards

since 2011.

Solarta Solar Power Plant has increased power generation capacity to 240,000 KW/h on

average per month after efficiency improvement of the Sai Thong Power Plant Project and Sai Yai

Power Plant Project.


Page 11

Ratchaburi World Cogeneration’s SPP Project has begun commercial operations on 1

November 2014 while another unit is under construction. The entire project progresses well as

planned. It is expected that the other unit will begin commercial operation in early 2015.

Projects under construction and development

Ratchaburi World SPP Power Plant: In addition to the commercially operating power

plants, one more unit is under construction and development, which is already 99 per cent completed.

The unit is the testing phase for plant operations and transmission of electricity into EGAT’s system. It

is expected that the unit will be able to commence its operations as planned in early 2015.

RATCH-Australia Power Plant: In addition to the commercially operating power plants,

other projects under the Company’s plan are the Collector Wind Power Plant Project which is in the

process of power purchase agreement preparation, the Mt. Emerald Wind Power Plant Project is

seeking Development Approval, and the Collinsville solar power plant has already obtained

Development Approval. The project is studying information on other projects to build more opportunity

for investment expansion.

Hongsa Thermal Power Plant is under construction with 93 per cent completion with some

works in progress, including power plant construction, high voltage transmission system and station

construction works, open pit for coal mine, mining equipment supplies and construction of workers’

accommodation and office building. The project is expected tocommercially operate in 2015.

Xe-Pian Xe-Namnoy Hydroelectric Power Plant has already completed the preparation

work under Pre-construction contract. Tunnel and water channel system, dam, water tunnel and main

buildings are being built with 9 per cent progress as planned.

RICI Solar Power Plant the Company has jointly investedn with Chow Steel in two solar

power plant projects in Japan with 33.51 MW installed capacity. The project is seeking construction

contractor and negotiating with financial institutions on funding and loan contracts.

Navanakorn SPP Power Plant was granted a license to operate power plant (Ror Ngor 4)

from the Department of Industrial Works on 16 July 2014. The construction is currently more than 25

per cent complete. The building foundation and major machinery, including boiler, gas turbine and

steam turbine, have already been installed and completed. The major machinery and equipment

installation will be complete within 2015 and the project will commence its commercial operation as

planned in 2016.

Berk Prai Cogeneration SPP Power Plant is the power plant in which the Company has

invested since October 2014. The project is preparing the Environmental Impact Assessment (EIA)

report and the Engineering Procurement Construction (EPC) contract criteria.

Songkhla Biomass Power Plant is under construction with 80 per cent completion. The

project is expected to startcommercial operation within 2015.


Page 12

Related Business

Power plant operations and maintenance service

RATCH-Lao Services Company Limited has made a contract with EGAT to recruit people

to operate and maintain power plant. The company will recruit and select people with the right

qualifications and in the number specified in the contract to operate and maintain Hongsa Thermal

Power Plant in Lao PDR from March 2014 to June 2017, or 40 months.

Management

1. Management of the business in which the Company invests or joint venture

The Company has assigned its directors and executives to sit in the Board of Directors

and Management of the companies it has invested in and its joint ventures from the development and

construction period through to commercial operation period. This is to ensure that the operations of

those businesses are in line with the Company’s policy and achieve the Company’s goals.

2. Financial management

The Company’s financial policy focuses on capital sufficiency that can support and fuel the

Company’s Group’s growth. Money markets in Thailand and overseas are closely monitored.

Significant activities in 2014 are as follows:

• Securing loans through Euro Medium Term Note: EMTN Program

The Company has established Euro Medium Term Note: EMTN Program with a total

amount of USD 1,000 million. The first issuance and offering of USD 300 million EMTN was on 28

April 2014 with RH International (Singapore). Corporation Pte. Limited as the issuer. The Company,

as the parent company, acts as the guarantor. This marked the first issuance of EMTN in overseas

money market by Thai private power producer. The EMTN was 3.77 times oversubscribed.

Interest rate is 3.50 per cent per annum (Treasury yield 5 yrs + spread 175 bps) which

is a considerably low interest rate compared to other debenture issued by other issuers in Thailand

with higher or the same credit rating at Baa2 (Moody’s) and BBB (S&P).

• Cash balance management

In 2014, The Company managed cash by considering mutual benefits for the

Company’s Group in terms of deposit, loan and liquidity in extending inter-company loans under the

financial management framework approved by the Board of Directors. Average short-term return on

investment in 2014 was 2.76 per cent per year, which is 1.33 per cent per year higher than the

reference ROI. Meanwhile, long-term return on investment is 4.10 per year, which is 1.52 per cent per

year higher than the reference ROI.

• Provision of short-term facilities and trade finance facilities for subsidiaries

The Company has provided short-term facilities at low cost from local and international

sources for the Company and subsidiaries to promote liquidity. The Company also provides trade


Page 13

finance facilities that are sufficient for business operations. In addition, the Company supported loans

for subsidiaries in which it holds 99.99 per cent stake to increase their capability to expand business

according to the Company Group’s investment structure.

• Investment structure of the Company’s Group

In increasing efficiency in management, capital sourcing and tax management, the

Company has grouped its business to match with investment policy. Its businesses are categorized

into IPPs and SPPs in Thailand, Renewable Projects in Thailand, International Projects and Related

Business. It also closely monitors international tax laws in target investment countries which are used

for consideration and optimize its foreign investment.

Income Structure of the Company, Subsidiaries andJointly-controlled Entities

The Company’s main source of income is the sales of electricity generated by Ratchaburi

Electricity Generating Company Limited, a subsidiary, to EGAT under the 25-year power purchase

agreement (PPA). Ratchaburi Power Plant’s income structure under PPA includes two main parts as

follows:

1. Availability Payment (AP)

Availability Payment (AP) covers the entire investment cost, including loans, loan interests,

shareholders’ return, fixed operational costs, such as maintenance expenses andmanagement

expenses. Generally, AP depends on the power plant’s readiness to produce and distribute electricity

according to EGAT’s requirement.

2. Energy Payment (EP)

Energy Payment (EP) is received after electricity is generated and transmitted to the

EGAT’s transmission system. EP comprises two major parts:

1) Fuel Payment

2) Variable Operating and Maintenance Payment

In addition to the main income from electricity sold by Ratchaburi Power Plant, the Company

has consolidated electricity sales from RATCH-Australia Corporation Limited (RAC) a company

located in Australia, whose main income is from the long-term PPA for its thermal power plants and

wind power plants. The basic income structure according to the long-term PPA for the thermal power

plants includes:

1. Capacity Charge which is the total investment including maintenance costs and Actual

Capacity Availability in electricity production and distribution as stated in the PPA

2. Energy Charge which is received when electricity is produced. This includes fuel payment

and variable operating and maintenance payment Sales income from the RAC’s wind farms are

calculated by electricity generated times electricity charge per unit.


Page 14

The Company also has other sales and service income as follows:

1. Electricity charge from the 2.65-MW PTO-A Power Plant and the 3.6-MW Sao Thian-A

Power Plant, operated by Ratchaburi Energy Company Limited, the Company’s subsidiary. The PTO-

A Power Plant and Sao Thian-A Power Plant are located in Kong Krilat District in Sukhothai province.

Both produce electricity from associated gas from oil rig.

2. Income from power plant operation and maintenance services offered by RATCH-Lao

Services Company Limited, the Company’s subsidiary, established on 8 May 2009 under Lao PDR’s

laws. RATCH-Lao Services Company Limited’ income is from providing services to Nam Ngum 2

Company Limited as follows:

1) An agreement to provide operations and maintenance service to the Nam Ngum 2

Hydroelectric Power Plant from 1 July 2009 to 31 December 2038 (end of the power plant concession

period).

2) An agreement to provide maintenance services to the Nam Ngum 2 Hydroelectric Power Plant for 7 years from 3 September 2012.

The Company also recognizes profit shares from the joint investments with other investors in

jointly-controlled entities and affiliates that operate in electricity generating businesses as follows:

1. Ratchaburi Power Company Limited whose 25 per cent stake is held by Ratchaburi

Alliances Company Limited, the Company’s subsidiary, has from electricity sales which can be

divided into 2 parts, which are Availability Payment and Energy Payment, similar to the basic incomes

of Ratchaburi Electricity Generating Company Limited.

2. Chubu Ratchaburi Electric Services Company Limited in which the Company holds 50 per

cent stake, received income from providing operating and maintenance services under the 14-year

contract with the Ratchaburi Power’s Power Plants, including two blocks of thermal power plant, each

with 700 megawatts installed capacity.

3. SouthEast Asia Energy Company Limited in which the Company holds 33.33 per cent

shares, received income from sales of electricity generated by the Nam Ngum 2 Hydroelectric Power

Plant in Lao PDR. Southeast Asia Energy has a 25-year PPA with EGAT starting from the commercial

operation date. The Initial Operation Date is 26 March 2011.

4. Solarta Company Limited in which the Company holds 49 per cent stake, operates eight

solar power plants with combined installed capacity of 34.25 megawatts. It has non-firm PPA for very

small power producer (VSPP) with the Provincial Electricity Authority (PEA) and received adder of

Baht 8 per unit from the Electricity Development Fund, Office of Energy Regulatory Commission

(OERC) for 10 years. In 2012, the eight power plants began commercial operation and supplied

electricity to PEA.

5. First Korat Wind Company Limited (Huay Bong 3 Wind-Turbine Power Plant) and K. R.

Two Company Limited (Huay Bong 2 Wind-Turbine Power Plant), both of which the Company holds

20 per cent stake, operate wind farms with the installed capacity of 103.50 megawatts each. They


Page 15

have non-firm power PPAs for small power producer (SPP) with EGAT and received adder of Baht

3.5 per unit for 10 years from the Electricity Development Fund. They began commercial operation

and supplied electricity to EGAT on 14 November 2012 and 8 February 2013 respectively. Its

electricity sales income includes Energy Payment, Adder and wholesale Ft, similar to that of Solarta

Company Limited.

6. Solar Power (Korat 3) Company Limited, Solar Power (Korat 4) Company Limited and

Solar Power (Korat 7) Company Limited, in which the Company holds 40 per cent stake, produce

solar power with 18 megawatts installed capacity. The three power plants began commercial

operation and supplied electricity to PEA on 9 March 2012, 14 May 2012 and 30 May 2012

respectively. It also has non-firm power purchase for VSPP with PEA and received 8 baht Adder per

unit from the Electricity Development Fund for 10 years. Its electricity sales income covers Energy

Payment, Adder and wholesale Ft, similar to that of Solarta Company Limited.

7. Ratchaburi World Cogeneration Company Limited, in which Ratchaburi Electricity

Generating Company Limited, the Company’s subsidiary, holds 40 per cent stake, has combined

installed capacity of 210 megawatts and has a 25-year firm cogeneration PPA with EGAT. Unit 1 of

Ratchaburi World Power Plant commenced commercial operations and transmitted electricity to

EGAT on 1 November 2014.

The Federation of Accounting Professions required listed companies on the Stock Exchange

of Thailand to prepare financial statements based on Financial Reporting Standards. Ratchaburi

Electricity Generating Holding Public Company Limited and its subsidiaries, including Ratchaburi

Electricity Generating Company Limited, and jointly-controlled entities, including Ratchaburi Power

Company Limited, have strictly followed Thai Financial Reporting Interpretations Committee No.4

(TFRIC 4) Determining whether the Arrangement Contains a Lease and implemented the Accounting

Standard No. 17 on Rental Agreement since 1 January 2014. This has resulted in changes to the

sales income format as stated in the financial report. Sales income related to loans and shareholders’

return are recorded as income from financial lease agreement. Such income is recognized according

to the effective interest method.

Electricity sales income received as compensation for power plant maintenance expense

and other expenses, including capacity payment and other income, continue to be recorded using the

existing method.


Page 16


Page 17


Page 18

2.1. Product

Product of the Company’s subsidiaries and jointly controlled entities is electricity that is

sold to the Electricity Generating Authority of Thailand (EGAT) according to the long-term power

purchase agreement.

2.1.1. Power Plants and Production Process

1) Thermal Power Plant

EGAT made a Lumpsum Turnkey Contract with Mitsubishi Heavy Industry,

covering design and construction of the thermal power plant. Most of the machinery and equipment

belong to Mitsubishi Heavy Industry. Stone & Webster (Thailand) Limited acts as the engineering

consultant for the project.

Ratchaburi Thermal Power Plant Unit 1 and 2 are designed to use both

natural gas and heavy oil as the fuel for electricity generating. Fuel is injected into the furnace. Heat

from the burning is then transferred to water in the boiler, creating high-temperature flow of steam.

The steam will flow through the pipe and push turbine shaft that is connected to the generator shaft.

When the generator shaft moves, the magnetic field at the generator will make the wire spin and

therefore creates electricity induction.

The thermal power plant has installed the Flue Gas Desulfurization (FGD)

system. Whenever using heavy oil as a fuel, FGD thus removes sulfur dioxide from flue gas

generated from burning heavy oil which has sulfur. The desulfurization system used by the Ratchaburi

Power Plant is the wet flue gas type and has high efficiency. The system can remove as much as

97.5 per cent of sulfur dioxide out of the flue gas, using lime as the absorbent and producing gypsum

by product.

2) Combined Cycle Power Plant

EGAT commissioned Raytheon Engineers Oversea Limited to design the

Combined Cycle Power Plant and the construction was handled by EGAT. Stone & Webster

(Thailand) Limited served as the engineering consultant for the project. Most of the machinery and

equipment are from Mitsui & Company and General Electric International Company Incorporated.

The Combined Cycle Power Plant comprises 2 electricity generating units

working together -- two gas turbine generators (9FA+e) and one steam turbine generator. The power

plant is fueled by natural gas as the main source of fuel and diesel oil as the second source of energy.

The gas turbine works like the engine of a jet airplane. Air is intaked in and

compressed at the compressor before being injected to the combustion chamber. The fuel is injected

and ignited, generating high-pressure high-temperature gas. The high temperature gas will next drive

the gas turbine and generator shaft. High temperature gas from the gas turbine power generating unit

is used to boil water to create steam for the steam turbine electricity generating unit that is connected

to the gas turbine unit. Steam generated in this process will be used to drive generator shaft.


Page 19

3) Hydroelectricity Power Plant

Nam Ngum 2 Hydroelectricity Power Plant is the Company’s first investment

project in Lao PDR. It is located 90 kilometres away from Vientiane and approximately 35 kilometres

north of Nam Ngum 1 Dam.

Nam Ngum 2 Hydroelectricity Power is a power plant with water reservoir or

a dam. The concrete rockfill dam is approximately 181 metres high and situated 375 metres above

sea level. It uses 3 units of Francis Turbine, 205-MW capacity each, to generate power.

Water flows from the dam through pipe at high speed and in large volume.

The pressure thus flows through the provided channel to drive the water turbines, creating mechanical

energy that drives the generator. Mechanical energy will then be transformed into electricity that is

transmitted to the electricity distribution system.

4) Electricity Generating Plant using Flared Gas

4.1) The PTO-A Project is a power plant using flared gas from Pratu-Tao A

oil rig located in Kong Subdistrict, Kong Krailat District, Sukhothai province, which is jointly developed

by Ratchaburi Energy Company Limited and PTTEP Siam Company Limited. The 1.75MW project is

supported by the Department of Mineral Fuel, Ministry of Energy, and has a non-firm SPP power

purchase agreement with EGAT.

4.2) PTO-A Expansion Power Plant Project is the extension of PTO-A project

in the nearby area. With 0.9 MW capacity, the project has a power purchase agreement with the

Provincial Electricity Authority according to the regulations on power purchase from very small power

producer.

4.3) Electricity Generating Project Using Associated Gas from Sao Thian-A

Oil Rig is similar to the PTO-A and PTO-A Expansion power plant projects. Located in Krai

Subdistrict, Kong Krailat District, Sukhothai province, the 3.6 MW project has a power purchase

agreement with the Provincial Electricity Authority according to the regulations on power purchase

from very small power producer.

The three projects use gas engine to produce electricity using flared gas as

fuel. In the past, flared gas from oil rig had to be burnt during the crude oil production process.

Such gas engine is a 4-stroke turbo engine with complete internal

combustion system. The engine uses crankshaft motion to create mechanical power to drive

electricity generator shaft that will change mechanical power into electricity. The power generated in

this process will be upgraded from 400 volt to 22 KV and transmited to EGAT’s network.


Page 20

5) Wind Farm

5.1) Huay Bong 2 Wind Farm in Huay Bong Subdistrict, Dan Khun Thot

District, Nakhon Ratchasima, is located approximately 300 metres above sea level. The 90 MW

project has a non-firm power purchase agreement with the EGAT under the small power producer

scheme.

5.2) Huay Bong 3 Wind Farm is situated in Huay Bong Subdistrict, Dan Khun

Thot District, Nakhon Ratchasima, which is approximately 300 metres above sea level The 90 MW

project has a non-firm power purchase agreement with the EGAT under the small power producer

scheme.

The three wind farm projects play a significant role in promoting the country’s

alternative energy development under the Ministry of Energy’s policy to increase national energy

security. Generating electricity from wind power is crucial to environment conservation because wind

power is a clean national resource that does not harm the environment and is a renewable energy.

In generating electricity from wind power, the kinetic energy from the wind

moves the wind turbine and thus creates mechanical energy. Such energy will then be transformed

into electricity power by the generator that is attached to the wind turbine axis. Electricity will then be

transmitted through the electricity control system and the voltage will be increased from 22 KVs to 115

KVs for transmission to EGAT’s distribution network

6) Solar Farm

6.1) Solar Power Plant by Solarta Company Limited comprises eight projects

in Ahutthaya, Supanburi and Nakhon Pathom. They produce and distribute electricity to Provincial

Electricity Authority under the power purchase agreement made according to the policy to buy power

from renewable energy from very small power producers. The project has a combined installed

capacity of all the eight projects of 34.25 MW.

6.2) Solar Power Plant by Solar Power (Korat 3) Company Limited is located

in Sam Muaeng Subdistrict, Sida District, Nakhon Ratchasima. The company produces and

distributes electricity to the Provincial Electricity Authority under the power purchase agreement

according to the regulations on purchase of power generated from renewable energy from very small

power producer. The project has installed capacity of 6 MW.

6.3) Solar Farm Project by Solar Power (Korat 4) Company Limited is located

in Tha Ang Subdistrict, Chokchai District, Nakhon Ratchasima. The project produces and distributes

electricity to the Provincial Electricity Authority under the power purchase agreement according to the

regulations on purchase of power generated from renewable energy from very small power producer.

The project has installed capacity of 6 MW.

6.4) Solar Farm by Solar Power (Korat 7) Company Limited is located in Dan

Nai Subdistrict, Dan Khun Tot District, Nakhon Ratchasima. The project generates and sells electricity

to the Provincial Electricity Authority under the power purchase agreement according to the


Page 21

regulations on purchase of power generated from renewable energy from very small power producer.

The project’s total capacity is 6 MW.

The four solar farm projects use solar cells to generate electricity. The solar

cells, made from silicon, transform solar power to direct current electricity that will be passed through

an inverter and is convered to alternative current. The alternative current from the inverter has low

voltage of approximately 380 – 400 volt. Given this low voltage, it is not compatible to the Provincial

Electricity Authority’s electricity transmission system and not appropriate for long-distance

transmission. Therefore the voltage has to be stepped up to 22 KV using a transformer.

Considering that Thailand is near the Equator, the solar cells are fixed at an

angle of between 10 degrees to 15 degrees of the ground so that the solar cell panels are averagely

exposed to the sunlight at nearly right angle all year round.

7) Biomass Power Plants

The Company has invested in Songkhla Biomass Company Limited that

produces electricity from biomass, such as rubber wood waste. Situated in Khun Tat Wai Subdistrict,

Jana District, Songkhla, the company produces and transmits electricity to the Provincial Electricity

Authority under the power purchase agreement according to the regulations on purchase of power

generated from renewable energy from very small power producer. The project has a production

capacity of 9.9 MW.

Electricity generating process starts from feeding biomass kept in the storage

on the boiler through wall screw feeder into the combustor where the temperature is between 850-900

degree Celsius. Heat will dry up the biomass and burn it quickly with complete combustion process.

Heat from burning the biomass is transmitted to the wall of the combustor bringing water in the wall

tube to boil. Steam from this procedure will flow to the steam drum at the top of the boiler.

Steam from the steam drum flows through superheater and its pressure and

temperature will be raised to 158 bar and 540 degree Celsius respectively. The high-pressure, high-

temperature steam is then passed to the steam turbine that will convert heat to mechanical energy

through the generator shaft motion. The generator then converts the mechanical energy into

electricity by spinning the coil upon the shaft within the magnetic field, creating 13.8 KV electricity.

The transformer is connected to the Provincial Electricity Authority’s distribution system.


Page 22

2.1.2. Investment incentives

1) Incentives for investment in domestic power plants

Power plant Type Agreement period

(years) PPA / SPP/ VSPP

Location Commercial operating date

(COD) Investment

promotion period Adder

Ratchaburi Power Plant IPP 25 Muaeng District, Ratchaburi Unit 1-2: 31 October 2000 Block 1-2: 18 April 2012 Block 3: 1 November 2012

8 years from COD N/A

Tri Energy Power Plant IPP 20 Muaeng District, Ratchaburi 1 July 2000 8 years from COD N/A

Ratchaburi Power’s Power Plant IPP 25 Muaeng District, Ratchaburi Block 1-2: 1 March 2008 Block 3: 1 June 2008

8 years from COD N/A

PTO-A and Expansion projects VSPP 5 Kong Krailat District, Sukhothai 27 June 2007 8 years from COD N/A

Sao Thian - A VSPP 5 Kong Krailat District, Sukhothai 26 January 2012 8 years from COD N/A

Solar Farm Solarta Co., Ltd.

Sai Yai Project VSPP 5

(Automatic-Renewal) Bang Len District, Nakhon Pathom 10 August 2012 8 years from COD

Baht 8 for 10 years

Sai Thong Project VSPP 5

(Automatic-Renewal) Bang Len District, Nakhon Pathom 1 August 2012 8 years from COD

Baht 8 for 10 years

Sai Sapan 1 Project VSPP 5

(Automatic-Renewal) Song Phi Nong District, Nakhon Pathom

17 August 2012 8 years from COD Baht 8 for 10

years

Sai Sapan 2 Project VSPP 5

(Automatic-Renewal) Song Phi Nong District, Nakhon Pathom

28 November 2012 8 years from COD Baht 8 for 10

years

Sai Ta Tong Project VSPP 5

(Automatic-Renewal Song Phi Nong District, Nakhon Pathom

25 July 2012 8 years from COD Baht 8 for 10

years


Page 23



Location Commercial operating date

(COD) Investment


Sai Prapa Project VSPP 5


20 July 2012 8 years from COD

Baht 8 for 10 years

Sai Yoi Project VSPP 5


31 Auust 2012 8 years from COD

Baht 8 for 10 years

Sai Sena Project VSPP 5

(Automatic-Renewal Sai Sena District, Nakhon Pathom 17 April 2012 8 years from COD

Baht 8 for 10 years

Solar Power Plants Solar Power (Korat 3) Co., Ltd.

VSPP 5

(Automatic-Renewal) Sida District,Nakhon Ratchasima

9 March 2012 8 years from COD

Baht 8 for 10 years


VSPP 5

(Automatic-Renewal)

Chokchai District,Nakhon Ratchasima

14 May 2012 8 years from COD Baht 8 for 10

years


VSPP 5

(Automatic-Renewal)

Dan Khun Tot District,Nakhon Ratchasima

30 May 2012 8 years from COD Baht 8 for 10

years

Huay Bong 2 Wind Farm SPP 5

(Automatic-Renewal)

Dan Khun Tot District,Nakhon Ratchasima

8 February 2013 8 years from COD Baht 3.5 for

10 years

Huay Bong 3 Wind Farm SPP 5

(Automatic-Renewal)

Dan Khun Tot District, Nakhon Ratchasima

14 November 2012 8 years from COD Baht 3.5 for

10 years


Page 24

2) Invstment incentives for overseas power plant projects



Location Commercial operating

date (COD) Investment


Nam Ngum 2 Hydroelectricity Power Plant IPP 27 (IOD+COD)

Nam Ngum River, approximately 35 km north of Nam Ngum 1 Dam and 90 km north of Vientiane

26 March 2011 (IOD) 1 January 2013 (COD)

N/A N/A

RATCH-Australia Corporation Limited’s power plants

Townsville PS SPP 20 Yabulu, Townsville,

Queensland 2004-2025 N/A N/A

Kemerton PS SPP 25

Bunberry, West Australia

2004-2030 N/A N/A

Kwinana PS SPP 25

Kwinana, West Australai

1996-2021 N/A N/A

Windy Hill Wind Farm SPP 15

Ravenshoe, Queensland

2000-1015 N/A N/A

Toora Wind Farm SPP Sold to Power Pool Toora, Victoria 2002 N/A N/A

Starfish Hill Wind Farm SPP Sold to Power Pool

Cape Jervis, South Australia

2003 N/A N/A

Remark IOD = Initial Operation Date) COD = Commercial Operation Date


Page 25

2.2. Product Management

2.2.1. Major raw materials

Major raw material for electricity generating is fuel. Termal power plant uses

natural gas as the main source of fuel and heavy oil as the secondary source of fuel. Combined cycle

power plant uses natural gas as the main source of fuel and diesel as the secondary fuel source.

Water and other chemicals are also used in the water quality improvement process, which is crucial to

the production process. Details are as follows:

Type of fuel

1) Natural gas

Thermal power plants and combined cycle power plants use natural gas as

major soruce of fuel. The Company has directly made gas sales agreement with PTT Public Company

Limited since 27 October 2000. Under the 25-year agreement, PTT will source and sufficiently supply

431,000 BTU/day of natural gas fromYadana and Yetagun fields in Myanmar to the Ratchaburi Power

Plant. In terms of delivery, natural gas will be supplied by PTT through the 416-mile pipeline from the

Yadana Field to Thailand through Thong Pha Phum District, Kanchanaburi, to Ratchaburi Power

Plant.

EGAT made a Master Gas Sales Agreement with PTT Public Company Limited

on 27 October 2000. Under this agreement, the minimum take liability is clearly stated in case

Ratchaburi Electricity Generating Company Limited cannot receive all the gas supplied by PTT Public

Company Limited according to the master gas sales agreement.

The agreement also clearly specifies quality of the fuel. In case that the quality

of gas supplied by PTT PLC is lower than specified in the agreement, Ratchaburi Electricity

Generating Company Limited has the right to reject and consider this as PTT PLC’ failure to suppy

fuel as agreed. The agreement clearly states tht Ratchaburi Elecricity Generating Company Limited

will continue to receive availability payment. Ratchaburi Electricity Generating Company Limited

therefore has no risk related to PTT PLC’s failure to supply natural gas or to the company’s decline to

receive gas due to poor quality because such incidents do not affect the availability payment or

Ratchaburi Electricity Generating Company Limited’s capability under the power sales agreement.

On 29 August 2002 and 30 September 2002, the Company signed an

agreement with EGAT and PTT PLC to improve Ratchaburi Power Plant’s combustion system in order

to receive natural gas with higher temperature. The temperature stated in the existing gas sales

agreement is between 730-800 BTU/cubic foot. The Company received Baht 238.10 million

compensation for equipment wear and tear, fuel cost and others. The first compensation payment

was paid in 2002 totalling Baht 132.10 million for the improvement of the combustion system,

enabling it to handle the temperature that is as high as 830-840 BTU/cubic foot. The second payment

was received in 2005 totalling Baht 106.00 million for the improvement of Ratchaburi Power Plant’s

combustion system. There is no impact from such adjustment on the power plant’s operations.


Page 26

2) Heavy oil

Regarding the power purchase agreement signed with EGAT, Ratchaburi

Electricity Generating Company Limited has to maintain sufficient reserve of heavy oil to support 5

days of full production capacity. EGAT built, installed and tested heavy oil distribution system and

facilities on Petchakasem Road, 6.5 kilometres away from the Ratchaburi Power Plant on 31 October

2000, according to the combined cycle power plant’s assets sales agreement. At present, the heavy

oil distribution system on Petchakasem Road is completedly built, installed and tested. Ratchaburi

Electricity Generating Company Limited has been operating the facility operations since 1 January

2005.

3) Diesel Oil

Diesel oil is used as secondary source of fuel for the Combined Cycle Power

Plant in case of insufficient supply of natural gas. Ratchaburi Electricity Generating Company

Limited has to ensure sufficient diesel oil reserve at least for 3-day full production capacity. Diesel oil

is transported to Ratchaburi Power Plant in oil tank trucks. The Combined Cycle Power Plant also

uses diesel oil for start-up.

Water Source and Demand

Ratchaburi Power Plant mainly uses water from the Mae Klong River and has a

water pumping station at Tha Rab Subdistrict, Muaeng District, Ratchaburi. Water level in the Mae

Klong River is controlled by the volume of water release from Mae Klong Dam which receives water

from 3 upstream dams – Srinakarin, Vajiralongkorn and Tha Thoong Na. The three dams are

responsible by EGAT while Mae Klong Dam is under the responsibility of the Department of Irrigation.

The power plant pumps up water from the Mae Klong River and channels it through

a steel pipe to the reservoir in the power plant. The pipe is 1.5 metre wide in its diameter, 10.7

kilometres long and is buried at least 1.5 meters under the ground surface. It is buried under the road

and canal. The reservoir can hold up to 1.68 million cubic metres, sufficient for 8.5 day of full

operation without addition water inflow.

The water pipe is laid along the existing high-voltage 115 KV electricity line and the

high voltage 500-KV electricity line that connect with the power plant. The company paid eviction fees

and compensation to tenants for servitude of land used for water pipeline in order to prevent possible

conflict over land use.

A study on water resource management and consumption, including water balance

of the entire Mae Klon River basin using the Reservoir Simulation method by Mahidol University,

showed that the Mae Klong River Basil will not experience water shortage. Water level in the

Srinakarin and Khao Laem dams remain high and that 430 million cubic metres and 220 million cubic

metres respectively can be channeled for agicultural and other acitivites. In case of water shortage

emergency, EGAT will work closely with the Department of Irrigation in considering releasing more

water without adverse impact on other areas of water consumption. The study made in 2000 by


Page 27

Sargent & Lundy, an independent technical advisor, showed that Ratchaburi Power Plant consumes

very little water or approximately 0.5 per cent of the total water demand of 11,200 cubic metres.

Chemicals

Chemicals are used in improving water quality to produce clean and mineral-free

water. They are mostly sourced from local producers.

2.2.2. Reduction of Environmental Impact

In 2013, the Company continued to keep focus on carbon dioxide management

to reduce impact on the climate change. All its power plants have adopted and implemented the ISO

14001 to ensure that pollutants from fuel combustion in the electricity generating process are

maintained within the level allowed by laws. The level of pollutants emitted from its power plants is

maintained at biodegradable level without harming lives and the environment. The strict

implementation has enabled all power plants to efficiently control and manage the environment quality

at the above standard level.

All its power plants also campaigned for less energy consumption in order to

reduce electricity generating activities that increase pollutants from fuel combustion. Ratchaburi

Power Plant which is the Company’s major powerplant has introduced the energy-saving activity

since 2005 and can reduce power consumption by 67,259,651 KWh and reduce the total carbon

dioxide emission by 34,886 tons.

The Company has increased weight for investment in renewable energy which is

clean energy that does not cause carbon dioxide or harm the environment while reducing impact on

Global Warming. More importantly, these energy sources can be renewed, meaning that fossil fuel

will last longer due to less consumption. The Company has adjusted its goal by increasing production

capacity of electricity using renewable energy from 200 MW to 500 MW. In 2013, the Company had

total 156.45 MW installed capacity in Thailand and other countries which can reduce carbon dioxide

by 230,855 ton per year.

Renewable energy has been one of the Company’s key focus and one of its

major businesses. In addition to economic growth, the Company’s renewable energy focus will also

address the corporate’s goal in carbon dioxide management. Many renewable energy investment

projects in Thailand and overseas are in the pipeline.

For other activities than electricity generation, the Company has promoted and

encouraged forest preservation for more carbon dioxide absorption. The Company has been working

with the Department of Forestry in operating the “Love the Forest and the Community Program” for

sixth consecutive years. The program promoted community participation in preserving forests under

the Department of Forestry’s forest community initiative. Community forest is a strategy implemented

by the Department of Forestry to maintain at the country’s forest area at at least 40 per cent. The

“Love the Forest and the Community Program” has been implemented through various activities. In

2013, the project has been implemented and covering 109,792.16 rai which can absorb carbon


Page 28

dioxide by as much as 219,584.33 tons per rai per annum. It is convinced that the overall forest areas

of 109,792.6 will become intact and maintain the fertility of the areas, making them the biggest source

of food and water and with very good preservation scheme.

Ratchaburi Power Plant’s environmental quality monitoring plan introduced in 2013 is as follows:

Activities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Physical Information Meteorological information Overall air quality Accuracy of CEMS Accuracy of AQMS Stack Emission Overall noise level Quality of surface water Quality of underground water/ shallow well

Quantity and quality of waste water

Quality of waste water in gypsum monitoring well

Soil quality Bio information Plankton and surface animals Type and volume of animals Usage Transport Water management and usage

Flood control and water drainage

Quality of life Waste treatment Public health/ statistics related to diseases

Health check-up Occupational health : Dust : Noise : Heat : Light intensity : Acid evaporate - chemicals : Legionella Bacteria in cooling tower

Accident statistics Quality of life/ perception/ opinion of the public

Remarks: = Activities done in the year

CEMS: Continuous Emission Monitoring System

AQMS: Ambient Air Quality Monitoring System


Page 29

Expenses related to environmental activities in 2014

Items Expense (million baht)

Environmental quality monitoring at Ratchaburi Power Plant 4.71

Environmental quality monitoring at Petchakasem heavy oil system 0.94

Waste water quality system control at Ratchaburi Power Plant 0.25

Certification of environment, health and safety standard (ISO 14001/OHSAS18001)

0.34

Waste treatment 1.60

Total 7.84

In 2015, Ratchaburi Electricity Generating Company Limited prepared budget for

environment, health and safety activities as follows:

Items Expenses (million baht)

Environmental quality monitoring at Ratchaburi Power Plant 4.70

Environmental quality monitoring at Petchakasem heavy oil system 0.94

VOCs 0.50

Waste water quality measurement at Ratchaburi Power Plant 0.25

Certification of environment, health and safety standard (ISO 14001/OHSAS18001)

0.31

Rain analysis 0.30

Analysis of irregularity (according to complaints/ weakness) 0.60

General waste treatment 0.26

Production waste treatment 0.84

Monitoring of heavy metal sampling in fish 0.30

Recycled waste bank 0.70

Total 8.90

2.3. Market and competition

2.3.1. Electricity sales

The Company sells electricity solely to EGAT according to the power purchase

agreement. Electricity is transmitted through EGAT’s distribution network. Electricity from generators

will be passed through transformer to increase voltage and distributed to switchyard, 500-KV and 230

KV high-voltage power stations. The electricity will be transmitted from EGAT’s network to the

Metropolitan Electricity Authority and Provincial Electricity Authority before it is distributed to

consumers in general.


Page 30

2.3.2. Electricity Producer and National Attribution Capacity

Total installed capacity as of December 2013 was 33,681.03 MW. Out of this,

15,010.13 MW (44.57 per cent) is contributed by EGAT, 12,741.70 MW (37.83 per cent) is contributed

by large power producers, 3,524.60 MW (10.46 per cent) by small power producers and 2,404.60 MW

(7.14 per cent) is bought from neighboring countries.

Attribution capacity and Local power producers as of December 2014

Power Plant Total

MW %

- Ratchaburi Electricity Generating Holding Public 3,481.00 10.04

- Khanom Electricity Generating Co., Ltd. 748.20 2.16

- Global Power Synergy Company Public Limited 700.00 2.02 - Tri Energy Company Limited 700.00 2.02 - Glow IPP Company Limited (Bor Win) 713.00 2.06 - Eastern Power Company Limited 350.00 1.01 - BLCP Power Company Limited 1,346.50 3.88 - Gulf Power Generation Company Limited 1,468.00 4.23 - Ratchaburi Power Company Limited (Unit 1) 1,400.00 4.04 - GHECO-One Company Limited 660.00 1.90 - Gulf JP Company Limited 1,600.00 4.62 - Small power producers 3,614.60 10.43 Total domestic power 16,781.30 48.40 Total power bought from overseas 2,404.60 6.94 Total production capacity of EGAT 15,482.13 44.66

Total 34,668.03 100.00

Remark: Ratchaburi Electricity Generating Company Limited has a total installed capcity of 3,645 MW with dependable contracted capcity sold to EGAT of 3,481 MW

Source: Electricity Generating Authority of Thailand


Page 31

2.3.3. Power Industry and Competition

Power and related businesses play an important role inthe development of

national infrastructure and other sectors. While the public awareness on market situation,

environment and security of electricity generating system is increasing, many countries in the same

and nearby regions are grouping together to address this concern. As a result, the trend of

international business in these country blocks is positive.

To maintain growth and sustainability in the power business, the Company

understands well and sees that in-depth understanding of the business and capability to address

rapidchanges are crucial. The Company therefore continuously monitors the industry overview in both

target and non-target countries for investment. The industry overview and the Company’s

competitiveness can be summarized as follows:

Power industry in Thailand

In 2014, Thailand’s maximum electricity demand was 26,942.10 MW. Capacity

by type of power plants, from January-November 2014, is categorized as follows: hydroelectric power

plants, 2.98 per cent; thermal power plant, 13.74 per cent; thermal power plants, 24.42 per cent, gas

turbine 0.21 per cent and the 58.65 per cent remaining which is purchased locally and overseas.

Electricity consumption in major markets

Market and competition in Commonwealth of Australia

It is expected that by the year 2023, total electricity generating capacity would

be increased by 20.4 per cent which is equal to 267.0 TWh. Renewable energy, coal and natural gas

will be the fastest growing sectors. Situation and competition in Australia will remain high due to

excessive installed capacity. New entrants will also affect domestic demand. Coupled with unclear

government policy on support through Renewable Energy Target (RET), investment and project

development in Australia are directly affected.

Market and competition in Republic of Indonesia

According to its energy policy, the Indonesian government has assigned PLN

Batubara Company to acquire a coal mine business. The action was taken as there was a forecast

that coal demand and growth will increase in the future. At the same time, dropping global coal price

makes it the right time to invest and grow business. Meanwhile, domestic electricity demand remains

high according to GDP growth, resulting in constantly increasing competition in Indonesia’s energy

sector in accordance with growth in the household and industrial sectors.

Market and competition in Cambodia

From 2015-2023, total electricity generated in Cambodia will be increasing by

16.9 per cent on average. Such significant growth is expected to come from natural gas and hydro

electric power plants. Cambodia currently has many hydroelectric power plant projects under


Page 32

development. The number of power plants will be increasing continuously until the end of 2016.

Renewable energy will also play an important role in pushing for growth. It is expected that net energy

consumption will increase from 3.2 TWh in 2014 to 8.9 TWh in 2023. This opens new opportunities for

investment in the country’s energy sector. However, unclear government policy related to energy

business investment, security and political stability remain major limitation on project development.

Market and competition in Lao PDR

Lao PDR’s government has a policy and plan to develop hydroelectricity for

efficient and sustainable development while reducing impact on the environment and the population

as well as protecting watershed forests. Its national policy was crafted based on four main concepts.

(1) Maintain and expand installed capacity to ensure stability and credibility while promoting national

ability to sustainably produce electricity. Electricity development is targeted to be increased to 90 per

cent by 2020. (2) Improve and expand the Grid System to support industrial sector development,

update current policy and connect Lao’s network with the energy sector in ASEAN through various

energy exchange programs. (3) Encourage business operators and private companies to increase

hydroelectric power plants’ capacity in the country. (4) Promote energy with the target to increase

energy ratio to 30 per cent of the total energy used for electricity generation by 2025. To achieve this

target, the government will offers attractive power purchase rate. The policy has shown that the Lao

government has a clear direction and policy to support this industry, creating good opportunity for

further investment expansion.

Market and competition in the Republic of the Union of Myanmar

The lift of boycott policy has encouraged multinational companies to seek

investment opportunitiesin Myanmar, especially in mining, oil, natural gas, telecommunications, power

industries and infrastructure development. Investors, however, have to closely monitor the situation

due to the rapid changes in the country’s energy policy, monetary and banking stability policy and

political issue in other cities. Energy policy and market situation in Myanmar is likely to become

clearer after 2015. It is expected that in 2015 the total hydroelectricity volume generated in Myanmar

will be only 300 MW. Considering that 2,700 MW will be developed from 2016-2021, and the average

growth is 7.8 per cent per year, the opportunities to invest in the country is huge. Business expansion

and partnership would support growth and add value to the business.

There are opportunities and threats in terms of investment, partnership,

clarity of government policy, and copital required for project development. The Company has to

ensure that its plan and business direction directly address these market situation and competition

while supporting corporate investment policy, return on investment target, acceptable risk level of

each project development and the opportunity presented by the integration of ASEAN Economic

Community which will promote trade and investment liberalization. As stated in its vision, mission and

policy, the Company has been aware and given high importance to the market situation in Thailand

and other countries, especially target countries, ASEAN and the Asia-Pacific. The Company will

continue to optimize its asset management, focus on new power plant projects in the region that it is


Page 33

operating in, new partnership for investment in new markets, creation of added value through

investment expansion in related businesses as well as strengthening internal capability.

Power industry in ASEAN

At the 32nd ASEAN Ministers on Energy Meeting in Vientiane, Lao PDR, on 23

September 2014, the meeting called for ASEAN member countries to cooperate in order to achieve

the ASEAN Plan of Action for Energy Cooperation (APAEC) 2000-2015. The plan will enable the

region to maintain energy stability, security and development that is environmentally friendly and

sustainable.

The meeting also pushed for the Trans-ASEAN Gas Pipeline (TAGP) and the

ASEAN Power Grid (APG) initiatives. The two initiatives’ target is to boost the use of renewable

energy in the region up to 15 per cent of the total power consumption. In addition, the meeting

promotes technological cooperation, clean coal technology, nuclear power for peace and efficient use

of energy within ASEAN. The ASEAN Centre for Energy (ACE)’s capability will be enhanced through

budget increase, recruitment of the Centre’s Director with high capability to optimize organizational

efficiency and building of energy regulators’ network across ASEAN.

In response to the meeting’s resolutions, Thailand’s Ministry of Energy has

prepared Power Development Plan 2015 (2015-2036), focusing on increasing the variety of sources

of fuel used for power generation which will contribute to long-term electricity security. Natural gas

used for power production will be reduced to 30 per cent while clean coal technology will be increased

from currently 20 per cent to 30 per cent. The Department of Alternative Energy Development and

Efficiency has adjusted the ratio of electricity generated from renewable energy from 20,000 MW by

2036, approximately 25 per cent of the total capacity, down to 17,500 MW or approximately 20 per

cent. Electricity generated from biomass and garbage will be fully promoted at the beginning of the

plan while 2,000 MW nuclear power plant will be promoted at the end of the plan.

3. Risk Factor

The Company considers that it is important to regularly assess and analyze significant risk

factors that may have short-term, medium-term and long-term impact on the Company’s Group’s

operations. It regularly reviews risk assessment criteria, in terms of possibility and impact they may

have on the Company’s Group’s business operations, to ensure that the criteria always orrespond to

the Company’s Group’s strategic plan and allow for effective risk management that best address the

rapidly changing market conditions. This is crucial to support business growth and increase returns to

investors because risks from various factors are unavoidable for a business that invests or expands

its electricity generating activities and related businesses in Thailand and overseas. To ensure that

the Company has in place sufficient and appropriate risk factor management, monitoring and control,

the Company always takes careful action in every business process with caution and prudence. Risks

are managed and controlled within the acceptable level. These measures are considered important to

increase success rate of the Company’s Group as planned. The Board of Directors, therefore,


Page 34

assigned the Risk Management Committee to oversee the policy related to risk management and

formulate measures to prevent, alleviate and solve the impact that may occur. The Management is

obliged to follow the policy set by the Risk Management Committee and regularly report the result to

the Audit Committee and the Board of Directors. The Risk Management Committee also established a

Working Group, comprising top level of executives from all disciplines and chaired by Chief Asset

Management Officer, to analyze, monitor, assess and manage risks and report to the Risk

Management Committee on quarterly basis. Major risk factors that may affect the Company’s

business operations and prevention measures are as follows:

Domestic and Overseas Competition Risks

The Company has invested in electricity generating and related businesses in Thailand and

overseas according to the Company’s Group’s strategic plan. Investment, both for existing project

capability expansion and new project development, would be unavoidably subjected to competition

risks from existing and new competitors in local market and overseas. Machinery and technology

suppliers, contractors and fuel suppliers are also interested in energy business. This represents the

diversity and intense competition in the energy sector. It is important to manage financial cost,

machinery cost and project construction management cost as well as to have clear investment

direction and measures in order to ensure that they comply with related local and international laws,

rules and regulations while enabling the Company to remain competitive. To achieve this, the

Company has to assess risk and prepare well in terms of personnel, experts and other factors so that

it can continually increase capability and competitiveness. Risk management direction has been

prepared focusing on seeking business partners whose investment policy matches with the

Company’s Group’s business direction. This is to reinforce the Company’s Group’s capability and

competitiveness. At the same time, the Company always seeks new opportunity to invest in

commercially operated power plant projects with high potential for production capacity expansion to

immediately recognize additional income while reducing risks related to competition in new project

development and construction period. The Company also assigned the Business Development

discipline to analyze and assess risks related to the projects that the Company is interested to invest

in or enter into joint investment. The analysis would include a comparison of all risk factors that may

affect project development cost and future operations, enabling the Company to prepare effective risk

prevention measures from the project development process through to commercial electricity

generating process.

Financial Risks

Energy is a capital intensive business and most of the Company’s capital has been obtained

through loans from local and international financial institutes. Considering this, the Company views

financial risks, ranging from interest rate fluctuation, foreign exchange and cash management, as very

an important factor that requires efficient management. The Company therefore has concentrated on

managing financial cost at the competitive level by looking for low-cost loans from financial institutes,

managing fixed and floating interest rates at the right level to reduce risk from the rapidly changing


Page 35

monetary market, and using various hedging instruments to control and maintain fluctuation at the

very acceptable rate. The Company also ensures a balance between loan currency and income in

order to minimize risks from exchange rate and efficiently manage cash to best address the

Company’s financial needs to achieve investment effectiveness and efficiency.

Operations Risks

While the Company is seeking opportunity to grow its business through domestic and

overseas investment, there are many risks that may affect the Company’s operations and hinder the

Company from achieving its goals. Such risks include economic development, political factor, different

business environment, community and local culture. To ensure that its return on investment and

operational performance will be as planned, the Company pays high attention to the Company’s

Group’s consolidate asset management as well as in each domestic and overseas investment activity.

High level executives with good knowledge, understanding and experience in terms of both business

and local culture, have been assigned to manage and oversee the operations in those countries.

Close monitoring and in-depth analysis by these executives are crucial to help the Company to

understand existing situation and formulate or adjust management direction to appropriately address

the changing situation. The Company’s Asset Management discipline has also been assigned to be

responsible for monitoring the operations of the Company and companies in the Company’s Group,

analyze and compare investment returns against the goal on monthly basis. Efficiency indicator of

each project has been clearly identified. Operational performance assessment has been regularly

conducted on quarterly basis. In addition, the Strategic Plan Management Strategic Plan

Management Team, consisting of top executives from all disciplines, was established to screen,

monitor operations, review policy and set strategic management framework for the Company’s Group

in accordance with current situation and goal. This helps reduce operational risks while concretely

increasing success opportunity. Short, medium and long-term operations plans have been established

to support growth and add value to its business in a sustainable manner as stated in corporate goals

and strategic plan.

Personnel Risks

The rapid expansion and high competition of the energy market has resulted in the shortage

of knowledgeable persons with expertise and related experience. This factor may affect the

Company’s investment expansion and other activities that drive the Company towards success and

achieving goals. Human resource development has therefore been in focus as the Company puts in

place a comprehensive human resource development plan, from recruitment, selection and

maintenance of capable persons, motivation and fair and competitive remuneration and good benefits

compared to the industry standard. In addition, the Company adopts on-the-job training and job

rotation to enhance its personnel competency and knowledge that best supports the Company’s

requirement. The human resource development process is crucial to support the Company’s future

growth in Thailand and overseas and its future investment and project development plan.


Page 36

Corporate Reputation Risks

The Company understands that its investment, development and expansion activities, ranging

from development to construction and power plant operations, which are designed to achieve the

preset goals, may have impact on stakeholders, including community, society or the environment. To

ensure public confidence and recognition in the Company’s professionalism, the Company has

continued its commitment to all obligations and compliance to related laws and regulations,

environmental impact reduction as stated in the Environmental Impact Assessment (EIA), and

accurate, sufficient and timely disclosure of information. The Company has maintained its reputation

and good corporate image through effective communications and corporate social (CSR) activities,

including community relations and environment conservation activities, regular visits and participation

in community activities. Considering itself as a part of the society, the Company is committed to living

in harmony with community, society and the environment, ensuring recognition and trust from

community and creating added value to the society in the long run.

Compliance Risks

Local and international organizations have been increasingly strict in introducing rules,

regulations and laws related to electricity generating business and related business to control,

monitor, prevent, reduce and minimize impact that may occur amidst the rapidly changing economic,

social, political, technology and environmental situations that may affect stakeholders and the public.

Such regulations and laws are designed to minimize or control impact from such risks to the lowest

possible or acceptable levels. At the same time, they open new opportunity for a corporate to achieve

its goal in creating added value to its business, grow and increase long-term returns to shareholders.

In making decision on investment or business expansion, the Company’s Group has to thoroughly

consider, study and understand rules and regulations related to its business operations, society,

environment, occupational health and safety. It has to clearly set measures on closely monitoring of

legal and regulation changes in order to be able to prepare and avoid possible risks related to the

regulatory and legal changes.

The Company is fully aware of and committed to managing risks in all aspects to ensure

smooth business operations and ability to achieve its goal of becoming a leading value-oriented

integrated energy company in Asia-Pacific by operating its business with full respect to related laws,

regulations and rues.


Page 37

4. Asset

4.1. Land, buildings and equipment

1) Ratchaburi Electricity Generating Holding Public Company Limited

Assets

Net residual value (million baht)

As of 31 Dec 2014

1. Land 295.99

2. Building and construction 284.51

3. Vehicles 3.78

4. Durable articles

4.1 Office furniture 158.12

4.2 Office equipment 13.34

4.3 Communication system 0.15

4.4 Computer system 41.47

4.5 Wind farm equipment 2.67

Total 800.03

Remarks: 1) Assets stated above are property of Ratchaburi Electricity Generating Holding Public Company Limited

2) Not including land for future projects. Asset value on date of purchase is Baht 305.39 million and residual value as of 31 December 2014 is Baht 305.39 million.

2) Ratchaburi Electricity Generating Company Limited

Assets


As of 31 Dec 2014

1. Land, comprising

1.1 Land: Ratchaburi Power Plant, 2,158 rai 1 ngan 28.6 square wah*

661.12

1.2 Land: Water pumping station, 2 rai 2 ngan 50 square wah* 3.74

1.3 Land: Pier, 6 rai 1 ngan 63 square wah* 8.27

1.4 Land: Unused land (Petchaburi province), 52 rai 89.9 square wah*

29.94

1.5 Land: Public road, pond and waterway,19 rai 2 ngan 81.6 square wah*

22.22

1.6 Land: Petchakasem heavy oil reception facility, 30 rai 3 ngan 44 square wah*

26.67

1.7 Land : Tri Energy Power Plant, 335 rai 2 ngan 12 square wah* 88.49


Page 38

Assets Net residual value

(million baht) As of 31 Dec 2014

2. Power Plants

2.1 Ratchaburi Power Plant equipment 264.07

2.2 Tri Energy Power Plant equipment 87.72

2.3 Communications equipment in power plants 195.59

2.4 Equipment and tools in Power Plant 24.12

3. Buildings

3.1 Buildings 15.91

3.2 Building improvement 5.40

3.3 Facilities around power plants 6.83

4. Vehicles 1.24

5. Durable articles and equipment

5.1 Furnishing and installation 2.72


5.3 Communication system equipment 0.92

5.4 Computer and network 6.78

6. Machinery under installation 5.75

Total 1,478.96

Remark: Assets stated above are the property of Ratchaburi Electricity Generating Company Limited

3) Ratchaburi Energy Company Limited

Assets


As of 31 Dec 2014

1. Land 21.45

2. Power Plant

2.1 Power plants using flared gas from oil rig 89.55

2.2 Communications equipment in power plants 0.28

2.3 Machinery and tools at power plants 0.03


Page 39

Assets


As of 31 Dec 2014

3. Durable articles


3.2 Decorations and installation 0.30


Total 111.65

Remark: 1) Assets stated above are the properties of Ratchaburi Energy Company Limited and subsidiaries 2) Not include land for future projects. Asset value as of purchase date is Baht 12.69 million and residual value

as of 31 December 2014 is Baht 12.69 million

4) RATCH-Lao Services Company Limited

Assets


As of 31 Dec 2014

1. Durable articles

1.1 Office decorations 4.96


1.3 Communications system 0.04

1.4 Computer system 0.55

2. Vehicles 0.25

3. Works under construction 0.36

Total 7.36

Remark: Assets stated above are properties of RATCH-Lao Services Company Limited


Page 40

5) RATCH-Australia Corporation Limited and Subsidiaries

Assets


As of 31 Dec 2014

1. Land 219.51

2. Power plants

2.1 Power plants 3,326.12

2.2 Gas turbine power plants’ equipment 8,375.62

3. Buildings and constructions 159.57

4. Durable articles


Total 12,082.19

Remark: 1) Assets as stated above are the properties of RATCH-Australia Corporation Limited and subsidiaries

2) As of 31 December 2014, RATCH-Australia Corporation Limited and subsidiaries have mortgaged land, buildings

and power plants as well as power plants equipment at AUD 100 million (Baht 2,688.53 million) for used as

collateral for long-term loans

4.2 Investment in subsidiaries, jointly-controlled entities and joint ventures

Name Type of business

Registered

capital

Investment Proportion

Investment cost

(M. Baht)

Subsidiaries

1. Ratchaburi Electricity Generating Co., Ltd.

Electricity generating

Baht 21,900.00 million

99.99 % 21,900.00

• Holds 45% in Ayudhya Power Company Limited, a jointly-controlled entity

• Holds 40% in Nava Nakorn Electricity Generating

• Company Limited, a jointly-controlled entity

• Holds 40% in Ratchaburi World Cogeneration Company Limited, a jointly-controlled entity

• Holds 35% in Ratchaburi Cogeneration Company Limited*, a jointly-controlled entity

2. Ratchaburi Alliances Company Limited

• Holds 25% stake in Ratchaburi Power Company Limited, a jointly controlled entity

Invest in electricity generating business

Baht 420.00 million

99.99 % 420.00


Page 41


Registered

capital


Investment cost

(M. Baht)

3. Ratchaburi Energy Company Limited

• Holds 49% in Solarta Company Limited, a jointly-controlled entity

• Holds 40% in Solar Power (Korat 3) Company, Limited, a jointly-controlled entity

• Holds 40% in Solar Power (Korat 4) • Company, Limited, a jointly-controlled

entity • • Holds 40% in Solar Power (Korat 7)

Company, • Limited, a jointly-controlled entity • • Holds 40% in Songkhla Biomass

Company • Limited, a jointly-controlled entity • • Holds 40% in Songkhla Biofuel

Company • Limited, a jointly-controlled entity • • Holds 60% in Oversea Green Energy • Company Limited, a jointly-controlled

entity

Invest in electricity generating business using renewable energy and related businesses

Baht 640.00 million

99.99 % 640.00

4. RATCH-Lao Services Company Limited

Operating and maintaining power plant, and investing and operating business activities related to investment in Lao PDR

USD 2.50 million

99.99% 77.86

5. RH International Corporation Limited

• Holds 100% in RH International (Mauritius) Corporation Limited, a subsidiary that holds 100% in RH International (Singapore) Corporation Pte. Limited. Meanwhile, RH International (Singapore) Corporation Pte. Limited holds 80% in RATCH-Australia Corporation Limited and other subsidiaries

Investing, developing and operating overseas electricity generating and related businesses


99.99% 7,000.00

5. RATCH O&M Company Limited

Operating and maintaining power plants

Baht 10.00 million

99.99% 2.50

Total 30,040.56


Page 42


Registered

capital


Investment cost

(M. Baht)

Jointly-controlled entity and affiliations

1. SouthEast Asia Energy Company Limited

(holding 33.33% in Nam Ngum 2 Power Company Limited, a jointly-controlled entity)

Investing, developing and operating electricity generating business in Lao PDR


33.33 % 2,202.25

2. Chubu Ratchaburi Electric

Services Company Limited

Providing powerplant operation and maintenance services

Baht 20.00 million

50.00 % 10.00

3. Hongsa Power Company Limited

Electricity generating business

USD 76.00 Million

40.00 % 983.12

4. Phu Fai Mining Company Limited

Coal mining business

USD 0.05 Million

37.50 % 0.63

5. Nam Ngum 3 Power Company Limited

Electricity generating

USD 0.30 Million

25.00 % 0.45

6. KK Power Company Limited Electricity generating

USD 1.00 Million

50.00 % 15.45

7. Xe-Pian Xe-Namnoy Power Company Limited


USD 306.00 Million

25.00 % 675.32

8. First Korat Wind Company Limited


Baht 1,996.02 Million

20.00 % 399.20

9. K. R. Two Company Limited Electricity generating business

Baht 1,827.00 Million

20.00 % 365.40

Total 4,651.82

Other investment

1. EGAT Diamond Service Company Limited

Providing power plant’s gas turbine maintenance service

Baht 623.00 Million

10.00 % 62.30

Total 62.30


Page 43

The Company is committed to investing, developing and operating electricity generating and

related businesses to achieve its vision of being a leading value-oriented integrated energy company

in the Asia-Pacific. Investment Committee was set up to formulate strategies, goals and investment

plan as well as investment budget and returns or other benefits from the investment that will support

the Company’s production capacity increase and growth. The Committee is also responsible for

screening investment projects as proposed by the Management to ensure that all its investment

projects are interrelated and support the corporate policy according to the Company’s investment

plan, based on the best possible economic returns and other related risks; monitoring, auditing and

assessing the investment and report to the Board of Directors for acknowledgement.

5. Legal Dispute

As of 31 December 2014, the Company has some legal disputes from normal business

operations. Apart from those stated in this section, there is no other case that the Company is the

defendant with the value of monetary claim exceeding 5 per cent of the total equity. The Company is

not involved in other cases or legal dispute that has significant impact on the Company’s business but

cannot specify the impact on number terms or case that is not caused by normal business operations.

1. The Company was the defendant in a case where the plaintiff claimed that the Company

allegedly breached the agreement on joint venture for a power plant project bidding. The action

reportedly caused damage to the plaintiff and preventing it from receiving benefits from winning the

bidding. The plaintiff requested the Company to pay Baht 825 million compensation. The Company

Management, however, strongly believed that the Company was innocent and did not breach the

contract as claimed. The Company was strongly confident in defending its claims in terms of fact and

legal issue. The Company therefore, did not record liability that may occur from such case in its

financial statements. The case is under consideration by the Civil Court.

2. The Company was a co-defendant (3rd defendant) with Hongsa Power Company Limited

(1st defendant) in a legal case where the plaintiff was treated unfairly in a mining services project

bidding in Lao PDR in which the plaintiff entered a co-bidding offer with Hongsa Power Company

Limited. The plaintiff requested Baht 200 million compensation. The case is under consideration of the

President of the Supreme Court on the court’s jurisdiction.


Page 44

6. General Information of the Company, Subsidiaries, Affiliates and Joint Ventures

Ticker symbol : RATCH

Office : 8/8 Moo 2 Ngamwongwan Road, Bangkhen, Muang, Nonthaburi 11000

Tel. : +66 2794 9999

Fax. : +66 2794 9998

Website : www.ratch.co.th

Email : [email protected]

Registered No. : 0107543000031

Nature of business : Invest, develop and operate electricity generating and related businesses

Establishment : 7 March 2000

Stock registered date : 13 October 2000

First trading day : 2 November 2000

Registered capital : 14,500 million baht (1,450 million ordinaryshares)

Par value : 10 baht

Paid up capital : 14,500 million baht (as of 26 October 2000)

Registrar : Thailand Securities Depository Company Limited

62 Stock Exchange of Thailand

Building Ratchadapisek Road, Khlong Toey Bangkok 10110

Tel. : +66 2229 2888

Fax. : +66 2654 5427

Auditor : KPMG Poomchai Audit Company Limited

95 Empire Tower, 48th Floor South Satorn Road, Bangkok 10120

Tel. : +66 2677 2000

Fax. : +66 2677 2222

Legal Advisors : Baker & McKenzies Thailand Company Limited

990 Abdulrahim Place, 25th Floor, Rama IV Road, Bangkok 1050

Tel. : +66 2636 2000

Fax. : +66 2636 2111


Page 45

: Linklaters (Thailand) Ltd.

87/1. Capital Tower, All Seasons Place,

20th Fl Wireless Road, Bangkok 10330

Tel. : +66 2305 8000

Fax. : +66 2305 8010

Company Secretary : Mr. Nawapol Disathien

Email : [email protected]

Tel. +66 2794 9530

Fax. +66 2794 9888 ext. 9530

Corporate Affairs : Mrs. Charusuda Boonkerd

Email: [email protected]

Tel. : +66 2794 9940

Fax. : +66 2794 9888 ext. 9940

Internal Audit : Mr. Pornchai Chamnongdet


Tel. : +66 2794 9520

Fax. : +66 2794 9888 ext. 9520

Investor Relations : Ms. Ananda Muthicharoen


Tel. : +66 2794 9841

Fax. : +66 2794 9888 ext. 9841

Status asof 31 December 2014

1. The Company’s total attribution installed capacity is 6,578.12 MW, including

1.1. 5,565.75 MW from the total of 15 commercially operating power plants and other

investment

1.2. 1,012.37 MW from 7 projects under construction and development

2. The Company’s Group comprises

2.1. 12 subsidiaries

2.2. 22 jointly-controlled entities and affiliates

2.3. 1 other investment


Page 46

The details are as follows :


Page 47


Page 48


Page 49


Page 50


Page 51


Page 52


Page 53


Page 54


Page 55


Page 56

Part 2 Management and Corporate Government

Page 57

Part 2

Management and Corporate Government

7. Securities and shareholders

7.1. Company’s securities

Ratchaburi Electricity Generating Holding Public Company Limited has a total paid

registered capital of Baht 14,500 million, including 1,450 million paid up shares at Baht 10 par value.

7.2. Subsidiaries’ debentures

1. On 31 March 2011, Ratchaburi Electricity Generating Company Limited (the major

subsidiary) issued 13 series of unsubordinated and unsecured debentures with debentureholders’

name and without representative with total value of no more than Baht 13,286,000,000. The

debentures became mature in 2012, totaling Baht 7,603,200,000 while those mature in 2014 totalling

Baht 4,961,400,000. As of 31 December 2014, there are 5series of debentures yet to be mature worth

Baht 721,400,000 with details as follows:

Type : Unsubordinated and unsecured debentures with debentureholders’ name and without representative

Maturity period : 4 years

Total value of issued debentures : Baht 721,400,000

Amount on offer : 721,400 units

Face value : Baht 1,000

Offered price : Baht 1,000

Date of issue : 31 March 2011

Maturity Date : 31 March 2015

Interest rate and period : Fixed at 3.940 per annual throughout debenture life

Interest payment : Paid every 6 months on 31 March and 30 September of each year throughout the debenture life. The first payment was made on 30 September 2011. The last interest payment is made on the maturity date.

Payback period : Payback in full on maturity date

No. of remaining debentures : 721,400 units (as of 31 December 2014)


Page 58

Residual value of debentures : 721,400,000 units (as of 31 December 2014)

Credit rating : AA (TRIS Rating)

2. On 24 August 2011, RH International (Singapore) Corporation Limited (subsidiary)

offered unsubordinated and unsecured and debentures in Japanese yen to international investors.

Total value is Yen 15,000,000,000 and the maturity date is in 2026. The Company is the guarantor of

all the debentures as follows:

Type : Unsecured and unsubordinated debentures


Total value of issued debentures : Yen 15,000,000,000

Date of issue : 24 August 2011

Maturity Date : 24 August 2026

Interest rate and period : Fixed at 2.720% per annum throughout debenture life

Interest payment : Paid every 6 months on 24 February and 24 August each year throughout the debenture life. The first payment was made on 24 August 2012. The last interest payment is made on the maturity date.


Residual value of debentures : Yen 15,000,000,000 (as of 31 December 2014)

Credit rating : BBB (Standard & Poor’s)

3. On 2 May 2014, RH International (Singapore) Corporation Limited (subsidiary) offered

debentures in US Dollar of Senior Note to international investors. Total value is USD 300,000,000 and

the maturity date is in 2019. The Company is the guarantor of all the debentures as follows:

Type : Senior Note


Total value of issued debentures : USD 300,000,000

Date of issue : 2 May 2014

Maturity Date : 2 May 2019

Interest rate and period : Fixed at 3.50% per annum throughout debenture life


Page 59

Interest payment : Paid every 6 months on 2 May and 2 November each year throughout the debenture life. The first payment was made on 2 November 2014. The last interest payment is made on the maturity date.


Residual value of debentures : USD 300,000,000 (as of 31 December 2014)

Credit rating : BBB (Standard & Poor’s ), Baa2 (Moody's)

7.3 Shareholding Structure: Top 10 Shareholders


Page 60

7.4 Dividend Policy

Ratchaburi Electricity Generating Holding Public Company Limited has a policy to pay

dividend at no less than 40 per cent of its total net profit according to the consolidated financial

statements after legal reserve and other reserves. However, such dividend payment also depends on

the Company’s cash flow.

The Company’s dividend payment detail is as follows:

Ratchaburi Electricity Generating Company Limited, the principle subsidiary, has a policy to

pay dividend to the Company at 100 per cent of its net profit after legal reserves and other reserves.

8. Management Structure

8.1. Composition of the Board of Directors

According to the Company’s Articles of Association, the Board of Directors is required

to have no less than 7 members and no more than 15 members. Executive directors shall not exceed

one third of the total Board members. Independent Directors shall comprise no less than one third of

the total directors and no less than three members. No less than half of the directors shall reside

within the country. The Chairman of the Board of Directors shall be a non-executive member and not


Page 61

be the same person as the CEO who is the top management of the Company. The Chairman of the

Board and the CEO are appointed from existing directors by election of shareholders’ meeting or the

Board of Directors. Such composition has been designed for the Board of Directors to perform their

duties in overseeing and controlling, the management and operations and maintain balance of power

in the most efficient and effective manner. The composition of the Board of Directors also ensures

that the Board’s performance is in line with existing regulations.

Directors shall have different expertise, such as engineering, accounting, business

management, economics, law and political science, for example. They shall have the experience,

skills, expertise and the right age that are useful for the Board of Directors to perform their duties in

formulating business direction and policy, supervising corporate management and operations,

providing opinions in depth and in breadth on the issue being considered with consideration to all

possible impacts. Each of the directors shall not have been convicted in a legal proceeding to have

violated laws related to assets in a fraudulent action and have no record on involving in activities that

may create conflict of interest for the Company.

Qualifications of Directors

A Director shall not have prohibited qualifications by law. A Director shall not be a

bankrupt person, an incapable or quasi-incompetent person, shall not have been convicted in a legal

proceeding to have violated laws related to assets in a fraudulent action, never be terminated from a

government or private organizations due to malpractice, have never been deprived from being a

director, manager, employee or an authorized executive in other organization, not be a politician, a

member of the Parliament, Senate, or a member of a local administrative office or administrator, have

educational and work experience or other experience as specified by the Company, devote sufficient

time and full capability for the best benefits of the Company, and have duties to attend regular

meetings.

While in office, a Director can hold directorship in no more than 3 other listed companies.

A Director shall not manage or make any arrangement that would conflict with the Company’s interest

or would provide advantages to other person or entity, and for personal or other person’s benefit.

Appointment and Terms of Directors

General Meeting (AGM). At every AGM, one-third of the Directors shall retire from

office. Directors with the longest stay in office shall retire. A retiring Director by a rotation of office

may be re-elected. In case any Director resigns by reasons other than a rotation of office, the

Board of Directors shall elect any person to replace the resigned Director. The Director so

appointed shall retain his/her office during such time only as the resigned Director is entitled to

retain. Directors of the Company shall remain in their offices for no more than three consecutive

terms, and his/her age shall not exceed 72 years old. Independent Directors shall remain in

his/her offices for no more than two consecutive terms or no more than 6 years. He/she shall not

have prohibited qualifications by law.


Page 62

Independence of Chairman of the Board of Directors

Despite the fact that the Chairman of the Board of Directors is the representative of

EGAT which is a major shareholder holding 45 per cent of the Company’s total stake, the Board

of Directors also comprises eight independent directors, more than one third of the total number

of directors sitting in the Board. As a result, the directors can independently perform their duties

as the shareholders’ representative and there is a proper balance. The Chairman of the Board of

Directors independently performs his duty and does not influence or convince other directors

during discussions, encourages all directors to discuss and express opinion openly by giving

sufficient time to find mutual resolution on all matters considered at the Board of Directors’

meeting.

The segregation of the Chairman of the Board of Directors and Chief Executive

Officer

Chairman of the Board of Directors is not the same person as the Chief Executive Officer

and has no relations with the Management. The segregation of the Chairman of the Board of

Directors and Chief Executive Officer positions has ensured proper balance and prevented one of

them to have excessive power. Responsibilities and authorities of both positions are clearly

separated, which is part of the corporate governance practice. The Board of Directors’ Chairman is

the leader and has significant role in deciding the Company’s policy resulted from the joint meeting

between the Board of Directors and the Management on business goals. The Chairman of the Board

of Directors leads and conducts the meetings in efficient and effective manner, and encourages all

directors to participate in the meeting and openly express their opinion. The Chairman of the Board of

Directors also supports and provides recommendation for the Management operation through the

president and does not intervene in routine work by the Management. The Chief Executive Officer is

the top executive of the Company’s Management whose responsibilities are explained under the

Management Structure section.

Directiorship in other companies

None of the Company’s directors holds positions in more than three other listed

companies, which complies with the SET’s recommendation on efficiency and time contribution.

To enable the Chief Executive Officer, who holds the top position in the management, to

fully perform his duties and have the chance to exchange experience and strengthen relationship with

other companies, the Board of Directors specified in the Company’s regulations requiring the Chief

Executive Officer to hold directorship in no more than five state enterprises or listed companies, not

including subsidiary, affiliates or joint ventures that the Company has to be involved in their

management to protect the Company’s benefit. Mr. Pongdith Potchana, CEO, is not a director of other

companies than the Company’s subsidiaries and joint ventures. The Company also allowed other

directors to hold directorship and management positions in subsidiaries and joint ventures which are

in line with their experience, knowledge and responsibilities.


Page 63

8.2. Directors’ Authority and Duties

Being shareholders’ representatives, the Board of Directors has a duty to ensure that

all the Company’s businesses strictly comply with the policies under legal framework, objectives,

regulations and resolution of the shareholders’ meeting. The Board of Directors is authorized to take

action as stated in the Memorandum of Association and has roles, duties and responsibilities to

manage the Company with integrity and avoid conflict of interest to protect the organization’s benefits

rather than any particular shareholder or group. The Board of Directors’ duties and responsibilities are

formulating strategies, business plan and budget policy; monitoring and following-up the

Management’s activities and checking against the target or forecast, at least every quarter; managing

human resources, including appointing or removing Director or high level executives and appraising

performance against the earlier agreed target which is linked with remuneration; being responsible for

the completion of activities in compliance with rules and regulations, Code of Business Ethics and the

corporate governance principles, with focus on effective and sufficient internal control, communicating

with the stakeholders and the public by providing effective and appropriate communication channels;

and establishing and setting roles and responsibilities of committees; and appraising performance of

the Board of Directors, which requires selfappraisal on yearly basis. (The Company publishes the duty

and responsibilities of the Board of Directors in the Company’s regulation on the Board of Directors

and on the Company’s website.)

8.3. Borad of Diectors

As of 31 December 2014, the Company’s Board of Directors comprised 15 members

with different expertise and experiences and have been nominated and selected by considering their

ability to perform duties in policy making and monitoring the Management’s operations. The directors

are as follows:

1. Mr. Kurujit Nakornthap

Chairman of the Board of Directors and Investment Committee Chairman

2. Captain Siridech Julpema

Independent Director and Audit Committee Chairman

3. Mr. Songpope Polachan

Independent Director and Human Resources and Remuneration Committee

Chairman

4. Police Lieutenant General Thavorn Chanyim

Independent Director and Risk Management Committee Chairman

5. Mr. Satit Rungkasiri

Independent Director, Audit Committee Member and Corporate Governance and

Social Responsibility Member


Page 64

6. Mr. Chavalit Pichalai

Independent Directer and Audit Committee Member

7. Miss Piyathida Praditbatuga

Independent Director and Audit Committee Member

8. Mr. Poonsuk Tochanakarn

Director and Human Resource and Remuneration Committee Member

9. Miss Rattana Tripipatkul

Independent Director and Human Resource and Remuneration Committee Member

10. Mr. Suwit Kongsaengbhak

Independent Director and Risk Management Committee Member

11. Mr. Rum Herabat

Director, Risk Management Committee Member and Investment Committee

Member

12. Mr. Sutat Patmasiriwat

Director

13. Mr. Chuan Sirinunporn

Director

14. Mr. Witoon Kulcharoenwirat

Director

15. Mr. Pondith Potchana

Director and Chief Executive Officer, acting as the secretary to the Board of

Directors

As of 31 December 2014, the Board of Directors of Ratchaburi Electricity Generating

Company Limited which is a major subsidiary comprises members as follows:

1. Mr. Pondith Potchana Chairman

2. Mrs. Siriporn Luangnual Director

3. Mr. Amnuay Thongsathitya Director

4. Mr. Kornrasit Pakchotanon Director

5. Mr. Suthon Boonprasong Director

6. Mr. Suthon Boonprasong Director

7. Mr. Chumphon Thitayaruks Director


Page 65

8. Mr.Athipat Bamroong Director

9. Mr. Teerawit Charuwat Director

10. Mr. Somnuk Jindasup Director

Members of the Board of Directors are specialists with vast experience in different fields.

They were appointed through the recruitment and selection process to ensure their ability to perform

duties in formulating and supervising the Company management’s performance.

The Board of Directors’ Meeting

The Board of Directors’ Meeting Practice: For maximum benefits of the Company and

its shareholders, the Company maintains the Board of Directors’ independence in decision making. All

members of the Board of Directors perform their duty with integrity and for the best benefit of the

Company. As representatives of shareholders, the Board of Directors closely leads, monitors the

operations, guides, assists and supports the management’s operation.

Meeting Schedule, Meeting Agenda and Document Preparation: The Board of

Directors approved the Board’s and committees’ meeting schedules for the entire year and informed

every director of the schedule. In 2014, the Board of Directors’ meetings were scheduled at 16.00

Hrs. of every third Monday of the month.

The Chairman of the Board of Directors and Chief Executive Officer jointly considered the

matters to be included in each agenda to ensure that all significant matters are submitted to the

meeting. They informed the directors in advance and distributed the meeting notice at the appropriate

time according to the Company’s regulation. Directors, however, are free to propose other matters to

be included in the agenda and have to inform this 10 days before the meeting date. In case of urgent

matters which may directly or indirectly affect the Company, directors can propose such matters for

consideration or acknowledgement when the Board of Directors considers other agenda at the

meeting. (Method for deciding matters to be included in the agenda and the method for directors to

propose other matters are stated in the Company’s regulations under the Board of Directors’ section

and on the Company’s website.)

Meeting agenda is grouped for easy consideration and the meeting is run in the preset

sequence - matters to be informed by the Chairman, acknowledgement of the last meeting minutes,

follow-up matters from the last meeting, matters for consideration, matters for acknowledgement, and

others (if any). Regular matters to be proposed to the Board of Directors at the specific period, such

as monthly, quarterly and annual agenda are set in advance. Schedule of monthly performance

analysis report and progress of projects that the Company invests in are also reported to the Board of

Directors’ meeting every month.

The Company sends meeting notice, agenda and related document to each director

approximately one week prior to the meeting date, providing them with sufficient time to study the

information. Directors may ask for more information from the Chief Executive Officer and the


Page 66

Company Secretary Office. Members of committees can ask for more information related to their

tasks from the Chief Executive Officer and through the secretary of each committee.

Roles of the Chairman of the Board, Directors,Management and Meeting Atmosphere

- Chairman of the Board leads the meeting, sufficiently and adequately allocates

time for directors to equally discuss and express opinions, encourages directors to participate in the

discussion and freely express opinions, and summarizes the meeting’s resolutions.

- Directors positively share opinions based on the study of the information provided

by the management and additional information by considering the benefits and impact on the

Company as well as risks for the Company and all stakeholders in order to obtain the meeting

resolution. Directors shall contribute time, knowledge and experience to their role as a director of a

listed company.

- The Management is responsible for providing accurate, sufficient, complete and

timely information that is relevant and necessary to support the Board of Directors’ meeting decision,

as well as present the information in advance in order to allow the directors’ sufficient time to study

the information. The directors shall propose options to the Board of Directors, and provide information

and clarify additional information when asked in the meeting. The Board of Directors requires top

executives from all divisions to attend the meeting and invite other concerned executives for

clarification on specific matters.

- Meeting atmosphere and expression of opinions: The Company provides

appropriate and sufficient meeting equipment and facilities. The meeting atmosphere is open and

encourages all directors to participate in the discussion and openly and positively express opinions

based on mutual benefit and impact on all stakeholders. Each meeting lasted 1.5 hours to two hours

on average.

- The meeting generally considers and discusses each agenda. The management

presents the background, rationale, importance, clarifications and related information to support

decision making process and to support the management’s proposal. The Chairman of the Board

allows sufficient time for all directors to discuss all issues and encourages directors to express

opinions and ask questions on important matters for the management to clarify. After that all will make

decision together, leading to the meeting resolution.

- The Company intends to propose as few matters as possible for the Board of

Directors to rectify. In case of urgent matters or maters that involved the Company’s benefit, the

management will informally meet with the Chairman of the Board and Directors to clarify and discuss

in order to make decision on appropriate action and later proposed to the Board of Directors’ meeting

for rectification.

- Directors who have conflict of interest do not have the right to vote on the matter

(conflict of interest is considered based on the information provided in the conflict of interest report


Page 67

that directors and executives submitted to the Company Secretary) and this has been strictly

implemented in all meetings.

- In considering connected transaction or items that may involve conflict of interest,

the meeting will mainly consider the benefits of the Company and shareholders. The meeting will

consider the necessity and reasons for each matter the same way it does for other transactions.

Correct and complete process and disclosure of information are highly weighted.

- The Company Secretary provides initial recommendation to the management and

the Board of Directors to ensure that all the practice is in compliance with the related regulations,

such as asset acquisition information disclosure, connected transaction and corporate governance.

Meeting Minutes Preparation and Keeping

- The Company Secretary Office is assigned to record, prepare and keep the

minutes of the Board of Directors’ meeting and shareholders meetings.

- Meeting minutes are prepared in writing and cover all important details, including

date and time the meeting begins and ends, venue, list of attending directors and executives, list

oabsent directors, summary of the matters presented in the meeting, summary of the discussed

matters, opinions and observation of the directors, the resolution of the Board of Directors, and the

name of the person who takes notes. Meeting minutes are completed within three days after the

meeting and delivered to all directors for improvement. If there is no addition or amendment is made

within seven days, the report is considered approved and submitted to the meeting’s Chairman to

sign. A copy of the signed meeting report is then delivered to each director for reference.

- After the meeting, the Chief Executive Officer communicates the written resolution

to related units for acknowledgement and/or implementation. Monitoring of the implementation is

assured while the implementation result is reported to the Board of Directors later at an appropriate

occasion.

The Board of Directors and Committee’s Meetings in 2014

(detailed as in Management Structure section)

The Board of Directors of Ratchaburi Electricity Generating Holding Company Limited

‐ The Board of Directors held 13 meetings. In the 13th meeting, non-executive

directors meetings were held before the entire Board of Directors’ meeting.

‐ The Audit Committee held 6 meetings. In the end of the 6th meeting, the

Committee and the auditors discussion was held without presence of the

Management.

‐ The Human Resources and Remuneration Committee held 9 meetings

‐ The Risk Management Committee held 5 meetings

‐ The Investment Committee held 6 meetings


Page 68

‐ The Corporate Governance and Social ResponsibilityCommittee held 1

meeting

Board of Directors of Ratchaburi Electricity Generating Company Limited

- The Board of Directors held 12 meetings

Directors have duty to attend every meeting except when it is unavoidable. In case

a director cannot attend the meeting, he/she may provide opinion on any matter in the meeting

agenda which are distributed in advance. In 2014, meeting attendance of the Board of Directors and

committee appointed by the Board of Directors is as follows:


Page 69

Attendance of the Board of Directors’ Meeting of Ratchaburi Electricity Generating

Company Limited in 2014 is as follows

Name Board of Directors’ Meeting

1 Mr. Pongdith Potchana 9/9

2 Mrs. Siriporn Luangnual 9/9

3 Mr. Amnuay Thongsathitya 9/9

4 Mr. Chumphon Thitayaruks 9/9

5 Mr. Athipat Bamroong 9/9

6 Mr. Teerawit Charuwat 8/9

7 Mr. Suthon Boonprasong 9/9

8 Mr. Kornrasit Pakchotanon 7/9

9 Mr. Somnuk Jindasup 9/9

10 Mr. Sutat Patmasiriwat 2/4 Remarks:

(1) the number before / shows the number of meetings the director attended

(2) the number after / shows the total meetings happened while the director is in office

(3) In the meeting No. 1/2014 to No. 4/2014, there were 10 directors in office

(4) In the meeting No. 5/2014 to No. 9/2014, there were 9 directors in office

(5) Mr. Sutat Patmasiriwat resigned from the office on 1 May 2014

8.4. Management

The Board of Directors has clearly specified separate scope of responsibilities of

Directors and the Management. In summary, the Board of Directors is responsible for formulation

policy and monitoring the implementation by the management. The Management is responsible for

implementing policy and reporting the results to the Board of Directors.

The Chief Executive Officer is the top executive in the Management and is authorized

to manage daily operations of the Company. His/her responsibilities are governing employees and

staff members; managing, hiring, appointing, punishing and terminating employees and staff

members; considering promotion or adjusting salary of employees and staff members, excluding top-

level executives who are Executive Vice President and upper levels; issuing management process or

other operations of the Company that do not conflict with the Company’s regulations and the Board of

Directors’ resolution; and deciding on the scope of work and work conditions for employees to strictly

follow.

In terms of external affairs, the CEO is authorized to act as a signatory except in any

matters that the CEO or persons who have relationship with him may have conflict of interests. Such

action can be taken only when approved by the Board of Directors with the presence of Independent

Directors. In such case, the CEO may authorize any other person to act on his/ her behalf, except for


Page 70

any matter that may hold the Company’s liable as a borrower, buyer or hirer engaged in more than

Baht 30 million. For any contract that is wrongfully made by the CEO which breaches the resolution of

the Board of Directors, the Company will not be held liable, except in case of ratification by the Board

of Directors.

The Board of Directors authorized the CEO to approve projects below Baht 30 million in

total value. Projects with greater value shall be considered and approved by the Board of Directors.

The CEO is authorized to approve donation of no more than Baht 200,000 each. Charitable donation

of up to Baht 300,000 shall be approved by the Board of Directors’ Chairman while donation

exceeding Baht 500,000 shall be approved by the Board of Directors.

In case that the CEO is absent or cannot perform his duty or when the position is

vacant, the Board of Directors assigned Mr. Peerawat Pumthong, Chief Business Development

Officer-1, Mr. Kriengrit Jiajanpong, Chief Business Development Officer-2, Mr. Somnuk Chindasap,

Chief Asset Management Officer, and Mr. Wutthichai Tankuranand, Chief Financial Officer, to act as

the Acting Chief Executive Officer respectively with full authority, except for CEO’s responsibility as a

member of the Board of Directors.

The Company’s Management is divided into five disciplines- Business Development-1,

Business Development-2, Asset Management, Finance and Corporate Administration. The Business

Development-1, Business Development-2, Asset Management and Finance disciplines are headed by

Chief Officer level management. The Corporate Administration Discipline, however, is headed by

Executive Vice President. There are three divisions under the CEO namely, Legal Division, Internal

Audit Division and Company Secretary Office. The Internal Audit Division reports directly to the Audit

Committee

As of 31 December 2014, the Company’s “Management” comprised:

1. Mr. Pongdith Potchana Chief Executive Officer

2. Mr. Peerawat Pumthong Chief Business Development Officer-1

3. Mr. Kriengrit Jiajanpong Chief Business Development Officer-2

4. Mr. Somnuk Jindasap Chief Asset Management Officer

5. Mr. Wutthichai Tankuranand Chief Financial Officer

6. Mr. Prayut Thongsuwan Executive Vice President - Corporate Administration

7. Mrs. Sunee Rajatamutha Executive Vice President - Financial

8. Mr. Sommai Poosanachakorn Senior Vice President - Head of Accounting Control

and Analysis Division

9. Miss. Raywadee Srikongyos Senior Vice President - Head of Financial Planning

and Management Division


Page 71

10. Mrs. Nisaluck Mungpalchol Vice President - Head of General Accounting

Division

11. Mrs. Supatra Thongkarn Vice President - Head of Tax Management Division

As of 31 December 2013, executives of Ratchaburi Electricity Generating Company

Limited are as follows:

1. Mr. Somnuk Jindasap Managing Director

2. Mr. Nataporn Srisingh Director,Coporate Relations Division

3. Mr. Somboon Kositvanit Director, Administration and Finance Division

4. Mr. Payat Chinvili Director, Operating Division

Management Structure


Page 72

8.5. Secretary to the Board of Directors and the Company Secretary

Secretary to the Board of Directors

The Board of Directors appointed Chief Executive Officer as its Secretary. The Board of

Director Secretariat Department under the Company Secretary Office, is responsible for arranging

meetings, administration and coordination for the Board of Directors

Company Secretary

The Board of Directors in the meeting no. 8/2018 heldon 23 June 2008 appointed

“Company Secretary” in order to ensure that Company’s operations comply well with the good

corporate governance of listed companies under the board of directors’ responsibility section, related

laws, rules and regulations, Company’s regulations, policies, and rules and regulations specified by

the regulators and concerned organizations and the Securities and Exchange Act. The Company

Secretary’s responsibilities as specified by the Securities and Exchange Act include arranging the

Board of Directors and shareholders’ meetings; providing initial advice to facilitate the Board of

Directors’ meetings and activities in order to comply with related rules and regulations; handling

secretariat works for the Board of Directors and facilitating the Board of Directors’ activities; ensuring

that the Board of Directors’ resolutions are strictly executed; handling activities related to

shareholders’ rights and proper disclosure of information as regulated by related organizations,

preparing the annual report (Form 56-2) as well as preparing and keeping significant document,

including meeting invitations and Board of Directors’ meeting report, meeting invitation and report of

the shareholders’ meeting, annual report, directors record and conflict of interest of directors and

executives.

The Company Secretary also plays an important role in promoting good corporate

governance by supporting Directors and Chief Executive Officer in performing their duties, as well as

ensuring compliance with good corporate governance policy through implementation by the

Company’s controlling units, including the Compliance Department under the Company Secretary

Office.

Mrs. Boontiva Dansamasatid, Executive Vice President, had performed the duty as the

Company Secretary until 27 July 2014. Due to her increasing assignment and workload, the Board of

Directors appointed Mr. Nawapol Disathien, Senior Vice President - Head of Legal Division, as the

Company Secretary (replacing Mrs. Boontiva Dansamasatid) effective from 28 July 2014 until

present.

8.6. Remuneration for the Directors and Executives

Policy and Criteria on Directors and Executives’ Remuneration

The Board of Directors has formulated the policy and criteria on remuneration of

Directors and high level executives in writing since 2005. This enables the Company to ensure that

remuneration is cab motivate and maintain quality employees while attracting others with appropriate

knowledge, capability, skills and experience that would best benefit the Company’s business. The


Page 73

criteria, method and process are clear, appropriate, transparent, updated and most current.

Remuneration is linked to goals and performances of the Company’s group, dependent on level of

designated responsibilities, comparable to the remuneration offered by organizations in similar

industry and size.

Remuneration of the Board of Directors and all Committees members is screened

and proposed by the Human Resource and Remuneration Committee before seeking approval from

the Board of Directors and later from the Shareholders’ Annual General Meeting.

At present, Directors receive two types of remunerations as follows:

1. Bonus - depending on the length of directorship and on the attendance to the

Board of Directors’ meetings. When a Director holds directorship for more than one position in the

Company and its subsidiaries, the Director shall receive bonus from the company that allocates the

highest bonus at that point in time.

2. The retainer for the Company’s Board of Directors paid on monthly basis and

divided into two portions. The first 75 per cent is fixed and the remaining 25 per cent is paid when the

Director attend meetings. As for the Committees, the payment is made on attendance basis to the

Committee’s meeting. At present, the retainer as approved by the shareholders’ meeting is as follows:

The retainer for the Board of Directors’ Chairman is Baht 50,000 and for

Directors is Baht 40,000 each.

The retainer for committee members: Committee Chairman’s retainer is

Baht 30,000 and Committee member’s retainer is Baht 24,000. The five

Committees comprises the Audit Committee, the Human Resources and

Remuneration Committee, the Risk Management Committee, the

Investment Committee and the Corporate Governance and Social

Responsibility Committee.

Ratchaburi Electricity Generating Company Limited

Remunerations for Chairman of the Board and Director are Baht 40,000

and Baht 32,000 respectively

Renunerations for Committee’s Chairman and Committee Member are

Baht 30,000 and Baht 24,000 respectively. There is one committee which

is the Risk Management Committee.

Executive Director does not receive fixed retainer but is entitled to receive bonus as a Director.

Remuneration for high level executives is in line with the criteria and policy set earlier

by the Board of Directors and must be considered and screened by the Human Resources and

Remuneration Committee. The remuneration is linked with the performance appraisal against the

earlier agree target and must seek approval from the Board of Directors. During the meeting on high

level executive remuneration, none of executives with conflict of interest are allowed to attend. The


Page 74

Board of Directors consider remuneration based on the performance appraisal result and the

Chairman of the Board will inform the Chief Executive officer of such result.

Ratchaburi Electricity Generating Holding Public Company Limited

Remuneration for the Company’s Board of Directors and Committee Members

Unit: Million baht


Page 75

Remuneration of the Company’s Management

Remuneration Number (persons) Total

Salary 5 32.44

Bonus 5 20.64

Contribution to Provident Fund 5 2.31

Total 5 55.39

Remark : The Company’s Management team comprises 15 members

Unit: Million baht

Employees’ remuneration


Salary 190 193.66

Bonus 190 10.50


Other (if any) - -

Total 190 309.45

Remark : As of 31 December 2014, there were 195 employees comprised 41 employees in Business Development 1,

20 employees in Business Development 1, 29 employees in Asset Management, 37 employees in Finance,

45 employees in Corporate Administration, and 23 employees in other.


Page 76


Remuneration for the Board of Directors in 2014

Name Meeting allowance 2013 Bonus Total

Mr. Sutat Patmasiriwat 140,000.00 227,260.27 367,260.27

Mr. Songpope Polachan 0.00 185,643.84 185,643.84

Mrs. Siriporn Luangnual 384,000.00 880,000.00 1,264,000.00

Mr. Amnuay Thongsathitya 384,000.00 880,000.00 1,264,000.00

Mr. Natie Tapmanie 0.00 185,643.84 185,643.84

Mr. Thanakorn Poolthavee 0.00 880,000.00 880,000.00

Mr. Kasemsun Chinnavaso 0.00 185,643.84 185,643.84

Mr. Phitsanu Thongweerakul 0.00 50,630.14 50,630.14

Mr. Suthon Boonprasong 384,000.00 0.00 384,000.00

Mr. Kriengrit Jiajanpong 0.00 185,643.84 185,643.84

Mr. Mongkol Sakulkao 0.00 733,333.33 733,333.33

Mr. Chumphon Thitayaruks 384,000.00 694,356.16 1,078,356.16

Mr. Athipat Bamroong 384,000.00 694,356.16 1,078,356.16

Mr. Teerawit Charuwat 376,000.00 694,356.16 1,070,356.16

Mr. Peerawat Pumthong 0.00 368,876.71 368,876.71

Mr. Somnuk Jindasup 0.00 694,356.16 694,356.16

Mr. Pongdith Potchana 0.00 0.00 0.00

Mr. Kornrasit Pakchotanon 376,000.00 0.00 376,000.00

Total 2,796,000.00 7,590,100.45 10,386,100.45

Unit: Million baht

Remuneration of Ratchaburi Electricity Generating Co., Ltd.’s Directors in 2014


Directors’ remuneration 8 2.796

Bonus 15 7.590

Total 10.386

Unit: Million baht

Remuneration of the Company’s Management


Salary 4 7.512

Bonus 4 11.659


Total 4 19.847


Page 77

Unit: Million baht

Employees’ remuneration


Salary 59 27.340

Bonus 59 13.178


Other (if any) - -

Total 59 42.878

Remarks: /1 Ratchaburi Electricity Generating Company Limited has 10 directors. During the year, 4 directors resigned and were appointed to the office. Executive directors do not receive remuneration for Directors, which is in line with the preset criteria

/2 One director is also a director of Ratchaburi Electricity Genrating Public Company Limited and thus did not receive bonus from Ratchaburity Electricity Generating Company Limited according to the preset goal.

Ratchaburi Gas Company Limited, Ratch Udom Power Company Limited,

Ratchaburi Alliances Company Limited, Ratchaburi Energy Company Limited, RATCH-Lao

Services Company Limited, and RH International Corporation Limited

Directors and executives of these companies are seconded by the Management of the

Ratchaburi Electricity Generating Holding Public Company Limited and did not receive director’s

remuneration from these companies.

8.7. Employees

The number of employees of the Company and its subsidiaries is as follows:

1. Ratchaburi Elctricity Generating Holding Public Company Limited has a total of 195

employees

- 41 persons in the Business Development 1 discipline

- 20 persons in the Business Development 2 discipline

- 29 persons in the Asset Management discipline

- 37 persons in the Financial discipline

- 45 persons in the Corporate Administration discipline

- and 23 persons in other units.

2. Ratchaburi Elctricity Generating Company Limited has a total of 62employees

- 7 persons in the Accounting and Financial discipline

- 4 persons in the Administration and Management discipline


Page 78

- 19 persons in the Technical and Engineering discipline

- 14 persons in the Service discipline

- 5 persons in the Public Relations discipline

- and 13 persons in other units.

Employees Remuneration

To ensure fair remuneration for its employees, the Company has specified

remunerations into three types as follows:

1) Salary that is paid regularly according to individual responsibility and scope of work

by considering the market rate, experience and qualifications of individual

employee

2) Benefits that is paid to assist employees and family, such as provident fund, health

insurance, life insurance, accident insurance, annual heath check, dental fees,

maternity reimbursement, accommodation allowance, emergency financial

assistance and social security

Other benefits such as annual leaves, other leaves, travel allowance, salary/wage

increase and bonus, etc

2014 Remunerations of the Company and its subsidiaries are as follows:

Company Remuneration (million baht)

Ratchaburi Electricity Generating Holding PCL 417.59

Ratchaburity Electricity Generating Co., Ltd. 67.97

Ratchaburi Energy Co., Ltd. 2.37

RATCH-Lao Services Co., Ltd. 15.88

Tri Energy Co., Ltd. 9.13

RATCH-Australia Corporation Ltd. 115.55

Total 628.49

8.8. Human Resource Management

A significant factor supporting the Company’s ability to achieve its objectives, vision

and mission is its people who have appropriate knowledge, capability, skills, experience and attitude.

The Company therefore seeks and retains highly capable people through various recruitment systems

and effective and appropriate selection process and promotes team work and caring culture. One of

the top priorities is to promote quality of life of employees through pleasant work environment and

occupational health and safety based on international standard. In addition, to achieve its corporate

goal to grow in Asia Pacific region, the Company takes good care of employees who are assigned to


Page 79

work overseas and local employees in other countries as well as promotes cultural understanding

among its employees. In 2014, significant human resource management activities are as follows:

1. Organizational restructure

In addressing the Company’s overseas investment strategy and a goal of

increasing enterprise value to Baht 282,000 million in 2023 and production capacity to 9,700 MW in

the same year, the Company has restructured its organization. The new structure, effective from 1

March 2014, better supports organizational operations that will drive company’s success. Its key

essences are as follows:

1) A unit directly responsible for asset management was established to

maximize the value of existing assets

2) Dividing business development activities into two disciplines to separate

responsibility according to geographical locations. This include Business

Development 1 and Business Development 2.

3) Restructuring Financial Divisions in order to support the asset value

optimization strategy and the Company’s investment expansion

4) Improving Corporate Administration departments to increase flexibility and

ability to effectively support administration and corporate tasks.

2. Salary and wage restructure

The Company hired a consultant company to survey and study information to

support salary and wage restructure late 2013 and began to introduce the new salary structure on 1

July 2014 with the following objectives:

1) To retain salary structure’s competitiveness in the labor market, especially

in similar business

2) To ensure that the Company’s remuneration can attract and retain

capable personnel

3) To strengthen employees’ loyalty to the Company

3. Succession plan

The Company prepared Succession plan in order to prepare its employees for

nine management-level posts. Aon Hewitt Co., Ltd. was hired to provide consultancy on this, starting

from May to November 2014. 7 employees at Executive Vice President level and 32 Vice President

level employees participated in this program, totaling 39 employees.

As a result of the Success Plan, the Company will be able to find the right

successor with the right knowledge and capability to replace executives who will retire in the next five

years. This also enables participants to identify their strength and weakness, measure the gap


Page 80

between existing capability and the required capability, and prepare the individual development plan

for self-development in the future.

4. Core value

The Company has changed its core value to better address the current vision and

mission. Core values are:

Reliability: The ability to operate business at the best possible capability,

efficiency and effectiveness to better address and balance the expectation of stakeholders and enable

all parties involved to trust and have confidence to do business with the Company.

Accountability: Supporting corporate growth with professional and responsible

operations and output

Trust: Operating the business based on corporate governance principle, moral

and business ethics as well as social responsibility in order to win trust and confidence from all parties

concerned

Challenge: Commitment to creating corporate value and expanding business to

achieve goals in order to maintain leadership in local electricity generating business while becoming a

leading energy player in the Asia Pacific

Happiness: Organizational happiness refers to employees’ loyalty and happiness

at work. Caring, sharing and teamwork culture and enhancing work environment will motivate and

increase work efficiency in driving the Company to become the “Employer of Choice”.

To raise awareness on the Company’s core values, various campaigns have been

launched throughout 2014, such as posters, communications via Lotus Notes, newsletters, and 3

workshops on Team Synergy: Conveying Core Value. Through these activities, core values have

been cascaded to all employees in systematic manner with full participants of executives and

employees.

5. Human resource development

The Company has a policy to continuously develop its human resources. Each

year, trainings will be held to enhance executives and employees’ specific skills, management skills,

self improvement and specific skills that best suit their designated tasks and those required by laws.

These included in-house trainings and trainings by external institutes in Thailand and overseas.

In addition to in-house and external trainings as specified in the annual training

plan, the Company cooperates with Electricity Generating Authority of Thailand (EGAT) by sending its

employees to join the trainings and seminar arranged by EGAT. This not only enhances employees’

knowledge and skills but also strengthens relationship between EGAT and the Company’s

employees, which will provide greater benefits in the future. Moreover, the Company sent employees

to attend on-the-job training in projects in which the Company has co-invested both in Thailand and

overseas.


Page 81

6. Anti-corruption

Ethics and good corporate governance principle are considered top priorities at the

Company. Code of Ethics has been prepared in writing and used as a practice guideline for the Board

of Directors, executives and all employees. Such guidelines are, for example, not asking for, not

receiving or not making unlawful payment to trade partners and/or the Company’s creditors. The

Company has indicated “Integrity” as one of the core competency. Employees whose responsibility

involves the Company’s significant information are required to sign the confidentiality agreement. As a

listed company, the Company has in place a rule prohibiting the use of insider information for abusive

self-dealing, and requiring its executives, employees, and temporary staff to directly report any

changes in the Company’s portfolio and interests of themselves and concerned person, according to

the regulations of the SET and the SEC. Other rules and regulations on procurement, accounting,

budgeting, finance and personnel management are clearly established. The Company provides for

effective internal control system to ensure efficient and effective operations, the check-and-balance

system and sufficient control on the Company’s assets and property utilization. The Board of Directors

has assigned the Audit Committee to audit and monitor the sufficiency of internal control system every

year. The Company also provides for channels for receiving complaints and clue in case fraudulent

action is found or suspected. Details on this is explained in the Complaints and Report on

Irregularities Clue topic and in the Sustainability Report

The Company also participated in the Thailand’s Private Sector Collective Action

Coalition Against Corruption on 24November 2014. The Coalition Committee already rectified the

Company’s participation on 2 December 2014. At present, the Company’s intention and application

are being certified by the Coalition Committee and are expected to be approved within 2016.

9. Good Corporate Gevernance

Ratchaburi Electricity Generating Holding Public Company Limited has been operating its

business by adhering to the good corporate governance principle and business ethics as well as

promoting operational excellence enhancement. The Company believes such practice will create and

strengthen trust and confidence among its shareholders and stakeholders that will drive the

organization towards success and its ultimate goal which is sustainable growth of the Company, local

community and the Society

1.1. Shareholders’ Right

Throughout 2014, the Company has not found any event or action that suggests the

infringement of shareholders’ right. The Board of Directors and the Management have closely

monitored and ensured that the “Shareholder’s Right”, which has been implemented since 2007, has

always been respected and executed. The policy has been used as a guideline for treating its

shareholders as the owners of the business. This reflects the Company’s high respect of the basic

rights of shareholders and commitment to ensuring that shareholders’ basic rights are well protected.


Page 82

1) Rights to Share Ownership Registration or Transfer

The Company appointed Thailand SecuritiesDepositories Company Limited (TSD)

as its registrar responsible for the Company’s share deposit, collecting and updating shareholders’

information and provides services to shareholders, such as issuing, depositing, withdrawing and

transferring of share certificates, as well as remitting benefits to the shareholders. Shareholders can

contact TSD directly at the TSD Call Center at 02 229 2888. At present, TSD offers online service

through Investor Portal. Shareholders can apply for the service at

http://portal.tsd.co.th/th/investorportal/investorportal.html

2) Rights to Receive Dividend

The Company has consistently paid annual dividend to its shareholders since the

Company’s inception. Dividend has been paid according to the Dividend Payment Policy, as detailed

in the section on Dividend Payment Policy. A continuous monitoring found that a certain amount of

accrued dividend payment that shareholders have not yet received. The Company has tried to contact

the shareholders based on existing contact details by sending a letter to inform the shareholders of

the procedure and how to receive the dividend as well as facilitating shareholders on cheque

reissuing in case of loss or expiration.

The Company also assisted the heirs of the shareholders on share transfer in case

the shareholders passed away. Shareholders are also encouraged to use e-Dividend service for

convenient, fast and safe dividend receiving. The Company has also followed the SET’s

recommendation on preparing the list of shareholders who have the right to receive dividend. At the

Shareholder’s Annual General Meeting Year 2557 (B.E.), the Company used the “Record Date” of 4

March 2014 for shareholders to receive the right to participate in the shareholders’ meeting and

receive dividend. This follows the Article 255 of the Securities and Exchange of Thailand Act. Under

the Record Date method, book closing took place on 5 March 2014. Shareholders whose names

appeared on the book had the right to attend the Shareholder’s Annual General Meeting Year 2557

(B.E.) on 28 March 2014 and receive the dividend on 11 April 2014.

3) Right to Appoint, Terminate and Set Remuneration for Directors

The Board of Directors has strictly followed the Company’s Article of Association,

requiring it to nominate directors replacing the vacant position due to rotation of office and propose

directors’ remuneration to the shareholders’ annual general meeting for approval. Details are stated in

the Management Structure Section.

4) Right to Appoint Auditor and Set Remuneration

The Board of Directors has strictly followed the Company’s Articles of Association

in seeking approval from shareholders at the shareholders’ annual general meeting for the

appointment of auditors and the amount of auditors’ remuneration.


Page 83

5) Right to Attend Meetings

The Board of Directors fully values and respect shareholders’ rights by encouraging

the shareholders, as the Company owners, to participate in the shareholders’ meeting in order to be

involved in significant decision making, updated of the Company’s performance and audit the

performance of the Company’s Board of Directors and Management. The Company views

shareholders’ meeting arrangement as a duty and responsibility to be fulfilled in accordance with

related laws and the AGM Checklist prepared by Thai Investors Association, the Listed Companies

Association and the SEC and the SET. The Company and its management take this as their

responsibility to ensure that the shareholders meeting is transparent, fair and equally benefits all

shareholders and stakeholders.

In 2014, the Company held one shareholders’ meeting - “the Shareholders’ Annual

General Meeting Year 2557 (B.E.)”. In organizing the meeting, the Company strictly followed the

preset rules, maintained quality and efficiency of the meeting and encouraged shareholders to

exercise their right to attend the meeting. This has enabled the Company to successfully organize the

meeting and resulted in continuously increasing number of attending shareholders who actually came

to the meeting and those appointing proxy.

‐ Meeting date and time: The Company held the meeting on Friday 28 March

2014, starting from 14.00 hrs. and ending at 17.00 hrs., totaling 3 hours. The registration was opened

at 12.00 hrs., two hours before the meeting time. To allow shareholders to make decision whether to

attend the entire meeting or only specific sessions, the Company allowed shareholders to register

after the meeting began until the meeting adjourned. The Company did not limit the shareholders’

right to attend the meeting and vote on the agenda under consideration and that resolution was not

yet made.

‐ Venue: The meeting was held at the World Ballroom, 23rd Floor, Centara

Grand and Bangkok Convention Center, Central World located at 999/9 Rama I Road, Pathumwan,

Bangkok. The meeting venue is easily accessed through public transport system, which provides

great convenience for shareholders to travel to the venue. The place is big enough to accommodate a

large number of participants. The Company fully provided meeting facilities, including audio-visual

equipment to support presentation on meeting agenda, computer and barcode system that enables

fast shareholder registration and accurate and transparent ballot.

‐ Identification: Identification document that shareholders have to present to

attend the meeting is checked by the persons appointed by the Board of Directors Chairman.

Identification document checking is done in simple process and in the procedure as informed earlier in

the meeting notice.

‐ Meeting attendance: In the Shareholders’ Annual General Meeting Year 2557

(B.E.), 1,529 shareholders and proxies attended, accounting for 74.69 percent of the total saleable

shares, which constituted a quorum according to the Company’s Articles of Association. The

Chairman of the Board of Directors acted as the meeting’s chairman according to the Company’s


Page 84

Articles of Association. All independent directors, the entire Audit Committee and chairman of each

Committee attended the meeting, except one director who could not attend the meeting. The

Management, auditors and legal advisors also attended the meeting to provide addition information

and answer questions at the meeting.

‐ Meeting invitation: The Company sufficiently and completely informed the

shareholders of the date, time, venue and agenda together with details and the Board of Directors’

opinions on each agenda via the SET’s system before the morning session opening hour of the SET

on 18 February 2014, which is the following day after the Board of Directors resolved to hold the

shareholders meeting. The Company advertised the notice of shareholders’ annual general meeting

in Thai-language newspaper on 19-21 March 2014 and in English-language newspapers on 21-23

March 2014, which are three consecutive days and no less than three days prior to the meeting date

as required by the Company’s Articles of Association.

‐ Meeting notice: The Company delivered to the Shareholders’ Annual General

Meeting Year 2557 (B.E.) meeting notice together with the entire document which is the same as that

published on the Company’s website on 20 February 2014, 36 days prior to the meeting date. TSD,

the Company’s registrar, distributed the meeting notice to shareholders on 13 March 2014, 15 days

before the meeting date according to the legal requirement that demands listed companies to send

meeting notice to shareholders at least seven days prior to the meeting. The meeting notice provided

date, time, meeting venue, together with a map, meeting agenda which is arranged according to their

priority, background, reasons and key issue of each agenda item for consideration or

acknowledgement.

The information included the Board of Directors’ opinion on each agenda to

assist shareholders in making decision. The document sent together with the meeting notice to

shareholders include:

(1) The Company’s Articles of Association related to shareholders meeting

(2) List of document that shareholders have to present to attend the meeting,

proxy appointment, registration, and voting rules

(3) Previous minutes of meeting for shareholders’ consideration and approval

(4) Board of Director’s annual report which contains information about the

Company’s operation in the past year and future projects, financial statements and explanation, and

authorized auditor’s report. In 2014, the Company prepared a short version of annual report

(containing financial statement and operational performance) for the convenience of the shareholders

to quickly acknowledge and audit the Company’s performance. The full version of annual report and

the Sustainability Report was prepared in CD-ROM format and distributed to all shareholders. The

printed versions were delivered to the shareholders upon request. A total number of 186 shareholders

requested the print version of the annual report and Sustainability Report.


Page 85

(5) Profile and brief information of nominees for director election and definition

of the Company’s independent directors.

(6) Three types of proxy appointment forms, as designed by the Department

of Business Development, Ministry of Commerce, as well as a list and information about independent

directors and the Chief Executive Officer who can be appointed as proxy.

(7) Individual shareholder’s registration form with barcode for convenience

and quick registration.

The Company informed the shareholders in the meeting notice and on its

website that they were encouraged to ask questions or ask for more information about the topics

stated in the meeting agenda, and/or provided advices and opinions that are useful for the Company’s

operation prior to the meeting date through post or fax to the Company Secretary or email to

[email protected]. The Company would then clarify or provide additional information at the meeting. In

the Shareholders’ Annual General Meeting Year 2557 (B.E.), no shareholder sent in question or

suggestion to the Company prior to the meeting.

‐ The meeting: Before the Shareholders’ Annual General Meeting Year 2557

(B.E.) began, the chairman of the meeting announced the quorum, assigned the Company Secretary

to record and prepare the meeting minutes, and introduced the directors, management, auditors and

legal advisors attending the meeting. The meeting chairman also declared all the meeting procedures

including voting rules for each agenda and vote counting to meet with the shareholders meeting

regulations of listed companies designed by the SET and to ensure that all shareholders clearly

understand all the details as earlier informed in the meeting invitation. The chairman also announced

the resolution of each agenda right after discussion.

‐ Voting: The Company prepared separate ballots for each agenda for each

shareholder that each shareholder already received when register. Voting process was made simple.

The chairman asked the meeting to raise hands if disagree or do not wish to vote in order that the

Company’s staff members would collect their ballots. Computerized and barcode systems were used

in vote counting.

‐ Checking for transparency, accuracy and completeness: The Company

invited a representative from its legal advisor to act as an independent inspector to check on different

areas, including document presented by the shareholders or their assigned representatives, the

quorum, stakeholders who do not exercise their voting rights and vote counting to ensure that the vote

counting process comply with the Company’s rules and the rules announced by the Chairman. The

inspector also ensured that all ballots were collected from all shareholders attending the meeting,

especially for director appointment session, and that meeting resolutions and vote counting were

correct.

‐ Running the meeting according to agenda: The Company realizes the

necessity for the shareholders to study the information before making decision and strictly adheres to

a principle of not taking any action that will infringe or derogate the right of the shareholders. In all


Page 86

shareholders’ annual general meeting, the Company has never abruptly informed the meeting of

additional significant information, added new agenda for approval, or changed significant information

without prior notice. The matters proposed to the Shareholder’s Annual General Meeting Year 2557

(B.E.) all complied with the legal requirements. The Chairman of the Board of Directors who acted as

the chairman of the meeting controlled the meeting process in the same order as informed in the

meeting notice without switching agenda.

‐ Running the meeting on each agenda: After providing sufficient and

complete background, details, full information for each agenda and recommendation as stated in the

meeting notice, the meeting Chairman allocated appropriate, sufficient and equal time for discussions

that would encourage the meeting attendants to ask questions for the Board of Directors and the

management to clarify for full understanding on related matters. The meeting Chairman then asked

the meeting to vote.

‐ Director appointment and remuneration approval: The director

appointment and remuneration are treated as twodifferent agendas and are voted separately.

Individual vote was arranged for each new director election.

‐ In each agenda: the Company provided ballots for each shareholder. A

computerized system was used to provide convenience for vote counting.

‐ Meeting resolution announcement: After the vote counts, the meeting

Chairman reported voting results by dividing into “agree”, “disagree” and “abstention” votes.

‐ Consideration of other agenda (if any): The Board of Directors allowed for

other agendas (if any) in order to provide opportunities for the shareholders to propose additional

issue other than those set in the meeting agenda. According to the Company’s Articles of Association,

to propose a new agenda for the shareholders’ meeting to consider, the shareholders who propose

the new agenda must represent no less than one third of the sold stocks. In the Shareholders’ Annual

General Meeting Year 2557 (B.E.), no other agenda was proposed for voting. Only some

recommendation and questions about the Company’s operations were raised as recorded in the

meeting minutes.

‐ Meeting resolution publication: The Company submitted the resolution of the

Shareholders’ Annual General Meeting Year 2557 (B.E.), including voting results of each agenda

which specified in detail the agree, disagree and abstention votes, and their percentage, to the SET

by post and through SET’s system before the opening of the morning trading session of 31 March

2014 (the next working day after the meeting date).

‐ Meeting minutes: the Company Secretary, as assigned by the Chairman of

the Board of Directors, recorded and prepared meeting minutes in writing by clearly and adequately

recording essence of each agenda, questions by the shareholders and clarifications by the Board of

Directors and Management, the recommendation from the meeting, and the meeting resolutions,

including detailed voting results in all categories.


Page 87

The Company submitted the complete minutes signed by the chairman of the

meeting to SET, SEC and the Registrar (the Department of Business Development) for auditing and

reference. The report was published on the Company’s website on 4 April 2014, seven day after the

shareholders’ meeting and before the 14-day deadline required by law, to offer opportunities for

shareholders to express their opinions without waiting for the next meeting. Shareholders did not ask

the Company to amend, add or adjust the report.

‐ Meeting quality improvement: The Company arranged a meeting evaluation

form to collect opinions and recommendations from the meeting attendees on the meeting notice and

annual report, facilitation to the shareholders, meeting arrangement and meeting report. The

information collected is used for further improving the arrangement of shareholders meeting in order

to ensure transparency, efficiency and benefits to both the Company and shareholders.

The Company received scoring of full 100 points for the sixth consecutive year

in the Thai Investors Association’s Shareholders’ Annual General Meeting ranking of its shareholders’

annual general meeting assessment in 2014.

6) Right to Receive Information and Significant News in Accurate, Sufficient and

Timely Manner

In 2014, The Company completely followed the regulations, criteria, conditions and

procedure related to disclosure of information and activities of listed companies. There was no

punishment due to failure to submit report by deadline as required by law.

Authorized person: The persons authorized to disclose information and

significant information are the Chairman of the Board, Chief Executive Officer and Chief Officers.

Other organizations responsible for information preparation are

‐ The Company Secretary Office is responsible for preparing document related

to information and significant disclosure through the SET’s electronic channel

and annual report (Form 56-2), and being the contact person for the SET and

the SEC.

‐ The Accounting Division is responsible for preparing financial information,

explanation and the management analysis of the Company’s operations and

financial status.

‐ The Corporate Relations Division is responsble for the preparation of

information disclosure document, media release and press conference.

‐ Investor Relations Department is responsible for preparing the Form 56-1

and analysts meeting.

Communications channel: Based on the commitment to providing complete

and equitable access to the Company’s significant information to all shareholders, the Company

mainly uses SET’s electronic media as the main channel for information disclosure. The channel also

brings greater convenience in communicating with and securing good understanding between the

Company and its shareholders. To achieve this goal, the Company prepared own website


Page 88

(www.ratch.co.th) - to act as another channel to distribute information. The Company regularly

arranges analyst meetings, local and international road shows, press conferences to announce

quarterly and annual performance, distributes news and photo releases of the Company’ activities to

the media, arranges plant visits for institutional investors and analysts, and media relations activities.

These communications channels cover both one-way and two-way communications and the

information is prepared and distributed at the same time in Thai and English languages.

Quality of Information

Quality of information means correctness, clarity, completeness, sufficiency,

being updated, timeliness and transparency of the information. Significant information disclosed by

the Company includes both financial and non-financial information. Such information is not one-sided

but is presented in both positive and negative aspects. The disclosure of information complies with

the related criteria and regulations, such as immediate disclosure of significant information,

comprehensive distribution to the general public, clarification in case of rumors and information about

abnormal stock trading. The Company has never disclosed propaganda information without solid

reasons or insider trading, for example. Disclosure of information shall not cause excessive cost to

the Company and not affect the Company’s competitiveness.

In 2014, the Company’s disclosure of information activities is as follows:

(1) Disclosure of periodic reports such as financial statements, quarterly financial statements, annual report and Form 56-1

26 times

(2) Disclosure of non-periodic reports, such as the Shareholders’ Annual General Meeting Year 2557 (B.E.), resolutions of the Shareholders’ Annual General Meeting Year 2557 (B.E.), dividend payment, investment projects, and progress of investment projects

41 times

(3) Analyst Meeting 4 times

(4) Company Visit 104 times

(5) Local road show 3 times

(6) International road show 5 times

(7) Press conference on operational performance 4 times

(8) Press conference on CSR 1 times

(9) Distribution of news and photo releases about the Company’s activities

28 times

(10) Shareholders’ and investors’ plant visit 1 times


Page 89

(11) Media relations activities 25 times

(12) Media’s participation with the Company’s activities 7 times

(13) Exhibition 2 times

(14) Executive interviews 7 times

(15) Website hits/page views for 2014 average per month) 9,046 times

(from 1 January 2014 - 31 December 2014: 108,553 times)

1.2. Equal Treatment of All Shareholders

The Company treated all its shareholders equally without discrimination of their status

as major shareholders, individual shareholders, or Thai and other nationalities. Major activities are as

follows:

(1) Access to the Company’s Information

To ensure that all shareholders can equally have access to the Company’s

information, the Company uses SET’s channels as the main communication channel. The Chairman

of the Board of Directors, Directors, Chief Executive Officer and Chief Officers are the authorized

persons responsible for the Company’s information disclosure. The Company’s website is provided as

an additional channel for communication. Shareholders can also seek informationfrom related

divisions which are the Company Secretary Office,Internal Audit Division, Corporate Relations

Division and Investor Relations Departmet.

(2) Preparation of bilingual document

For equal treatment of both Thai and international investors, the Company prepares

all published information in Thai and English languages, including all the information provided through

the SET’s, system meeting notice, meeting document and report, press conference and the

Company’s website.

(3) Proposing Additional Agenda for the Shareholders’s Annual General Meeting

and Nominating Directors Prior to the Meeting

Since 2008, the Company has adopted SET’s guideline encouraging listed

companies to offer opportunity for minor shareholders to propose meeting agenda and/or nominate

persons for director election in advance. In 2014, the Company published an invitation to the

shareholders’ meeting through ELCID and the Company’s website on 1 September 2014, providing

clear details about criteria, method, process and channel of agenda proposing. The announcement

was published approximately four month time from 1 September - 31 December 2014, However, none

of the shareholders proposed additional agenda or nominated persons for director election.


Page 90

(4) Proxy Appointment

For convenience, shareholders who cannot participate in the shareholders’ meeting

can appoint other persons to attend the meeting and vote on their behalf. The Company prepared and

delivered proxy document to the shareholders together with the meeting notice. Proxy is available in

three forms as designed by the Department of Business Development. Form A is the general proxy

appointment form. Form B is a proxy appointment that lists specific items for proxy appointment. Form

C is the proxy appointment that is used only when the shareholder is a foreign investor with a

custodian in Thailand. Shareholders can also download the proxy document from the Company’s

website or use other form of proxy or prepare it themselves.

The Company nominated four independent directors and the Chief Executive

Officer for shareholders to appoint as their proxy to attend the meeting and vote on their behalf.

Personal information of each nominated person and each person’s conflict of interest status were

provided on each concerned agenda. In the meeting, 187 shareholders assigned the Company’s

independent directors as their proxy while 12 shareholders assigned the Chief Executive Officer as

their proxy.

(5) Ballots

In voting at the shareholders’ annual general meeting, the Company prepared and

provided ballots for every participant. Computerized system was deployed for tallying. In voting for

directors, individual vote and ballot was kept as reference.

(6) The Company Proposed No Additional Agenda

The Board of Directors has the policy not to propose new agenda other than those

informed in the meeting notice as it realizes the importance and necessity for the shareholders to

study information before making decision. Shareholders can propose additional agenda for

consideration if necessary, by following the Company’s rules. At the Shareholders’ Annual General

Meeting Year 2557 (B.E.), there was no additional agenda proposed.

(7) Report on the Shareholding in the Company

The Board of Directors and the Management have the duty to report their

shareholding in the Company to the SEC. The Board of Directors required its directors, executives,

spouses and children who have not reached legal age to report their shareholdings in the Company

and the report is included as an agenda in the monthly meeting of the Board of Directors.

(8) Prevention of the Abuse of Inside Information

The Board of Directors has formulated and implemented measures to prevent

Directors and the Management from insider trading. The Board of Directors has prepared written

guidelines on internal information keeping and prevention of internal information usage for abusive

self-dealing. Since the inception of the Company, it has required its directors, management and

employees to directly report any changes in the Company’s portfolio of themselves, their spouses,

and children who have not become sui juris to the Chief Executive Officer within three working days


Page 91

after the changes happened. The guidelines were announced in 2003 and continue to be effective

today.

In 2014, there is no complaint related to unequal treatment of shareholders or

charge on directors or executives for not reporting portfolio as required, or on the use of insider

information for abusive self-dealing or others’ benefits.

1.3. Role of Stakeholders

1) Stakeholders Policy

The Company adheres to the principle of “promoting and ensuring that the right of

stakeholders, such as customers, employees, business partners, investors, competitors, independent

auditor, the government sector and communities in which the Company locates, is well protected and

treated” as announced in the Good Corporate Governance introduced back in 2003. Later in 2007,

the principle was incorporated into the policy customized for individual stakeholder group, which has

been published on the Company’s internal communication channel and on its website. The policies

include the Shareholders Policy, Employees Policy, and Social and Environment Policy, the Network

and Computer Usage Policy, Occupational Health and Safety Policy, and the 5S Policy (which are all

published on the Company’s website). In 2014, activities related to this policy are as follows:

Shareholders: The Company constantly monitored and ensured the compliance

with the Shareholders’ Policy related to basic right protection; equal treatment of shareholders; quality

information disclosure; encouraging shareholders to attend shareholders meeting to participate in

decision making on significant matters and to acknowledge the Company’s operation and activities,

as well as to monitor the Board of Directors and the management’s performance; implementation of

measures to prohibit the use of insider information for personal interest of the Board of Directors or

the Management to protect shareholders’ benefit; and ensuring no infringement of shareholders’ right.

Details are as reported in the Shareholder’s Right and Equal Treatment of Shareholders topics. With

clear guidelines, there was no complaint about the shareholders right infringement, Board of

Directors’ mistakes or abusive-self dealings by the Company’s executives.

Employees:The Company considers that employees are valuable and important

resource in driving the Company’s business progress and ability to achieve its target. It therefore

formulates employee policy that covers the management and development of employees, activities

and actions related to human resource development in order to enhance people’s capability,

competency, and desired behaviors that support the corporate values which also directly support the

Company’s direction, strategy and goals focusing on value creation and productivity increase.

Community, Society and Environment: The Company’s Social and

Environmental Policy promotes participation from community and gives high priority to good

communications to ensure its position as “a good neighbor”. This also promotes community

development for sustainable living, local culture and tradition conservation and environment

preservation for natural and life balance.


Page 92

- In ensuring good understanding and strong relationship with communities in

the area where the Company has or plans to have business activities that are important to the

Company’s success, the Company strictly follows His Majesty’s “Understand, Reach and Develop”

concept in its operations. Some of the activities are assistance provided to those affected by natural

disaster, scholarships granted to schools and educational institutions in the areas the Company

operates, and various quality of life and environment development activities in the communities

surrounding its plants. These include the Company’s own initiative projects and those created by

community, local administration, government agencies and other organizations.

- “Love the Forest and the Community Program” project continues to be a

major social and environmental responsibility projects. In 2014, the Company continued the project, in

cooperation with the Department of Forestry, for the seventh consecutive years and the second year

in Phase 2 (2013-2017). The Community Forest Contest was held, where the winners won a trophy

from HRH Princess Maha Chakri Sirindhorn. In addition, the community forest leaders meeting was

held to promote sharing of knowledge and learning among people in the network and exemplify the

achievement of successful communities. The Klayim Youth Camp was continued to instill commitment

to forest and natural resource conservation among the young generations. These projects also

address the Company’s commitment to reduce carbon dioxide emission which helps slow down the

Global Warming situation.

- “Watershed Forest for Carbon Sink Creation”: The Company cooperated with

the Office of Preserved Area Management Region 13 (Phrae), Department of National Parks, Wildlife

and Plant Conservation in growing 200,000 seedlings of local and fast-growing plants on a deserted

forest area covering 1,000 rai on Doi Phu Kha, Nan. The main objective is to bring degraded forests

back to life with larger biodiversity. The project period is three years (2014-2016) and covers planting,

maintaining and monitoring. When the trees are fully grown, the area will become a watershed forest

and a carbon sink that can absorb 2,000 tons of carbon dioxide per year. (Interested persons may

study details of the projects and social and environmental activities in the Corporate Social and

Environmental Responsibility section).

In 2014, the Company continued its activities under the policy retated to social

and environment and had no conflict cases related to the Company’s business impact on community,

society and environment.

Other stakeholders: Although the Company has not yet announced specific

policies on stakeholders other than stated above, such as customers, partners, shareholders,

investors, creditors, competitors, independent auditor and government agencies, the Company is

aware of their importance and possible impact of the Company’s operations on them. As a result, the

Company has ensured that all the stakeholders are treated well under the guidelines for the

management and employees’ practice which are specified as part of the Business Ethics. (Details are

published online under the Company’s Business Ethics topic at www.ratch.co.th.)


Page 93

Network and Computer Use: The Company has introduced the “Network and

Computer System Policy” since 2010. The policy draws guidelines for employees and network

managers’ operation to ensure smooth, efficient and most effective use of the computer network, as

well as strict compliance with the Computer Crime Act. The Company also improved the efficiency,

security and prevention to network harm.

2) Risk Management

In recognition of the importance of risk management which needs to be carefully

considered and handled and the appropriate prevention and solution to mitigate possible impact on

various stakeholders, the Company has since 2003 announced the “Risk Management Policy” and

established the “Risk Management Committee” to be responsible for identifying risk factors, setting

measures to manage risks in the acceptable level to prevent impact on the business operations and

stakeholders, and reporting to the Board of Directors on quarterly basis. The Company gives high

priority to warning signs and irregular items, enabling it to quickly adjust strategies, plans and

management method. (Details are as in the Risk Management Committee’s Report, Management

Structure and Risk Factors sections.)

3) Anti-corruption

Ethics and good corporate governance principle are considered top priorities at the

Company. Code of Ethics has been prepared in writing and used as a practice guideline for the Board

of Directors, executives and all employees. Such guidelines are, for example, not asking for, not

receiving or not making unlawful payment to trade partners and/or the Company’s creditors. The

Company has indicated “Integrity” as one of the core competency. Employees whose responsibility

involves the Company’s significant information are required to sign the confidentiality agreement. As a

listed company, the Company has in place a rule prohibiting the use of insider information for abusive

self-dealing, and requiring its executives, employees, and temporary staff to directly report any

changes in the Company’s portfolio and interests of themselves and concerned person, according to

the regulations of the SET and the SEC. Other rules and regulations on procurement, accounting,

budgeting, finance and personnel management are clearly established. The Company provides for

effective internal control system to ensure efficient and effective operations, the check-and-balance

system and sufficient control on the Company’s assets and property utilization. The Board of Directors

has assigned the Audit Committee to audit and monitor the sufficiency of internal control system every

year. The Company also provides for channels for receiving complaints and clue in case fraudulent

action is found or suspected. Details on this is explained in the Complaints and Report on

Irregularities Clue topic and in the Sustainability Report.

The Company also participated in the Thailand’s Private Sector Collective Action

Coalition Against Corruption on 24 November 2014. The Coalition Committee already rectified the

Company’s participation on 2 December 2014. At present, the Company’s intention and application

are being certified by the Coalition Committee and are expected to be approved within 2016.


Page 94

4) Complaint and Report on Irregularities Clue

Stakeholders can report clues or lodge complaints about actions that breach the law

or ethics, incorrect financial statement, or problems with internal control to the Company’s

Independent Directors or the Audit Committee for further investigation and reports to the Board of

Directors. Stakeholders can communicate directly with the Company or through the provided

channels, including website where they can contact the Company Secretary, Internal Audit, Public

Relations or Investors Relations units, or other channels that stakeholders view as appropriate.

Specific channels are provided for employees to report and complain on unfair

treatment according to the Company’s regulations on Personnel Management under Complaint

section. The Company has also provided for protection of the complainants against employment

termination or punishment when they provide information, truth, fact or any evidence related to the

complaints or are responsible for the sincere consideration of the complaints that eventually create

adverse impact on the Company.

5) Transaction that May or May Not Have Conflict of Interest

The Company has clearly set guidelines on transaction that may or may not have

conflict of interest in order to protect the best benefits of the Company. This also provides a guideline

for appropriate practice, correct and complete information disclosure as required by related rules and

regulations, and practice of directors and the Audit Committee who play important roles in formulating

measures to prevent conflict of interest and ensuring that the operations are smooth and reasonable.

The Company’s regulation on the Board of Directiors included the transparent management of conflict

of interest. The regulation specified that directors who may have conflict of interest on any particular

area shall not have the right to vote at the Board of Directors’ meeting during a consideration in that

area.

The Board of Director, through the approval by the Audit Committee, has ensured

that connected transaction between the Company and its subsidiaries are in the best benefits to the

Company, its subsidiaries and shareholders. Transactions between the Company and its subsidiaries

are considered based on the same pricing and conditions as in transaction with other business

partners. Accurate and complete disclosure of such transactions is required according to related

regulations. For flexibility and convenience, the Board of Directors authorized the Chief Executive

Officer to approve normal connected transactions or regular business transaction, with general

conditions and trade agreement, within Baht 30 million limit. The transaction shall be reported at the

quarterly Board of Directors’ meeting, according to the Article 89/12 under the Securities and

Exchange Act.

6) Report on Conflict of Interest of Directors and Executives

The Board of Directors has created the “Conflict of Interest of Directors and

Executives Report Form” and required all Directors and Executives to prepare conflict of interest

reports for themselves and their related persons. The report must be submitted to the Company

Secretary for reference and further submitted to the Chairman of the Board of Directors and the


Page 95

Chairman of the Audit Committee. The report is used for the Board of Directors’ consideration and

decision on stakeholders who have or may have conflict of interest and do not have voting rights on

the Company’s transactions.

7) Environment and Occupational Health Standard

The Company has continuously and seriously encouraged its subsidiaries and their

power plants to adopt international standard, such as the ISO 14001, OHSAS 18001 and other

standards issued by the Department of Industrial Works.

8) Community Participation

One of its top priorities under the Company’ social and environment policy is to

promote community participation which has been implemented in every stage and period of its

operation and project development. During project development period, the Company studied

technical information in parallel to a study on economic, social, culture and way of life of the nearby

communities in order to prepare community participation plan and key communication messages as

well as activities to promote understanding between the project and communities. Public hearing was

also held to provide opportunity for the communities to share their view on the areas required by

government agencies and related authorities. During the construction period, the Company

communicated regularly with the communities to ensure understanding of the project development

and the Company’s policy. When the project is up and running, effective communications with the

communities continue. The Company always listens to the communities’ recommendation for on-

going development and improvement of activities that better address community needs.

Ratchaburi Electricity Generating Company Limited also initiated the “Ratchaburi

Power Plant Environmental Inspector Committee”, comprising representatives from communities,

community leaders, local administration and provincial administration. The committee is responsible

for monitoring and ensuring that the power plant operations are in accordance with the Ratchaburi

Power Plant’s prevention and reduction of environmental impact measures stated in the

environmental impact assessment and environmental quality monitoring operation plan. The

committee also acts as the center for cooperating with power plants, providing information and news

update or problems and possible issues that may cause problems, and recommendation shared by

communities. The meeting serves as another important channel that promotes community

participation in monitoring the Company’s operation.

1.4. Disclosure of Information and Transparency

1) Type of Disclosed Information

The information being disclosed comprises financial and non-financial information

and periodic and non-periodic report. The objective of the report is to provide sufficient and complete

information that support the readers’ investment decision.


Page 96

2) Quality of Information

Quality of information means correctness, clarity, completeness, sufficiency, being

updated, timeliness and transparency of the information. Significant information disclosed by the

Company includes both financial and non-financial information. Such information is not one-sided but

is presented in both positive and negative aspects. The disclosure of information complies with the

related criteria and regulations, such as immediate disclosure of significant information,

comprehensive distribution to the general public, clarification in case of rumors and information about

abnormal stock trading. The Company has never disclosed propaganda information without solid

reasons or insider trading, for example. Disclosure of information shall not cause excessive cost to

the Company and not affect the Company’s competitiveness.

Quality of disclosed information includes accuracy, completeness, clarity, sufficiency

and timeliness as mentioned in the Shareholders’ Right. The Board of Directors has prepared the

Board of Directors’ Report on its Responsibility to Financial Reports and published it together with the

Auditor’s Report in the annual report and the Audit Committee provided its opinion on the quality of

the financial statements as published in the Audit Committee’s Report.

Quality information disclosure not only reflects the Company’s transparency but also

enhances investors and related persons’ confidence and trust. As a result, the Board of Directors

closely supervised and monitored to ensure that responsible persons sufficiently provide at least the

information as required by law and that investors have equal opportunity to receive such information.

3) Information Disclosure Channels

The Company has clearly assigned specific persons to be responsible for the

disclosure of different types of information. SET’s electronic communications channel is used as the

main channel for information disclosure. The Company also prepares website, press conference to

announce its performance, analysts meeting, press release distribution, local and international road

shows and other activities as reported under the Type of Disclosed Information section.

The Company gives high important to disclosure of information. The Board of

Directors and the Management have closely monitored and ensured that the information disclosure

process complies with the criteria and regulations and strictly supervised the implementation of such

activity. Authorized and responsible persons are designated while information distribution channels

are developed to ensure information disclosure quality.

4) Investor Relations

The Company assigned the “Investor Relations Department” to be the center for

communicating, providing information and news, as well as fairly and equally arranging activities to

create and strengthen relationship between the Company and its shareholders, institutional investors,

retail investors, analysts and concerned government agencies. The department is also responsible for

preparing annual investors’ relations plan. The Company’s Chief Executive Officer and top

management always act as the Company’s spokespersons who report, provide additional information,

clarify and answer questions at the analyst meeting, local and international road shows. Interested


Page 97

persons may contact the Investor Relations Department by sending letter by post to the Company, or

call +66 2794 9841 or fax +66 2794 9888 Ext. 9841 or through the Company’s website

www.ratch.co.th or sending emails to [email protected].

5) Disclosure of Director and Executive Remuneration Policy and Payment

The Board of Directors has disclosed the director and executive remuneration

payment policy and individual director and executive remuneration by categories. This annual report

also included overall employees’ remuneration. (Details are explained under the Management

Structure section.)

1.5. Roles, Duties and Responsibilities of the Board of Directiors

(1) Roles, Duties and Responsibilities of the Board of Directiors

The Board of Directors is committed to independence in decision making for the

best benefits of the Company and shareholders. Each of the Company’s directors realizes the

responsibility towards the shareholders who are the business owners and have the right to appoint

the directors. Fiduciary Duty covers four major responsibilities namely Duty of Care, Duty of Loyalty,

Duty of Obedience and Duty of Disclosure.

‐ Responsibility in Formulating Policy and Operation Direction

To ensure strong basis for effective and efficient management that supports the

Company’s growth and sustainability, the Board of Directors has worked closely with the management

in formulating and implementing policies as already discussed under the Business Ethics and

Corporate Governance Policy.

The Board of Directors is responsible for working with the management in

formulating the Company’s vision, mission, business plan, goals, business strategies, budget,

organizational structure and remuneration structure. The Board of Directors also ensures that the

Company’s vision, goal and performance are clearly communicated to Directors, the management

and employees and are regularly reviewed every year or when necessary.

In formulating strategies, the Board of Directors and the management jointly

consider various information, including the nature and structure of the Company’s business, vision,

mission, policies, goal, investment plan and performance result and appraisal compared to the

business goals. Both also consider internal environment, namely management structure, personnel

finance, strategy selection, trade partner relationship and customer information, while considering

external factors, including power business structure, and electricity production capacity development

plan. Other factors taken into consideration are external factors that have significant impact on the

Company’s operations, such as the ASEAN Economic Community (AEC) integration, government

policy, electricity demand growth, oil price, production resource limitation (fuel and technology),

economic, social and environmental limitation, competition in the power business, industry analysis,

production factor and macroeconomic factors in international countries and the target selection in

order to materialize the Company’s vision.


Page 98

‐ Monitoring and Assessment of the Management

Company’s operation fully complies with the corporate governance principles. The

policy is regularly reviewed and communicated to directors, executives and employees of all levels.

Result of corporate governance implementation is announced publicly and also included in the annual

report.

The Board of Directors requires the Management to regularly report to the Board

of Directors’ meeting a number of areas including monthly report (operational performance analysis,

progress of the Company’s investment projects, financial report on short - and long-term investment

projects, cash flow, and the highest electricity generating capacity report, electricity capacity within

EGAT and national systems, and energy stock prices), quarterly reports (quarterly financial report),

annual reports (annual financial reports, annual operational performance compared to target) and the

reports by the committees appointed by the Board of Directors.

In addition to reports and routine monitoring, the Company’s Board of Directors

uses other channels to monitor the efficiency and effectiveness of operations. Other channels are

executive meetings of the Company and its subsidiaries as well as monthly internal executive

meetings, such as top executive meetings and division directors meetings. In those meetings, the

Board of Directors has the opportunity to monitor, acknowledge, prevent, and solve operational

problems. In addition, manager level employees are required to attend the internal management

meetings every three months.

‐ Role in Initiating Necessary Changes or Handling Issues

The Board of Directors plays a significant role in setting or initiating important

changes in the organization, such as organizational structure improvement, business plan, appraisal

criteria and performance indicators for the Company and its top management. The Board of Directors

and the Management fully discuss all details before making decision.

The Board of Directors also places great emphasis on community participation,

green energy and carbon credit follow-up and implementation which becomes an increasingly

important trend.

The Board of Directors plays a significant role in providing advices on solving

problems and issues raised by the Management at the Board meeting. On sensitive issues, the Board

of Directors will assign directors to consider and work closely with the management. Directors who are

representatives from government sector play vital role in providing clarification on government

policies, rules and regulations and related practice, enabling the Company to better understand the

intention of the regulations and take better action. Directors from private sector meanwhile help

provide new ideas that promote operational efficiency. Directors provide recommendations to the

Company according to their specialization, including legal, finance, tax and engineering. Directors on

secondment assignment in subsidiaries and joint ventures have supervised the operations of the

subsidiaries and joint venture to be in compliance with the Board of Directors and the Company’s

policy.


Page 99

The Board of Directors requires the non-executive directors to meet informally at

least once a year to allow them opportunity to review and discuss the performance of the Board of

Directors, management and the Company, as well as discuss administrative problems without

participation of the Management. Results from the discussion are applied in order to improve the

efficiency of the Board of Directors. The meeting report is presented to the Chief Executive Officer

after the meeting and used for further efficiency improvement of the Board of Directors.

In addition, the Company organized informal meetings among directors in different

forms, including participating in the Company’s activities, such as corporate social and environment

responsibility projects, sports and entertainment activities held on various occasions to promote good

understanding and good relationship among directors, and between directors, the management, and

employees.

(2) Executive Assessment

With assistance from the Human Resources and Remuneration Committee in

assessing annual operational performance of top executives, the Board of Directors adopts the

performance appraisal criteria that were agreed early of the year. In 2013, the criteria comprised four

areas - business planning and development, supervision of companies within the Company’s Group,

financial management and organizational management. Each area has different weight and the

assessment result is used to complement the remuneration of each director. In addition, the Company

assessed the Chief Executive Officer and top-level executives in terms of capability and management

skills, including leadership, strategy formulation and implementation, financial planning and

performance, networking, business knowledge and understanding and qualifications.

(3) New Director Orientation and the Development of Directors and Executives

The Board of Directors helps newly appointed director by providing orientation kit.

The President presents a briefing at the orientation session. Information included in the orientation kit

are nature of business, details of committees, investment structure, organizational structure, financial

performance an progress of investment projects, Memorandum of Association objectives,

certification, rules and regulations, policy, Code of Conduct, remuneration and benefits for directors,

the manual for directors of a listed company and compliance database.

To promote understanding of roles, duty and responsibility as well as necessary

skills for the directors to do their job best as the directors of a listed company, the Company has a

policy to encourage the directors to participate in seminars arranged by related organizations, such as

the Institute of Directors (IOD), the Stock Exchange of Thailand and Thailand Energy Academy.

(Details of the training and seminars on important topics that promotes effective performance as a

director of a listed company are reported in the Board of Directors Section.)

The Company prepared a summary report that is related to rules and regulations

implemented by the government’s regulatory organizations and presented to the Board of Directors’


Page 100

meeting for acknowledgement of the announcement, rules, regulations and memorandum, both newly

issued and amended by the SEC and SET.

The Board of Directors adheres strictly to the legal requirement and regulations of

regulatory organizations. The management has prepared a summary of related information, including

announcement, regulations, rules and memorandum that are newly issued and improved by the SEC

and SET, for presentation to the Board of Directors for acknowledgement.

The Company sent executives and related employees to attend the corporate

secretary, corporate governance, internal audit, risk management and other related courses

organized by various institutes and organizations. This enables directors and employees to better

understand their responsibilities, which supports the operations of the Board of Directors and

committees.

(4) Succession Plan for Top Executives

The Board of Directors assigned the Human Resources and Remuneration

Committee to prepare succession plan for top executives. The succession plan for the Chief

Executive Officer follows the policy of the Company’s major shareholder - EGAT. EGAT will nominate

to the Board of Directors through the Human Resources and Remuneration Committee its executive

who has appropriate qualifications, knowledge and capability to perform the task and brings greater

benefits to the Company.

The succession plan for other executives has been developed by analyzing

competency and expected qualifications of different positions. The guideline will support human

resource development and nomination of qualified persons to promote, demote, retire, move, replace

vacancy and prepare the Company’s personnel for current and future expansion. (Succession Plan is

already discussed under the Role of Stakeholders - Employees.)

(5) Allocation of Reserve for Loss from Operations of Directors and Executives

Directors and executives perform duties as entrusted or do the job resulted from

their status and titles for the benefit of the Company, including to hold the position in other companies

as directed. In case there is any lawsuit claiming due to such performance, the Legal Division will be

responsible for the defense until the case becomes final. The Company has set aside Baht 2 million a

year as a reserve for loss if the duty is duly performed as a result of his/her authority whether or not

such action is taking place now or was done in the past. In case it is a fraud or corruption, the

Company shall not be responsible for any loss incurred and will demand all expenses resulting from

defending such a case from the corrupted or fraudulent directors or executive officers.


Page 101

1.6. Business Ethics and Corporate Governance Policy

Corporate Governance Policy

To enable Ratchaburi Electricity Generating HoldingPublic Company Limited to

maintain international operational standards that earn recognition and confidence from shareholders,

investors and stakeholders, the Company remains committed to operating the business with

responsibility, fair treatment to all stakeholders, operational transparency, quality information

disclosure, short and long term added value creation and promotion of quality operations, ethics of

executives and employees, and responsibility towards the society and environment. The Company

has adopted the corporate governance principle for listed companies on the Stock Exchange of

Thailand as the framework to ensure the Company has efficiency and ethical practice in its

management. The Company also operated its business in parallel to demonstrating its responsibility

towards the society, surrounding communities and the environment, which are the basis for

sustainable expansion. The “Corporate Governance Policy” was prepared in writing and implemented

since 2003 with regular annual review to ensure that it best addresses the current situation.

The Company also announced other policies to ensure guidelines for proper treatment

of all stakeholder groups. Some of the policies are the risk management, shareholders, employees,

social and environment, computer and network usage policies, occupational health and safety,

workplace environment and the 5S policy. (All are published on the Company’s website.) The

Company also studied how to prepare itself for the upcoming ASEAN Economic Community

integration (AEC). Rules and regulations on listed companies in ASEAN will be later adjusted to be in

the same standard across the region.

Business Ethics

Business Ethics have been written to provide framework for desired behaviors of the

Company, its Management and employees towards its creditors, partners, competitors, community

and society, government and the environment. The Board of Directors has prepared the Business

Ethics in writing and has implemented it since the Company’s inception in 2000. The Business Ethics

comprises three documents including the Code of Conduct, Executive Ethics and Employee Ethics.

The Company has regularly reviewed the Business Ethics to address the constantly changing

environment while supporting the Company’s vision, mission and policy as well as the Company’s

sustainable growth. (The three documents are published on the Company’s website.)

Communications and Monitoring of Performance to Ensure Full Compliance with

the Corporate Governance and Business Ethics Policies

Every new Director and employee will receive ethics and policies as part of their

orientation kit which will be used as guideline and reference when performing their duties. All

employees and directors have to sign on the document to increase awareness, acknowledge their

responsibility and reinforce their commitment to respect the Company’s policies and ethics. Good

corporate governance policy has been communicated by the Board of Directors and the management


Page 102

to all employees. The Company also provides for communication channel to listen to and collect

employees’ problems, concerns and recommendations for consideration, further action planning and

execution as well as ensures the corporate governance practice implementation is in line with the

good corporate governance principle. Various channels, including the Intranet, email system that

employees have easy access and internal meetings, are provided to effectively communicate and

disseminate the Company’s policy and corporate governance news to employees.

The Internal Audit Department, in addition to regular meetings with all units, is

responsible for monitoring and following up with the implementation of corporate governance policy by

preparing annual audit plan and a quarterly review report as well as making recommendation on

solution and prevention of possible damages.

The “Compliance Database” was prepared, and distributed to the Board of Directors

and published on the Company’s internal database which is easily accessible for use by all

employees. The database comprises guidelines for important areas of practice and operations of the

Company as a listed company, such as the disclosure of information connected transaction, the

acquisition or sell-off of assets. The information is regularly updated.

The Board of Directors prepared the “Report of Directors’ and Executives’ Interests”

and instructed the Directors and executives to report their and related persons’ interests to the

Company Secretary for reference and record. The Company Secretary shall make a copy and submit

the report to the Chairman of the Board of Directors and the Chairman of the Audit Committee,

according to the Securities and Exchange Act. The report will be used when considering who shall not

have voting rights in the Board of Directors’ and shareholders’ meetings.

Core Value

To achieve sustainable success and maintain leading position in the market, the

Company believes that business ethics is a very important area, in addition operational commitment,

technology advancement, management excellence and corporate governance. The Company,

therefore, strongly values ethical practice and integrity which also means not involving in any direct or

indirect fraudulent action while maintaining the Company’s confidentiality, benefits and assets;

provides true and correct information; and respects and complies with the Company’s rules and

regulations. The development in this area started from the formulation and preparing in writing the

Corporate Governance and Business Ethics, which are used as guidelines for the Board of Directors,

the Management and employees. The Core Value that supports the Company’s expansion under the

changing business plan are Reliability, Accountability, Trust, Challenge and Happiness.

1.7. Committees

The Audit Committee

The Audit Committee was appointed by the Company’s Board of Directors and their

term is three years. The committee members have the required knowledge, experience and

qualifications as designated by the SEC and the SET. The Committee members are Captain Siridech


Page 103

Julpema who is the chairman of the committee, Mr. Satit Rungkasiri, Mr. Chavalit Pichalai and Miss

Piyathida Praditbatuga are the members. (The four members are Independent Directors who have the

knowledge and ability in auditing the Company’s operations and financial statements.) Mr. Pornchai

Chamnongdet, Vice President - Head of the Internal Audit Division, acts as the committee’s secretary.

The Committee report directly to the Board of Directors. Its major duty and

responsibility as assigned by the Board of Directors and that are in line with the rules and regulations

of the SEC and the SET. Its duties include reviewing and ensuring that the Company has accurate

and adequate financial reports; reviewing and making sure the Company has an appropriate and

effective internal control system; reviewing and ensuring that the Company complies with laws on

securities and exchange, and the SET’s rules and regulations and other laws relating to the

Company’s business; selecting and nominating independent persons to be the auditors of the

Company and recommending the auditor’s fee, and attending at least one meeting per year with the

auditors without presence of the Management; reviewing connected transaction or items that may

have conflict of interest based on existing laws and the SET’s rules and regulations; preparing the

Audit Committee’s report to be published in the annual report; reviewing the Internal Audit Division’s

performance; considering and reviewing audit criteria and process to ensure that they always comply

with current business environment; and summarizing and reporting the Audit Committee’s tasks and

movement to the Board of Directors; reporting issues discovered or in doubt, which may have

significant impact on the Company’s financial status or operating performance, to the Board of

Directors in order to correct it within the time frame agreed by the Audit Committee. (The Company

publishes the duty and responsibilities of the Audit Committee in the Company’s regulation on the

Audit Committee and on the Company’s website.)

Human Resources and Remuneration Committee

The Human Resources and Remuneration Committee’s term is three years. It consists

of three directors who are appointed by the Board of Directors. The committee members are Mr.

Songpope Polachan, who acts as the Committee’s chairman, Mr. Poonsuk Tochanakarn and Miss

Rattana Tripipatkul are committee members. Mr. Prayut Thongsuwan, Executive Vice President -

Corporate Administration, acts as the Committee’s secretary.

The Human Resources and Remuneration Committee reports directly to the Board of

Directors. Its authorities and responsibilities as assigned by the Board of Directors cover the entire

tasks concerning the management of human resources and remuneration of the Board of Directors,

committee and top executives of the Company’s Group (meaning the Chief Executive Officer, Chief

Officers and Executive Vice President). Its tasks include formulating the visions and strategies on

human resources management of the Company’s Group as well as their management development

plan; reviewing and ensuring that the Board of Directors of the Company’s Group has appropriate size

and good components responsively to the changing environment; and formulating appropriate policy,

criteria and procedure in nominating, selecting, removing or terminating Directors; establishing the

clear, transparent and top management of the Company’s Group to ensure that all companies in the

Company’s Group have management team who have appropriate qualifications, knowledge,


Page 104

competency and experiences to run the group of the Company’s business successfully and

effectively. The Committee is also responsible for selecting and nominating persons with required

qualifications to be the directors and top executives of the Company’s Group; and preparing

succession plan for key executive posts. It establishes a policy and strategies and compensation

which include salary, meeting allowance, per diem, bonus and other benefits to Directors and top

executives in the Company’s Group before proposing them to the Board of Directors for further

approval. Consideration and approval will be based on clear and transparent criteria in order to

induce, retain and motivate highly qualified and high potential human resources. The Committee at

the same time formulates effective guidelines, criteria, procedures and process for assessing the

performance of the Board of Directors and top executives of the Company against the target mutually

agreed in advance each year. These targets shall be relevant to the Company’s business plan and

set up in order to review the Management’s annual remunerations by taking duties, responsibilities,

related risks and long term values to shareholders into consideration. The Committee ensures that

policy related to remuneration as well as amount of remunerations for the Board of Directors and top

executives are disclosed in the Company’s annual report. (The Company publishes the duty and

responsibilities of the Human Resources and Remuneration Committee in the Company’s regulation

on the Human Resources Management and Remuneration Committee and on the Company’s

website.)

Risk Management Committee

The Risk Management Committee’s term is three years. Appointed by the Board of

Directors, the Committee members include Police Lieutenant General Thavorn Chanyim as the

Committee’s chairman, Mr. Suwit Kongsaengbhak and Mr. Rum Herabat are members. Mr. Sutheep

Thamrujee, Senior Vice President - Head of Corporate Planning Division acts as the Committee’s

secretary.

The Committee reports directly to the Board of Directors and performs its tasks as

assigned by the Board of Directors. Its responsibilities include reviewing the Company’s risk

management policy and framework, which would cover all the major risks, namely financial,

investment and corporate reputation risks before proposing them to the Board of Directors for

approval, and formulating risk management strategies and framework in compliance with the

Company’s risk management policy. The Committee shall assess, monitor and control the impact of

risk at the appropriate level, The Committee monitors and ensures that risk management activities are

in line with the Company’s policy and framework approved by the Board of Directors; reviews the

sufficiency and effectiveness of risk management policy and system; and reports regularly to the

Board of Directors about the management, operation, risk status, changes and areas of improvement

to keep risk management in line with the Company’s policy and strategy. (The scope of

responsibilities of the Risk Management Committee is included in the Company’s regulations on the

Risk Management Committee and published on the Company’s website.)


Page 105

Risk Management Working Group

The “Risk Management Working Group” was appointed by the Risk Management

Committee. Chief Asset Management Officer is the Working Group Chairman. Executives from all

disciplines are members while the Assistant Vice President - Corporate Planning Division acts as the

secretary. The working group is mainly responsible for identifying nature of risks and risk factors,

studying and analyzing internal and external factors that may affect the Company’s operations,

monitoring and studying risk management activities are in line with the guideline approved by the Risk

Management Committee; and preparing the report on the Company’s risk management for the Board

of Directors’ acknowledgement every quarter.

Strategic Plan Management Team The Strategic Plan Management Team is appointed by the Chief Executive Officer. It

comprises the Chief Officer of all disciplines and Executive Vice President - Corporate Administration

as the member. The Chief Executive Officer acts as the chairman of the committee while the Senior

Vice President - Head of Corporate Planning Division is the secretary to the team. The Strategic Plan

Management Team is responsible for screening policy and strategic plan management to ensure that

they correspond to the Company’s goal and address current situation, formulating strategies,

reviewing the sufficiency of policy and strategic plan management system to ensure the system

effectiveness and effective implementation, appointing the Strategic Plan Working Group, supervising

and monitoring the implementation of strategic plan policy, and reviewing the analysis and

assessment of the strategic plan proposed by the Working Group.

Strategic Plan Working Group The strategic Plan Working Group comprises executives from all disciplines as assigned

by the Chief Officer of each discipline and Chief Asset Management Officer as members. Assistant

Vice President - Corporate Planning Division acts as the secretary to the Working Group. It is

responsible for following up, collecting and analyzing information on each project to assess strategic

plans and report to the Strategic Plan Management Team on quarterly basis.

Investment Committee

The Board of Directors appointed the Investment Committee and the term is three years.

The Investment Committee members consist of Mr. Kurujit Nakornthap as the Committee’s chairman,

and Mr. Rum Herabat as the member. Mr. Peerawat Pumthong, Chief Business Development Officer-

1, acts as the Committee’s secretary.

The Committee reports directly to the Board of Directors with responsibilities as assigned

by the Board of Directors. Its major responsibilities include determining strategic plan, goal,

investment plan, investment budget, optimum investment return and other benefits from project

investment to increase the Company’s power generating capacity and growth; carefully reviewing and

scrutinizing project investment proposed by the Management to ensure that it is consistent with the

Company’s policy and target stated in its investment plan with the consideration on cost-effective

investment return and on management of other risk factors at acceptable level; and monitoring,


Page 106

following up and evaluating the approved investment project and report to the Board of Directors.

(The scope of responsibilities of the Investment Committee is included in the Company’s regulations

on the Investment Committee and published on the Company’s website.)

Corporate Governance and Social Responsibility Committee

The Board of Directors appoints the Corporate Governance and Social Responsibility

Committee and the term is three years. The Corporate Governance and Social Responsibility

Committee members comprises Mr. Satit Rungkasiri and Mr. Poonsuk Tochanakarn. Mrs. Boontiva

Dansamasatid, Executive Vice President acts as the Committee’s secretary.

The Corporate Governance and Social Responsibility Committee reports directly to the

Board of Directors. Its major responsibilities as assigned by the Baord of Directors are considering

policies, strategies, goal, guidelines and plan regarding the Company’s corporate governance and

social responsibility; encouraging the Board of Directors, Management and employees to participate

in corporate governance and social responsibility activities; monitoring that policies and regulations

related to corporate governance and social responsibilities are practiced; reporting all corporate

governance and social responsibilities task to the Board of Directors; and reviewing and revising

policies and guidelines on corporate and social responsibilities if needed, and propose to the Board of

Directors for consideration to ensure that the policies and guidelines are up to date. (The scope of

responsibilities of the Corporate Governance and Social Responsibility Committee is included in the

Company’s regulations on the Investment Committee and published on the Company’s website.)

Authorized Directors as the Company’s Signatory

According to the Company’s policy and in order to provide practical flexibility and

independence of independent directors, the authorized directors as the Company’ signatory are either

the Chairman of the Board of Directors or Chief Executive Officer (CEO), with signature and the

Company’s Seal; or two other directors, except Independent Directors, with joint signatures and the

Company’s Seal. (Investors can study details from the Company’s Affidavit registered with the

Department of Business Development, Ministry of Commerce, as published on the Company’s

website.)

1.8. Policy on Appointing Directors and Executives to be Directors and the

Management of Subsidiaries and Jointly-Controlled Entities

To ensure that the Management and supervision of all subsidiaries and companies

within the Company’s Group (information are detailed in the General Information section) are in line

with the Company’s policy and to effectively monitor and assess operational performance of the

subsidiaries and jointly-controlled entities, the Company has a policy to appoint its directors and

executives to be directors and/or executives in those companies. The appointment is approved by the

Board of Directors and those directors have the responsibilities as stated in the Company’s

regulations on subsidiaries and jointly-controlled entities supervision.


Page 107

1.9. Recruitment and Nomination Procedures of Directors and Top Executives

Independent Directors

The Company has clearly defined “Independent Director” in the Company’s regulation on

the Board of Directors that is published on the Company’s website. The definition is in compliance

with the Capital Market Supervisory Board, including no participation in business management; no

relationship, by family or by law; no business relations with the Company and its subsidiaries in a

manner that may cause conflict of interest; not being the auditor or professional service provider,

including legal or financial advisors; and no relations with the major shareholders and no other

condition that prevent them from providing independent opinion on the Company’s operations. The

Company’s regulation on shareholding of the Company’s shares is stricter than that regulated by the

Capital Market Supervisory Board. Under the Company’s regulation, an Independent Director can

hold no more than 0.5 per cent of the total shares with voting rights of the Company, subsidiaries and

joint ventures or other legal entity that may have conflict of interest while the Capital Market

Supervisory allows up to one per cent of the total shares.

To recruit an Independent Director, the Company follows the recruitment and nomination

procedures of directors, the details of which are described under the same topic. On 31 December

2014, the Company has eight Independent Directors (53.3 per cent) which accounts for more than

one third of the total members (15) of directors. They are Captain Siridech Julpema, Mr. Songpope

Polachan, Police Lieutenant General Thavorn Chanyim, Mr. Satit Rungkasiri, Mr. Chavalit Pichalai,

Miss Piyathida Praditbatuga, Miss Rattana Tripipatkul and Mr. Suwit Kongsaengbhak.

Recruitment and Nomination Procedures of Directors

To enabling the Board of Directors to efficiently and effectively perform their duties and

supervise overall business operations and enhance their willingness to contribute time and efforts to

their designated missions that will strengthen the Board of Directors, the Company gives high

importance to the nomination and recruitment. This is to ensure the best benefits of the Company

regarding policy formulation and regulating the management and operations. Qualifications of

Directors and Independent Directors are specified in accordance with the Company’s Articles of

Association, legal requirements, and regulations set by related regulating agencies. The Company

also considers educational background, training, work experience, specialized areas and skills that

best correspond to the Company’s business.

The Human Resources and Remuneration Committee is responsible for selecting,

recruiting and screening nominees for the Board of Directors’ consideration. Directors’ appointment

includes 2 cases as follows:

Case 1 - A director position is vacant due to reasons other than rotation of office: The

Board of Directors has the authority to elect any persons to replace the resigned Directors. The

Director so appointed shall retain his/her office during such time only as the resigned Director is

entitled to retain. Approval of no less than three fourths of the remaining Directors is required for this

case.


Page 108

Case 2 - A Director position is vacant due to rotation of office: The Board of Directors

shall propose to the shareholders’ meeting. Criteria and process are specified in the Company’s

Articles of Association.

Committed to equal treatment of shareholders, the Board of Directors encourages

minority shareholders to nominate a person with proper qualifications for the Board to consider and

propose to the shareholders’ annual general meeting. This practice has been implemented since

2008. Details are specified in the Good Corporate Governance Report section.

Recruitment and Nomination Procedures of Top Executives

“Top Executive” means a person who holds the position of Chief Executive Officer, Senior

Executive Vice President and Executive Vice President.

In appointing the Management, the Company considers the nominee’s educational

background, knowledge, skills and work experiences, which should benefit their designated missions

and the Company’s overall operations to support the Company’s group efficiency, effectiveness and

growth. The Human Resources and Remuneration Committee is assigned to recruit the top

executives of the Company’s Group and propose to the Board of Director for appointment.

Directors representing the major shareholders, EGAT, which has the right to nominate

directors according to its shareholding, has been appointed after the same selection procedure. The

nomination is submitted to the Human Resources and Remuneration Committee for consideration and

screening prior to the Board of Directors’ consideration and /or the shareholders’ meeting

consideration according to the proper selection procedure. Background and qualifications that are

proper and necessary in governing the Company’s business are taken into consideration. This also

applies to the CEO, who is EGAT’s top executive and seconded to work at the Company.

10. Social Responsibilitiy This year the company faced a supply shortage of natural gas from Myanmar, which is the

primary fuel of three power plants, namely Ratchaburi, Ratchaburi Power, and Tri Energy, with a

combined installed capacity of 5,754 MW, causing from their four shut down including the regular

maintenance plan. All three represent power generation sources supporting power security in the

Central Region and the South. To ease the situation, we managed the fueling efficiency of all plants:

for the thermal power plant to be prepared for bunker oil usage, and for the combined-cycle power

plant to be prepared for diesel usage. We also reserved fuels for contingencies in case the National

Control Center of EGAT needs them. At the same time, we postponed our planned plant maintenance

shutdown during the critical period. As a result of all these moves, Thailand’s electricity system

proved stable enough for the economy and the public to stay intact.

Fully recognizing the environmental concerns of our neighboring communities when we need

to fuel power generation with liquid fuels during such a period, we kept a close watch on the efficiency

of environmental quality management, notably the FGD efficiency in the thermal power plant, which


Page 109

achieved 97.3% efficiency. Officers of both plants also fostered an understanding among the

communities by alerting them of the plans to use liquid fuels and the appearances of smoke resulting

from their combustion. Further, the measured values of pollutants during such periods were found to

be within the limits required by law, and the communities expressed due appreciation of our situation

and the necessity.

Global climate change is a risk challenging the company’s future growth and sustainability,

most likely leading to the shortages of water (a vital factor for power generation); flooding affecting

power generation; various countries’ enforcement of laws, regulations, and taxation to set goals for

greenhouse gas emissions under the obligations of the Kyoto Protocol; and public resistance to coal-

fired power plants. The company’s twin management approaches of such risks consist of, first,

increasing the goals under renewable energy projects with an emphasis on solar power, wind energy,

biomass, and refuse derived fuel, and second, setting goals for greater reduction of greenhouse gas

volumes in managing and preserving forest areas as carbon dioxide trapping sources.

In running our businesses, we have remained committed to good corporate governance. All

our activities must be based on morality, ethics, integrity, and responsibility. This year we declared

our intention to join the Thailand Private Sector Collective Action Coalition against Corruption (CAC),

recognizing that corruption not only poses obstacles and threats to our sustainability, but also harms

the economy and society in the long term. Our stewardship of neighboring communities is ongoing.

Besides controlling and preventing impacts of our businesses, we supported and promoted the quality

of lives in various ways. This year our power plants, consisting of the company’s plant, Tri Energy

Power Plant, Ratchaburi Power Company’s Power Plant, Ratchaburi World Cogeneration, and

renewable energy power plant sponsored over 226 million baht going to the Power Plant

Development Fund.

As for our stewardship of employees, our most precious resources, this year we focused on

work safety, occupational health, and work environment, setting goals of zero accident at all sites,

including Head Office. To cultivate employees’ awareness that accidents are preventable if they are

serious about them and cultivate work safety habits, we staged training and assorted activities at

Head Office and our group’s power plants. To extend our efforts, we ensured that business partners,

community residents, and external parties that entered our office or power plants must observe our

goals. This year our Head Office, Ratchaburi Power Plant and Ratchaburi-Power successfully

accomplished zero-accident target, since no employee, contractor employee, or subcontractor

employee was injured while working there.

Looking ahead

We will continue to dedicate manpower and resources to drive our strategic plans toward our

goal: To be a leading value-oriented integrated energy company in Asia-Pacific. Next year, our goal

for enterprise value is 133 billion baht. Our new strategic plan approach will be retained: Focus on

investment expansion for major core fuel project and renewable-energy projects abroad; prepare for a

new domestic IPP bidding round; establish a downstream business platform; extend cooperation with


Page 110

partners and seek new partners to grow business abroad; squeeze efficiency out of the quality of

assets and finance; upgrade personnel caliber so that they may become smart and noble; and

promote a corporate culture that is deep-rooted in good governance. As for the anti-corruption aspect,

we are upgrading our preventive and audit systems to meet international standards and plan to

undergo assessment by CAC within two years.

One of our major missions is to administer climate change. This task will accompany

corporate growth; management of greenhouse gases through capacity increase associated with

renewable energy; and reduction of carbon dioxide emission (direct and indirect). Improvement of

activities and goals in line with the public sector and international practices will be our norm. Next

year, Ratchaburi Power Plant plans to join a pilot project of Thailand Voluntary Emission Trading

Scheme, organized by the Thailand Greenhouse Gas Management Organization (Public

Organization).

Over the past 15 years, Ratchaburi Electricity Generating Holding PCL. has been confident in

its full commitment and responsibility to all parties. We have relentlessly addressed communities’

needs while exerting our stewardship of the environment, for these approaches would lead us toward

genuine sustainability. On behalf of the Board, executives, and employees, I sincerely wish to thank

all sectors for their excellent support to and encouragement of the company’s growth and security.

1.1. Reporting Approach

This 2014 edition of the sustainability report of Ratchaburi Electricity Generating

Holding PCL. (“the company”) publicizes the policies, strategies, operating approach, and

performance for its key economic, social, and environmental sustainability for its stakeholders.

Spanning business performance from January 1 to December 31, 2014, this issue is the second

report, prepared under the Global Reporting Initiative (GRI) guidelines version 4.0 (G4).

This report aligns with the approach taken by GRI G4 (Core Level) and the methods to

evaluate the calculation and hypothesis used for estimate data will be presented in the topic relating

to the said data, without repeating data of last year.

Here is the procedure for the determination of contents:

Step 1 : Identification

Identify key sustainability aspects to business strategies or aspects of value to

stakeholders, while reviewingthe sustainability aspects of the power industry.

The company groups stakeholders by reviewing their relevance to its mission, goals,

strategies, and values, as well as those affected positively and negatively by its business, and those

interested in its business operation, into 11 groups, with its own process for forging engagement and

echoing each group’s expectations:


Page 111


Page 112


Page 113

Step 2 : Prioritization

The company has to prioritize aspects with due regard for effects on stakeholders’

assessment and decision-making together with economic, social, and environmental significance to

its business. Corporate units and data-supplying units are also responsible for reviewing and

prioritizing such aspects.

Step 3 : Validation

Corporate units preparing the report are in charge of aspect validation to ensure the

completeness in line with the principles of report quality identification.

Step 4 : Review

Stakeholder interviews take place after this report’s publicity so that their views may be

applied to content revision for subsequent editions to address aspects of stakeholders’ expectations

and interest.


Page 114


Page 115

1.2. Environment Responsibility

1. Greenhouse Gas Management

Placing emphasis on mitigating greenhouse gas emission, the company assesses

volume of greenhouse gas released from operation of the company group and determines long-term

target of greenhouse gas reduction expecting to finish by 2015.

In 2014, the company’s three main power plants; Ratchaburi Power Plant,

Ratchaburi-Power and Tri Energy fired 192,573 million cubic feet of natural gas, 86.1 million liter of

bunker oil and 16.7 million liter of diesel in generating electricity of 22.9 million MWh. The generating

process emitted 11.3 million tCO2e of greenhouse gas equivalent to greenhouse gas intensity of

0.495 tCO2e per MWh.


Page 116

2. Greenhouse Gas Emission Reduction

Greenhouse gas reduction initiatives were continuously carried out. The emphasis

is placed on enhancing operation efficiency and saving energy in the power plants. Ratchaburi Power

Plant, a main power generation source of the company group, formulates a five-year energy

conservation plan (2013-2017) at target of 1,192 MWh. At the end of the plan in 2017, accumulated

energy volume from the plant’s initiative each year was projected to 3,576 MWh. In 2014, the plant

achieved beyond its energy efficiency target at 715 MWh with actual energy saved of 4,881 MWh

resulting from the generation efficiency improvement and energy consumption reduction.

Generation Efficiency Improvement

In 2014, the company group implemented generation efficiency improvement and

enabled to save energy of 4,652 MWh, indicating cost reduction of 9,768,702 baht and the greenhouse

gas reduction of 2,425 tCO2e. The significant efficiency improvement in 2014 includes:

Enhancement of Steam Turbine Cycle

The steam turbine cycle efficiency enhancement was implemented for Ratchaburi

Thermal Power Plant unit 1 and 2 by operating full scale of 20 cooling tower fans during 24.00-08.00 hours

in order to maintain appropriate temperature in the cooling tower basin. It successfully reduces heat of

6,785,023 MJ per year, resulting to energy saving of 1,885 MWh per years, greenhouse gas reduction of

983 tCO2e and cost reduction of 5,600,000 baht per year.

Fuel saving Project

The initiative was conducted for Ratchaburi Thermal Power Plant unit 1 by transferring

source of steam from Thermal Power Plant Unit 2 to Combined Cycle Power Plant block 1-3 which

produced much heated steam. At the result, thermal power plant Unit 1 not only stabilized its warm

condition, but also decreased steam production of 1,000 tons, equal to energy saving of 1,343 MWh per

year, greenhouse gas reduction of 700 tCO2e, and cost reduction of 1,375,032 million baht per year.

Energy Saving from Change of Sampling Point

This project is to save energy by changing the sampling point for measuring water

quality. The sampling point is changed to 200 MW. in operation, from the previous sampling point of 300

MW. Then, the electricity consumption decreased by 240 MWh, equal to the greenhouse gas reduction of

125 tCO2e or cost reduction of 693,000 bath per each start up.

Power Saving Campaigns

Power Saving in the Power Plants

In 2014, the company group undertook many projects and was able to reduce the

electricity consumption of 15,960 KWh, equivalent to greenhouse gas reduction of 1,334 tCO2e:

1) Road Lighting Luminaire Changing Project: For the area around Ratchaburi

Power Plant, the HID 250W lighting luminaires were replaced with LED 100W lighting luminaires


Page 117

which led to the cost reduction of 1,444,422 baht per year and greenhouse gas reduction of 254

tCO2e per year.

2) Air-conditioner System Improvement for the headquarter’s building: This

initiative can save power of 120 MWh, leading to cost reduction of 300,000 baht per year and

greenhouse gas decrease of 70 tCO2e per year.

3) Lighting System Improvement: The HPS 1000 W and HPS 250W light bulbs at

gas steam turbine compartment and entrance of Ratchaburi-Power Power Plant were replaced with

LED light bulbs which can reduce electricity of 671 MWh per year, demonstrating to cost reduction of

2,927,716 baht per year, and greenhouse gas lessen of 390 tCO2e per year.

Energy Saving at Head Office

Organized power efficiency campaign aims to lessen electricity consumption and

office supply usage by 10% compared to 2013 performance. Employees were encouraged to learn

more about ways of energy and resource utilization in their work process. To this end, the company’s

electricity and water consumption decreased by 571 MWh and 5,105 cubic meters, lower 21% and

19% from 2013 respectively. It indicates greenhouse gas reduction of 332 tCO2e and administration

expenses lower by 1.98 million baht in 2014. This reflects to our achievement in resource and energy

saving at target of 10% from 2013. The implemented program included Green Office project and MEA

Energy Saving Building program.

Power Generation from Renewable Energy

In 2014, the company’s capacity of renewable projects in and outside Thailand

totaled 143.45 MW, reducing oil consumption of 76.4 million liter per year, and greenhouse gas of

226,029 tons tCO2e. The company targets to increase renewable capacity domestically and

internationally to 500 MW by 2017.

Reduction of Trade Partner’s Greenhouse Gas

Determined to reduce indirect greenhouse gas, the company prefers joining hands

with trade partners that operate business concerning environment responsibility policy since 2013. It

applies to green procurement as realizing that it will help relieve environmental impacts and climate

change.

The company mostly procures spare parts and equipment of power plants from

world-class manufacturers who committed to environment care and social responsibility. Products and

services certified by environmental management standard are also selected. This method helps the

company reduce indirect greenhouse gas and support green procurement target of 25% by 2017.

Promotion of Greenhouse Gas Emission in Local Communities

The expansion of community energy project under the collaboration of the company

and Provincial Energy Office aims to support energy efficient appliances, such as energy saving light

bulbs and high-efficient stove which started in 2011 at Tharab Sub-district, Muang District; Ban

Singha Sub-district, Bodharam District, Ratchaburi Province as well as community forest in the


Page 118

province. In 2014, this project is expanded to another three sundistricts including Nam Phu Sub-

district, Muang District, Ratchaburi; Thamai Ruak Sub-district, Tha Yang District, Phetchaburi

province and Nong Rong Sub-district, Phanom Thuan District, Kanchanaburi province, with energy

saving target of 5% of each location.

The project offers 242 appliances for 234 households and 8 vocational groups. For

Ban Singha Sub-district, Tharab Sub-district and community forest, there were 46 appliances offered,

which can reduce heating value of 708,175 MJ per year from biogas use, efficient wood-burning stove

and high heating stove. Greenhouse gas reduction of 76 tCO2e resulted from energy saving and less

LPG consumption. The efforts enabled cost reduction of 38,880 baht per year. Progress of three new

locations is under data collection of community energy consumption, which is expected to be finished

in 2015.

Foster Awareness for Behavioral Change

For increasing awareness and encouraging the behavioral change in energy and

natural resource utilization to alleviate the climate change, the company organized many programs for

employees and stakeholders, such as youth camps and community forest leader network seminar

under the project of “Love the Forest and the Community”. This environmental care project help

create understanding toward the use of energy and natural resource as well as increasing the

participation of the youth and forest community leaders in forest conservation for enlarging carbon

sink.

After the activity, 326 employees, youth and community forest leaders have a good

understanding toward the proper utilization of energy and natural resource. Aside from changing

behavior relating to the use of energy and natural resource, 63% of youth participating in Klayim youth

camps implemented their brainstormed environment care initiatives in their community, such as

mangrove plantation and waste separation for recycle which will help reduce the greenhouse gas

emission and enlarge the carbon sink.

3. Increase in Carbon Sink

In addition to direct and indirect efforts to reduce greenhouse gas, the company

also promotes a project to continuously enlarge the carbon sink or carbon offset. The project

implemented in power plants included effort to enlarge green area in vacant area. Meanwhile, other

projects operate outside the power plants were the “Love the Forest and Community” Project, activity

to strengthen community forests in Ratchaburi province, a project of planting trees in upstream forests

to create carbon sink area in Nan of 138,749 rai enabling to store carbon of 277,498 tCO2e.

4. Long-term Greenhouse Gas Reduction Plan by Power Plant

In 2014, the company starts development of long-term greenhouse gas reduction

plan for fossil fuel-fired power plants (99.99% shareholding) introduced by Ratchaburi Power Plant

and Tri Energy. It is under studying relevant data in order to assess the plant’s reduction capability of


Page 119

greenhouse gas and link the target into the company’s strategy plan. This effort is expected to be

finished in 2015.

In addition, Ratchaburi Power Plant participates in Thailand Voluntary Emission

Trading Scheme (T-VETS) organized by Thailand Greenhouse Gas Management Organization (TGO)

in collaboration with Chula Unisearch, Chulalongkorn University. Under the scheme, the plant will

apply Measurement, Reporting, and Verification System (MRV) and operational regulations of T-

VETS for reviewing its greenhouse gas management. This participation is in line with the company

group’s long-term greenhouse gas management goal and reflects the company’s commitment in

supporting the greenhouse gas reduction plan of the country under United Nations Framework

Convention on Climate Change (UNFCCC). Thailand has implemented greenhouse gas reduction to

reach specified goal in 2020 onwards.

5. Risks and Opportunity from Climate Change

Climate change is a cause of natural disaster, particularly flooding and drought that

are now intensified, with greater impacts to life quality and environment. The company realizes and

takes into account the said issues as a part of risk management to prevent any impact to business

operation. For the power plant development, the company normally assesses environmental and

social impacts in all dimensions as well as designing project to cope with natural disasters, such as

flooding, drought and earthquake in order to maintain distribution availability and prevent financial

damages.

In 2014, the Risk Management Committee took climate change issue into

consideration, particularly for new project development and advising measures to prevent problems

for commercial operated power plants. The company also tailored risk management guidelines for

each power plant in order to prevent climate change impacts that possibly affect future growth and

business sustainability.

Water Risk Management

The company continued to monitor the water situation and statistics of the raw

water source for its main power plants, including Mae Klong river basin in Thailand and Ngum river

basin in Lao PDR, with managing risk methodology described below:

Managing Flooding risk

The company assesses the risk factor since the project location selection through

studying geographical and historical data of the project location and potentiality for designing and

planning the project area. All power plants are required to build the drainage system around the

project location, raw water reservoir, storm drain pond as well as berm to prevent flooding around the

power plants. This are regarded as the corrective and preventive measures for lessening

environmental impacts as specified in EIA. According the massive flooding in 2011, the power plants

of the company groups located in central basin have already improved and added the preventive

measures.


Page 120

Commercial Operated Power Plants

Ratchaburi Power Plant and Ratchaburi-Power arranged a emergency plan manual

to cope with flooding. Relevant persons were trained and informed of their responsibility when facing

the incident in order to solving problem in effectively and timely manner. The drill was periodically

organized in order to enable the power generation continuity. In 2014, there was no incident affecting

the power generation.

Power Plant under construction

Two units of 117-MW Ratchaburi World Cogeneration located in Ratchaburi

industrial estate encounter flooding risk by studying and assessing impacts towards its operation and

business in 2013. It then installed underground and on ground flooding prevention system during April

and August 2014. Soil cement system was employed to prevent underground water, with pumping

system for flooding drainage. For the ground work, 2-meter levee was built to prevent flooding in the

project location. This levee was raised around 0.5 meter from the highest level of previous massive

flooding. Thus, levee’s height reaches 6.5 meters from sea level. The operational budget amounting

to 50 million baht was provided to support the power generation continuity as well as reduction of

flooding insurance cost. This prevention will also help enhance the confidence for stakeholders

towards the company group’s power generation.

Managing Drought Risk

According to the assessment of drought risk of power plants located in Ratchaburi,

it showed that water volume of Mae Klong River has no signal of shortage due to the abundance of

the upstream forest. The water volume is still able to support both community and agricultural sector

as usual. For hydroelectric power generation, the company employs the rule curve system in order to

cope with flooding and drought risk for efficient planning short- and long-term power generation plan

as per the PPA.

Commercial Operated Power Plants

For the power generation of Nam Ngum 2 Power Plant in Vientiane, Lao PDR, it

was found that the water volume was unstable and the operation may be affected by the drought.

According to PPA, it allows the plant to request for ceasing operation when the water volume is not

adequate for generating power (at the lowest rate required by PPA) and it can made requests 2 times

in advance throughout PPA. However, the power plant has implemented upstream water

management by jointing hands with Ministry of Energy and Mine, Lao PDR by specify an action plan

and budget as well as monitoring annual performance. This is regarded as the long-term water

shortage risk preventive measures.

Under Construction Power Plants

Lignite-fired 1,878 MW Hongsa Power Plant in Lao PDR that is under construction

currently proactively managed water shortage risk due to limitation of Nam Luek dam water volume of

16.4 million cubic meters slightly being risky to water conflict with community. As a result, the plant


Page 121

finds alternated supply of water source of 19 million-cubic meter Nam Khan Dam. Water will be

distributed by pumping system which was set up at the power plant construction stage. This water

source management is the collaboration with government sector which helps secure power

generation and prevent any impact for the community’s water consumption.

6. Environmental Footprint

On the part of environment and community responsibility, the company group

continues to put the best effort to maximize generation efficiency in order to minimize environmental

impacts. Realizing that the power generation generally involves the consumption of natural resources

and causes impacts to the environment and society overall even though electricity is generated for

serving national economic and social development, the company, then, pay seriously attention to fuel

combustion efficiency in order to manage air quality at legal accepted requirement. Water

management by optimizing raw water and treating quality of effluent before discharging to the

environment is also our priority. Meanwhile, waste management is carried out through reducing,

reusing and recycling, with an aim to achieve to zero hazardous waste to landfill.

The company’s power stations strictly comply with relevant environmental law and

regulations of every countries where operated and also implement environmental impact mitigation

and protection measures approved by relevant authorities. The facilities continuously conduct

environmental quality monitoring and report the performance to the said authorities as per the timeline

specified by laws. In 2014, the power plants of the company group in Thailand and outside completely

complied with relevant environmental law and regulations. Thus, there was no issue about legal

compliance and fines charged the company.

Responding to our mission of world-class operational excellence and environment

and social responsibility, the company group has employed environmental standards into operational

process with an aims to enhance efficiency and effectiveness of environmental quality management

system. This action eventually brings us confidence and acceptance of stakeholders domestically and

internationally. The standards implemented in the company group are following below:


Page 122

Environmental Quality Management at Power Plant

Fuel and water are essential materials for power generation. The main power plants of

the company group in Thailand, including Ratchaburi Power Plant, Tri Energy and Ratchaburi-Power,

with total equity capacity of 4,695 MW, use natural gas as primary fuel which imports from Yadana

and Yetagun fields in Republic of the Union of Myanmar. Meanwhile, bunker oil and diesel oil,

secondary fuel, were reserved for thermal power plant and combined-cycle power plant respectively.

Due to different type of power plants, environmental quality management measures are varied

particularly in air quality management.

Under the ultimate goal to generate electricity based on environment- friendly process

and resources utilization, each power plant has appointed the Environment Management Committee

and Environment Working Group to be responsible for supervising and monitoring plant’s operation

and maintenance, and assuring completeness of legal and the company’s rule compliance. Also,

mitigation measures of air emission, water and waste must be performed efficiently and effectively.

Air Emission and Waste Management Air Emission

The company group strictly controls air emission from power plant within the legal

accepted requirement. Pollutants arising from combustion process including nitrogen oxides, sulfur

dioxide and particulate matters are well managed by emission controlling system as described below.

Air Emission Prevention and Controlling Technology of Combined-Cycle Power Plant

Nitrogen Oxides (NOx) arisen from firing natural gas is minimized by the Dry

Low NOx burners. In case of diesel firing, a secondary fuel, the

demineralized water will be sprayed into the combustion compartment to

lower temperature at level that prevents occurrence of the oxidization of

nitrogen.


Page 123

Air Emission Prevention and Controlling Technology of Thermal Power Plant

The power plant’s combustion system equips with a Low NOx Burner and the

Flue Gases Re-circulation technology that ensures low nitrogen oxide

emission level.

The Flue Gas Desulfurization System (FGD) is installed when the bunker oil

are fired.

Air Quality Monitoring System

The power plants install the Continuous Emission Monitoring Systems

(CEMs) at all power stacks ensuring pollutants are controlled at legal

required level.

The power plant established five air quality monitoring stations equipped with

the Ambient Air Quality Monitoring Systems (AAQMs) at the community

surrounding Ratchaburi Power Plant and Ratchaburi-Power.

The emission prevention and controlling system as well as the air emission

monitoring system at all power plants was designed and installed at beginning of project development

and construction. The systems were regularly verified its exactness of data, and maintained as per

specified work plan. The said process helps assure the emission management efficiency and air

emission level within legal requirement. In cases of air emission abruptly higher than legal standard,

the alarm in the control room will alert the operators to recheck the said systems and then National

Control Center will be informed and asked for reducing power production or stop the operation until

the emission controlling system is recovered to operate efficiently and emission controlled at the legal

specified requirement.

In 2014, the average concentration of emission released from Ratchaburi Power

Plant was lower than minimum legal requirement according to the Ministry of Industry’s notification

(B.E. 2547). It resulted from natural gas mostly used for generation. In case of Ratchaburi Thermal

Power Plant’s generation by bunker oil, emission was controlled by Flue Gas Desulfurization System

(FGD) which is continuously maintains its SO2 removal efficiency at 97.3% (better than its installed

efficiency of 97.2%).

Waste Management

Placing emphasis on waste recycling for maximized environment and social benefits, the

company hires authorized waste management service providers following the recycling method specified

in the Ministry of Industry’s notification. The company closely surveillances waste disposal operation of the

hired service provider and its subcontractor at their places to ensure that waste was correctly and

appropriately managed according to specified disposal methods required by relevant law.

For garbage and recyclable waste, the local administration agency is hired to manage

them according to the sanitary standard. Gypsum waste from desulfurization process is disposed at the

power plant’s landfill site lining with High Density Polyethylene (HDPE) sheet at the bottom and then


Page 124

distributed to cement manufacturing’s suppliers later. Meanwhile, underground water around the landfill is

monitored and assessed every six months.

In 2014, the main power plants of the company produces total waste of 10,444 tons

including non-hazardous waste of 10,146 ton and hazardous waste of 298.21 tons divided into 297.8 tons

of recyclable hazardous waste and 0.41 tons of secured landfill. In 2015, the company aims to achieve

zero hazardous waste landfill.

Water Management

Water is a substantial material for power generation and water management is our

priority. The company works closely with the plant’s operator to observe water usage volume in

generation process. The company also puts the best effort to managing raw water supply insufficiency

and wastewater quality aiming to maintain power generation and business continuity. It seriously finds

ways to use less water in generating process in order to avoid water conflict with community and

discharge quality treated water to natural waterway to protect environmental impact.

Reduction of Water Usage in Power Generating Process

Realizing that high volume of water used in power generating may affect the water

consumption of community and ecology system, the company has closely monitored data of water usage

volume in power production process and assessed possible environmental impacts. Presently, it is found

that Ratchaburi Power Plant, Tri Energy and Ratchaburi-Power supply raw water from Mae Klong River,

with a quantity of 33.06 million cubic meters representing 1.2% of total water volume of the river. Due to

abundant water volume of the river, community is not affected from the plants’ consumption as well as

ecology system and the data shows that since 2001 water resource has been capable to support the

plants’ operation without any conflict with community.

The cooling system requires relatively high water quantity of up to 75% of the entire water

quantity required in production process. As a result, all power plants try to find way to use cooling water as

much as possible for reducing the use of natural water. To this end, the plants achieve target of 4-6 cycles

(for acidic system) and 3-4 cycles (for basic system) before discharging it to the holding pond. Also, the

ratio of water usage volume to the power generating capacity is another indicator leading the power plants

to research for new methods of water reuse and wastewater quality improvement for recycling at plants.

In 2014, volume of reused water using in the plants excepting to cooling system

increased to 973,702 cubic meters representing 3% of total raw water and higher than last year

performance at 2.8%. This initiative compliments to the plant’s power saving due to less water pumping

and wastewater discharge.

Effluent Quality Control and Treatment

Wastewater mainly outputs from electricity generation process and the sanitary. Most

volume of wastewater comes from process of heat exchange in cooling system. The type of wastewater is

treated by process of sedimentation and temperature lowering to environment level and managed its

quality control according to legal requirement before discharging to a natural waterway. This method is

able to minimize impacts toward biodiversity of public water resource. The wastewater outputs from the


Page 125

building is also well treated to reach the quality standard of legal requirement and then it was reused for

garden watering system. The quality of effluent at the key power plants in 2014 was higher permitted

standard stipulated by the Ministry of Industry and the Royal Irrigation Department.

Environmental Quality Management Recognition

Due to earnest environmental management, Ratchaburi Power Plant, Tri Energy Power

Plant, the bunker oil transmission project for Ratchaburi Thermal Power Plants unit 1 and 2 and RATCH

Group Building were recognized by “Outstanding Award” for Enterprise complying with EIA Monitoring

Awards 2014 which was organized by Office of Natural Resources and Environmental Policy and

Planning. In addition, Ratchaburi Power Plant, Tri Energy and Ratchaburi-Power were successfully

certified ISO14001 standard in 2002, 2003 and 2009 respectively and consecutively.

New Project Development and Environmental Stewardship

New project development is the key work plan driving the company to be a leading

value-oriented integrated energy company in Asia-Pacific. For power plant development, the company

has been strictly complied with the law, particularly quality of EIA arrangement that must be in line

with criteria, methods and regulations specified by relevant units. The stakeholder inclusiveness is

important mean to hear opinions and concerns about the company’s activities. Concerned

stakeholders include all parties around the project such as community member, educational

institutions, public health and religious organizations, local administration bodies, local academics,

non-profit organizations, local opinion leaders, vocational groups as well as national, regional and

local governmental agencies.

There are many channels provided to receive local opinions, such as a formal

meeting, focus group consultation, informal dialogue, interview and questionnaires. Emphasis is

placed on the project’s environmental, social and economic impacts as well as the mental impact.

Stakeholders strongly expect the company in preventing operational impact seriously and caring of

their concerns especially on air emission and water management. The company takes the said issue

into account for specifying the specification of power plant machinery and technology as well as

environmental quality control and prevention system that meet the world-class standard. The issue

concerned is also considered for formulating environmental impact prevention and mitigation

measures for the EIA report, such as specifying the number of water reusing cycle at cooling towers

in order to reduce water use from natural water resource preventing water conflict with the

community.

The economic and social impacts from the project are also important issues towards

the communities and stakeholders’ opinions, especially benefits generated to the community and local

people. Efforts to greater support local communities includes implantation of a community

development plan based on local needs, company registration in location of the project, local

employment and procurement as well as contribution to the power development funds according to

generation volume and types of fuel. Nevertheless, all measures must be accepted by relevant

stakeholders, thus supporting the success of new projects as specified in work plans.


Page 126

The EIA reports of new projects must be approved by the supervisory and local units

before asking for business license and starting project construction. All projects, during the

construction and operation period must be complied with the environmental impact prevention and

mitigation measures as well as the environment quality monitoring measures specified in the reports

until expiry of the project. For international projects, the company follows the said practices as basic

guideline and adjusts to suit the law and regulations of each country.

During the past five years, the EIA reports of six projects have been approved by the

relevant authorities:

1) 1,878-MW Hongsa Thermal Power Plant in Lao PDR

2) 234-MW Ratchaburi World Cogeneration Power Plant in Ratchaburi industrial

estate

3) Natural gas pipeline project for distribution to Ratchaburi World Cogeneration

Power Plant

4) 410-MW Xe-Pian Xe-Namnoy Hydroelectric Power Plant in Lao PDR

5) 132-MW Nava Nakhon Power Plant in Nava Nakhon industrial zone,

Pathumthani

6) Natural gas pipeline project for distribution to Nava Nakhon Power Plant

Environmental Impact Assessment

Ratchaburi World Cogeneration Power Plant

Most electricity from 234-MW Ratchaburi World Cogeneration Power Plant located in

Bodharam District, Ratchaburi Province will be distributed to EGAT. Meanwhile, remainder of electricity

and steam will directly distributed to customers in Ratchaburi industrial estate.

Two units of cogeneration power plant mainly use environment-friendly natural gas. Each

unit contains 2 units of gas turbine, 2 units of high pressure steam generator and a unit of steam turbine

generator.

The EIA of Ratchaburi World Cogeneration Power Plant was considered and approved

by the Office of Natural Resources and Environmental Policy and Planning on November 2012. The first

unit was commercially operated in November 2014 and the commercial operation of second unit is

scheduled in March 2015.

The abovementioned projects have strictly followed environmental impact prevention and

mitigation measures and the environmental quality monitoring measures, thus leading to smooth

construction and environmental quality management, such as air emission, wastewater, waste and noise

under the specific legal standard. Environmental quality monitoring report was arranged and biannually

submitted to relevant units. The report includes the project progress since the construction stage as well as

life quality development for local communities in order to creating the acceptance.


Page 127

11. Internal Control and Risk Management

Internal control is an ongoing process and an integral part in any activity. It is a process that an

organization has to create and embrace with support from the Board of Directors and employees at all

level. The main objective of internal control is to ensure confidence in operational, financial reporting and

compliance with applicable laws and regulations.

Considering internal control as very important, the Board of Director assigned the Audit

Committee to review, monitor and assess the sufficiency of the internal control system, ensuring

operational efficiency and effectiveness, quality and reliability of financial reports, compliance with

applicable laws, regulations and organization’s policy. The Internal Audit Division is responsible for

reviewing all activities of the entire Group, providing advices on internal control and conducting

assessment for internal control sufficiency to be reported to the Audit Committee on annual basis.

In 2014, the Audit Committee convened six meeting to discuss matters with the Management,

Auditors and the Internal Audit Division. The Audit Committee has fully respected related laws and scope

of responsibility laid out by the Board of Directors in the Company’s regulation on Audit Committee 2008.

So far, the Audit Committee has never received report or complaint from the Auditors on significant

problem in the internal control system.

At the Board of Directors’ meeting No. 13/2014 held on 19 December 2014, the Board of Directors

provided the same opinion towards the internal control system as the Audit Committee’s assessment. Key

essences are as follows:

1. Organization and Environment

Realizing the importance of internal control system, the Company has provided for the

environment supporting internal control efficiency. The Board of Directors has set clear and measurable

vision, mission and goal for used as guidelines for the Management and employees’ operation.

The Company has clearly set organizational structure, line of control, approval authority and

responsibility for different levels, as well as well-rounded Key Performance Indicators (KPI) that serves as

the Company’s operational performance monitoring and assessment tools.

The Company has clearly set Code of Ethics and good corporate governance practice for

employees to follow.

The Company sets regulations/order as the operational guideline, authority dissemination,

responsibility and details of operations, such as accounting, finance, budgeting, procurement, human

resources and investment management. The regulations have been used guideline to all employees and

covered punishment in case of regulation infringement.

2. Risk Assessment and Management

The Company has introduced ongoing risk assessment. Working Group (comprising top

executives from all disciplines) and Corporate Planning Division are responsible for the assessment,


Page 128

setting the objective of risk management, identifying risk factors, setting measures in managing and

controlling the risks to the acceptable level. The Committee coordinates with and holds meetings with

different disciplines on quarterly basis to appraise risk and possible impact after implementation of risk

management measures and present the report to the Risk Management Committee and the Board of

Directors on quarterly basis.

Details on risks, risk assessment and management are unveiled in the annual report under

Risk Factors section.

3. Control

Supervising the Management’s operation to ensure that the policy and direction set by the Board

of Directors have been well executed and responded, the Company has therefore provided for a control

system for accounting and finance, operation and supervision as follows:

Identifying scope of responsibility, authority and financial approval limit and cheque issuing

authority of different level of executives in writing as stated in the Company’s regulations/ order

Transactions that are considered as connected transaction must be approved by authorized

person who has no conflict of interest and must be screened by the Audit Committee based on the

Company’s benefit.

Regularly monitoring the Company’s Group’s performance, which is responsible by the

business group under the Deputy CEO. Business direction is set according to the Company’s regulation

on the supervision of subsidiaries, affiliates and joint ventures requiring the Board of Director to formulate

policy through the Company’s representatives who are seconded to be shareholders, directors or

management of those businesses. The Company’s representative are required to produce a report and

submit to the Board of Directors on quarterly basis.

4. Information Technology and Communications

The Company views that the information and communications system are important tools for

the Company’s operations. The Management has provided for efficient communications channels as

follows:

The Company sends meeting notice and related document to each committee prior to the

meeting date, providing them with sufficient time to study the information. Questions and concerns raised

at the meeting, answers, clarifications, opinions, notice and recommendations of each director on each

agenda are recorded. The meeting resolution is summarized in the meeting report for reference and audit.

The Company arranges separate meetings between the CEO and head of each disclpline

from director vice president level and above, on monthly basis to monitor the progress of work, solve

problems, provide significant information that is sufficient for operations and communicate with

management at all levels.

Financial and accounting executives in cooperation with the Auditors presenting

information to the Audit Committee for accounting review according to the changing generally accepted

accounting standard and international accounting standards.


Page 129

The Company also has in place effective storage of information, document, accounting

records, financial reports and significant documents in good order and group. As a result, the Company

has never been informed of significant problems related to document from the Auditors.

The Company provides for efficient internal communications through the Intranet and Lotus

Note, enabling all employees to have easy access to significant information elated to policy, regulations,

order and announcement.

The Company discloses significant information through SET’s channel and

www.ratch.co.th to allow outsiders, shareholders, investors and interested persons to have access to and

receive such information at all time.

5. Monitoring System

The Company sets goals for the strategic and business plans by setting goals and

indicators for all discipline. Operational performance is appraisal against the target. Difference between the

result and goals (if any) are thoroughly analyzed for preparation or solution for impact from such difference

before presented to the Board of Directors’ acknowledgement on quarterly basis.

The Internal Audit Department regularly reviews sufficiency and appropriateness of the

internal control system according to the annual audit plan approved by the Audit Committee. Results are

regularly updated and presented to the Audit Committee.


Page 130

The Audit Committee’s Report

The Audit Committee of Ratchaburi Electricity Generating Holding Public Company Limited

comprises 4 independent directors. Capt. Siridech Julpema is the Chairman of the Audit Committee.

Other committee members are Mr. Satit Rungkasiri, Mr. Chavalit Pichalai and Miss Piyathida

Praditbatuga. Mr. Pornchai Chamnongdet, Vice President-Head of Internal Audit Division acts as the

Committee’s secretary. According to the Board of Directors’ resolution No. 4/2014, Mr. Chavalit

Pichalai was appointed a Committee member replacing Miss. Rattana Tripipatkul effective on 22 April

2014.

All members of the Audit Committee have complete qualifications of Independent Directors

and Audit Committee members as stated in the Company’s Regulations on the Company’s Board of

Directors 2013 and the Company’s regulations on Audit Committee 2008. Both of which are compliant

with the regulations of the Securities and Exchange Commission and the Stock Exchange of

Thailand.

In 2014, the Audit Committee convened six meetings, including one meeting between the

Committee and auditors without the presence of the management representative. (Details on each

Committee member’s meeting attendance appeared in the Meeting Attendance Table in the

Management Structure Section.) The Audit Committee’s Report The Management of the Company

and its subsidiaries and the auditors participated in the meetings to present information, listen to

opinions and suggestions that are useful to the Company’s management. The results of each meeting

were presented to the Board of Directors of the Company and its subsidiaries for their

acknowledgement.

Significant activities of the Audit Committee in the past year are as follows :

Reviewing quarterly and annual financial statements of the Company and its subsidiaries

for their completeness, correctness and reliability prior to presentation to the board of directors of

each company

Considering the implementation of new accounting and financial reporting standards that

have been revised and contain conditions that can be applied to the Company’s operations, which

became effective from 2014, by working closely with the auditors

Reviewing internal control sufficiency to ensure efficiency and effectiveness in overall

operations, enabling the Company to achieve its goals

Ensuring that the Company fully conforms with Securities and Exchange Law, rules and

regulations of the Stock Exchange of Thailand, and laws related to the Company’s business

operations

Reviewing items that may involve conflict of interest and ensuring that they comply with

laws and regulations issued by the Capital Market Supervisory Board and related bodies. Connected

transactions or items that may involve conflict of interest were reported to the Audit Committee for


Page 131

approval before it was forwarded to the Board of Directors for consideration. The Company’s

management reported major transactions to the Board on quarterly basis.

Reviewing information on risk management system and having received the Risk

Committee’s report. Significant risks related to the Company’s business are reported in the Annual

Report.

Reviewing the internal audit activities by approving annual audit plan to ensure efficiency

and effectiveness, acknowledging the audit report, providing opinions on effective internal control to

prevent and reduce possible risks, and making recommendations on improvement monitoring in order

to secure appropriate and effective internal control activities

In summary, the Audit Committee considered that the financial statements prepared by the

Company and its subsidiaries clearly meet with generally accepted accounting standard, that the

information disclosure is sufficient, accurate, complete and reliable, that the internal control is efficient

and sufficient to prevent corruption and conflict of interest and that all departments have clear roles

and responsibilities. No significant weakness was found, which is in line with the auditor’s assessment

report. The operations of the Company and its subsidiaries fully comply with the laws regulating the

Securities and the Stock Exchange of Thailand, the Stock Exchange of Thailand’s regulations or other

related laws.

The Audit Committee approved and appointed Mr. Waiyawat Kosamarnchaiyakij (Registration

no. 6333) or Mr. Charoen Phosamritlert (Registration no. 4068) or Mr. Ekkasit Chuthamsatid

(Registration no. 4195) of KPMG Poomchai Audit Limited as the auditors for the Company and its

subsidiaries in 2015. The certified public accounting fee is Baht 2,223,000 (including out-of-pocket

expense), Baht 810,000 of which is the accounting fee for the Company’s auditing activity. The Audit

Committee proposed the matter to the Board of Directors for further consideration by the shareholders

at the ordinary shareholders meeting.

Capt....................................................

(Siridech Julpema)

Chairman of the Audit Committee

31 December 2014


Page 132

12. Connected Transaction


Page 133


Page 134


Page 135


Page 136


Page 137


Page 138


Page 139


Page 140


Page 141


Page 142


Page 143


Page 144


Page 145


Page 146


Page 147

Part 3 Financial Statement and Operation Performance

Page 148

Part 3

Financial Status and Operational Results

13. Financial Performance

Ratchaburi Electricity Generating Holding Public Company Limited and its subsidiaries

Statement of financial positionAs at 31 December 2014, 2013, and 2012

2014 ** 2013 ** 2012

Amount % Amount % Amount %THB THB THB

Assets

Current assets

Cash and cash equivalents 10,623,059,474 11.04 7,437,781,555 7.94 8,260,581,184 8.53

Current investments 3,642,741,461 3.79 1,966,633,673 2.09 5,671,598,422 5.86

Trade accounts receivable from related parties 10,369,985,176 10.78 8,336,744,802 8.88 3,822,870,739 3.95

Trade accounts receivable from other parties 124,669,329 0.13 164,008,077 0.17 390,058,347 0.40

Other receivables 312,993,991 0.33 299,035,378 0.32 175,263,035 0.18

Advances to and other receivables from related parties 76,475,290 0.08 85,546,015 0.09 65,436,380 0.07

Short-term loans to related parties - - - - 100,278,090 0.10

Current portion of long-term loans to related party - - - - 62,500,000 0.07

Current portion of finance lease receivable from related party 3,427,592,070 3.56 3,475,585,712 3.70 - -

Other receivable from disposal of investment - - - - 211,164,272 0.22

Spare parts and supplies 2,629,408,676 2.73 2,541,481,202 2.71 2,174,372,626 2.25

Other current assets 200,746,971 0.21 68,464,065 0.07 100,458,888 0.10

Total current assets 31,407,672,438 32.65 24,375,280,479 25.97 21,034,581,983 21.73

(Restated)


Page 149



2014 ** 2013 ** 2012

Amount % Amount % Amount %THB THB THB

Assets

Non-current assets

Long-term receivable from related parties 1,462,503 0.00 - - - -

Investments in subsidiaries - - - - - -

Investments in jointly-controlled entities 10,535,016,371 10.95 11,656,261,243 12.42 13,909,641,259 14.37

Investments in associates 958,382,029 1.00 957,627,796 1.02 681,035,858 0.70

Investment in other company 62,299,900 0.06 62,299,900 0.07 50,656,049 0.05

Other long-term investments 4,002,389,725 4.16 3,120,895,934 3.32 2,879,221,390 2.97

Long-term loans to related parties 43,195,812 0.04 - - - -

Other long-term receivable from disposal of investment - - - - 3,137,921,057 3.24

Property, plant and equipment 14,480,210,124 15.05 15,694,986,501 16.72 46,227,736,053 47.75

Land for future development projects 318,078,437 0.33 309,207,570 0.33 305,389,850 0.32

Goodwill 273,532,776 0.28 763,742,443 0.81 752,913,124 0.78

Intangible assets 4,382,020,173 4.55 4,968,688,616 5.29 5,667,820,404 5.86

Finance lease receivable from related party 28,190,794,960 29.29 30,219,292,294 32.19 - -

Deferred tax assets 51,617,195 0.05 15,825,296 0.02 129,882,869 0.13

Other non-current assets 1,528,364,252 1.59 1,730,387,760 1.84 2,033,960,411 2.10

Total non-current assets 64,827,364,257 67.35 69,499,215,353 74.03 75,776,178,324 78.27

Total assets 96,235,036,695 100.00 93,874,495,832 100.00 96,810,760,307 100.00

** Figures of 2014 and 2013 are prepared in accordance with Thai Financial Reporting Interpretation Committee no.4 (TFRIC4)

(Restated)


Page 150



2014 2013 2012

Amount % Amount % Amount %

THB THB THB

Liabilities and equity

Current liabilities

Short-term loans from financial institution 2,300,000,000 2.39 8,224,215,414 8.76 900,000,000 0.93

Bill of exchange payables 2,500,000,000 2.60 1,550,000,000 1.65 1,800,000,000 1.86

Trade account payable to related party 49,317,797 0.05 42,376,952 0.05 112,257,949 0.11

Trade accounts payable to other parties 8,810,953,888 9.16 6,926,973,720 7.38 6,958,465,483 7.19

Other payables 1,105,286,343 1.15 788,085,398 0.84 849,424,301 0.88

Current portion of long-term loans - - -

from related party - - - - - -

Current portion of long-term loans - - -

from financial institutions - - - - 285,981,300 0.29

Current portion of debentures 721,333,696 0.75 4,960,006,969 5.28 3,936,858,576 4.07

Current portion of financial lease liability 1,609,509 0.00 1,515,121 0.00 1,009,072 0.00

Income tax payable 349,949,126 0.36 225,772,399 0.24 316,666,307 0.33

Other current liabilities 211,518,148 0.22 232,079,469 0.25 77,385,199 0.08

Total current liabilities 16,049,968,507 16.68 22,951,025,442 24.45 15,238,048,187 15.74

Non-current liabilities

Long-term loans from related party 1,095,464,557 1.14 1,186,296,942 1.26 1,358,280,353 1.40

Long-term loans from financial institutions 1,705,096,128 1.77 1,154,384,059 1.23 12,546,593,214 12.96

Advance receive from related party 7,903,089 0.01 - - - -

Debentures 13,972,087,390 14.53 5,384,766,582 5.75 10,972,910,967 11.33

Financial lease liability 2,028,554 0.00 3,554,063 0.00 943,151 0.00

Deferred tax liabilities 1,765,326,301 1.83 3,326,588,423 3.54 2,185,544,715 2.26

Employee benefit obligations 106,271,261 0.11 92,276,061 0.10 84,716,620 0.09

Other non-current liabilities 331,495,816 0.34 649,135,223 0.69 692,072,366 0.72

Total non-current liabilities 18,985,673,096 19.73 11,797,001,353 12.57 27,841,061,386 28.76

Total liabilities 35,035,641,603 36.41 34,748,026,795 37.02 43,079,109,573 44.50


(Restated)


Page 151



2014 2013 2012


THB THB THB

Equity

Share capitalAuthorised share capital 14,500,000,000 15.07 14,500,000,000 15.45 14,500,000,000 14.98

Issued and paid-up share capital 14,500,000,000 15.07 14,500,000,000 15.45 14,500,000,000 14.98

Share premium 1,531,778,000 1.59 1,531,778,000 1.63 1,531,778,000 1.58

Retained earnings

Appropriated

Legal reserve 1,450,000,000 1.51 1,450,000,000 1.54 1,450,000,000 1.50

Unappropriated 44,604,563,565 46.35 41,617,028,854 44.33 35,134,072,841 36.29

Other components of equity (1,304,667,007) (1.36) (810,217,854) (0.86) 350,139,145 0.36

Total equity attributable to owners of the Company 60,781,674,558 63.16 58,288,589,000 62.09 52,965,989,986 54.71

Non-controlling interests 417,720,534 0.43 837,880,037 0.89 765,660,748 0.79

Total equity 61,199,395,092 63.59 59,126,469,037 62.98 53,731,650,734 55.50

Total liabilities and equity 96,235,036,695 100.00 93,874,495,832 100.00 96,810,760,307 100.00


(Restated)


Page 152


Statement of comprehensive income

For the year ended December 2014, 2013, and 2012

2012


THB THB THB

Total revenue * 58,700,327,735 100.00 51,670,206,394 100.00 59,213,349,673 100.00

Revenue from sale and rendering of services 49,402,014,205 84.15 43,570,732,512 84.31 55,365,398,060 93.50

Revenue from finance lease contracts 5,567,738,377 9.49 5,448,867,934 10.55 - -

Cost of sale and rendering of services (47,913,682,328) (81.62) (41,059,815,328) (79.47) (47,269,494,929) (79.83)

Gross profit 7,056,070,254 12.02 7,959,785,118 15.39 8,095,903,131 13.67

Management service income 287,793,380 0.49 237,238,817 0.46 225,935,138 0.38

Dividend income 235,951,209 0.40 220,902,845 0.43 188,314,482 0.32

Interest income 267,816,802 0.46 411,354,161 0.80 603,132,032 1.02

Gain on bargain purchase 797,292,660 1.36 - - - -

Other income 856,899,014 1.46 407,568,168 0.79 226,848,257 0.38

Gain on disposal of long-term investment - - - - 783,678,571 1.32

Gain on termination of power purchase agreement - - - - 1,069,442,446 1.81

Gain on sale of other long-term receivable - - 645,830,339 1.25 - -

Administrative expenses (2,206,644,679) (3.76) (1,738,977,453) (3.37) (1,518,068,052) (2.56)

Gain (Loss) on exchange rate 347,986,335 0.59 704,113,765 1.36 798,048,594 1.35

Finance costs (1,518,453,072) (2.59) (1,633,389,718) (3.16) (2,400,016,000) (4.05)

Share of profit of jointly-controlled and associate entities 1,284,822,088 2.19 727,711,618 1.41 750,600,687 1.27

Profit before income tax expense 7,409,533,991 12.62 7,942,137,660 15.36 8,823,819,286 14.91

Income tax expense (1,269,377,123) (2.16) (1,433,240,280) (2.77) (887,235,560) (1.50)

Profit for the year 6,140,156,868 10.46 6,508,897,380 12.59 7,936,583,726 13.41

2014 ** 2013 **(Restated)


Page 153


Statement of comprehensive income


2012


THB THB THB

Other comprehensive income

Foreign currency translation differences for foreign operations (1,246,426,567) (2.12) (1,374,146,566) (2.66) (45,997,970) (0.08)

Net change in fair value of available-for-sale investments 567,381,248 0.97 176,717,520 0.34 698,667,109 1.18

(Income tax for other comprehensive income) reversal - - 93,635,108 0.18 (99,762,538) (0.17)

Defined benefit plan actuarial gains (359,822) (0.00) 5,813,383 0.01 - -

Other comprehensive income for the year, net of income tax (679,405,141) (1.16) (1,097,980,555) (2.13) 552,906,601 0.93

Total comprehensive income for the year 5,460,751,727 9.30 5,410,916,825 10.46 8,489,490,327 14.34

Profit (loss) attributable to:

Owner of the Company 6,279,034,711 10.70 6,514,115,726 12.61 7,726,269,619 13.05

Non-controlling interests (138,877,843) (0.24) (5,218,346) (0.01) 210,314,107 0.36

Profit for the year 6,140,156,868 10.46 6,508,897,380 12.60 7,936,583,726 13.41

Total comprehensive income attributable to:

Owner of the Company 5,784,585,558 9.85 5,353,758,727 10.36 8,301,659,988 14.02

Non-controlling interests (323,833,831) (0.55) 57,158,098 0.11 187,830,339 0.32

Total comprehensive income for the year 5,460,751,727 9.30 5,410,916,825 10.47 8,489,490,327 14.34

Basic earnings per share (Baht) 4.33 4.49 5.33

* Excluded gain on exchange rate


2014 ** 2013 **(Restated)


Page 154


Statement of cash flow


2014 2013 2012(Restated)

Amount Amount AmountTHB THB THB

Cash flows from operating activities

Profit for the year 6,140,156,868 6,508,897,380 7,936,583,726

Adjustments for

Depreciation 1,076,378,097 1,126,049,124 3,498,583,455

Amortisation 198,788,431 307,112,592 336,703,950

Impairment losses on goodwill 375,367,356 - -

Impairment losses on property, plant and equipment 134,176,015 - -

Interest income (267,816,802) (411,354,161) (603,132,032)

Finance costs 1,518,453,072 1,633,389,718 2,400,016,000

Provision for obsolescence of spare parts and supplies 203,139,799 46,671,121 58,982,997

Provision for impairment of investment - 15,155,956 -

Unrealised loss (gain) on exchange (546,087,507) (323,656,466) (736,528,004)

Dividend income (235,951,209) (220,902,845) (188,314,482)

Gain on disposal of long-term investment - - (783,678,571)

Gain on sale of other long-term receivable - (645,830,339) -

Loss on disposal of plant and equipment 197,417 19,280,995 13,194,662

Loss on disposal of spare parts and supplies - 6,643,146 25,487,523

Gain from termination of power purchase agreement - - (1,069,442,446)

Employee benefit obligations 16,461,081 15,495,789 15,138,483

Shares of profit of jointly-controlled and associate entities (1,284,822,088) (727,711,618) (750,600,687)

Gain on bargain purchase (797,292,660) - -

Income tax expense 1,269,377,123 1,433,240,280 887,235,560

Gain from change in securities held for trading investment (2,113,492) (1,133,061) (1,989,810)

Gain on disposal of investment in jointly-controlled entity (10,942,000) - -

Loss on disposal of investment in subsidiary 142,113,794 - -

Reversal of provision and others (302,661,862) - -

Loss on written-off for project development cost and others - 283,930,476 -

7,626,921,433 9,065,278,087 11,038,240,324


Page 155




2014 2013 2012(Restated)


Changes in operating assets and liabilities

Trade accounts receivable (1,566,348,790) (4,513,874,064) (1,482,427,453)

Trade accounts receivable from other parties 27,497,492 194,092,155 (46,312,209)

Advances to and other receivables from related parties 9,109,958 (44,042,320) (19,235,709)

Other receivables 8,658,443 (136,808,130) 42,536,523

Lease receivable from related party 3,815,897,701 1,592,826,362 -

Spare parts and supplies (69,582,451) (465,403,757) (172,230,298)

Other current assets and non-current assets (169,531,668) (19,179,180) (270,110,120)

Trade account payable from related party 6,940,845 (69,880,997) (34,056,035)

Trade accounts payable from other parties 1,788,630,769 (15,953,353) 2,382,174,965

Other payables (196,759,800) 71,512,346 29,021,444

Other current liabilities (109,324,406) 204,038,235 (224,085,433)

Cash generated from operating activities 11,172,109,526 5,862,605,384 11,243,515,999

Income tax paid (1,330,557,462) (1,393,986,295) (1,642,366,367) Net cash from operating activities 9,841,552,064 4,468,619,089 9,601,149,632


Page 156




2014 2013 2012(Restated)


Cash flows from investing activities

Interest received 257,697,716 286,491,405 361,441,727

Dividends received 1,178,979,808 1,198,528,297 962,777,287

Purchases of property, plant and equipment (807,926,126) (445,845,998) (938,250,671)

Sale of plant and equipment 5,134,837 6,176,780 218,543

Proceed from termination of power purchase agreement - - 3,167,366,428

Purchases of intangible assets (47,972,031) (27,874,079) (7,267,209)

Net cash inflow (outflow) in current investments (1,722,994,296) 3,756,097,810 (2,805,189,113)

Net cash inflow (outflow) in long-term investments (250,000,000) (23,000,000) 368,000,000

Proceed from sale of long-term investment - - 643,251,000

Net cash outflow in long-term investments - - (804,838,397)

Decrease in short-term loans to related parties - - -

Increase in short-term loans to related parties - (214,646,035) (104,191,025)

Decrease in long-term loans to related parties - 62,500,000 -

Increase in long-term loans to related parties (41,299,037) - -

Proceed from sale of other long-term receivable - 3,518,058,536 -

Proceed from other receivable from disposal of investment - 350,277,499 -

Cash outflow on acquisition of investments in subsidiaries (703,435,335) - -

Repayment of long-term loans from related party - - (2,781,918,143)

Proceed from liquidation and disposal of investment in subsidiaries 118,428,750 - -

Proceed from disposal of investment in jointly-controlled entity 10,942,000 20,800,000 -

Cash outflow on acquisition of investments in jointly-controlled entities (417,275,485) (133,520,000) (507,020,830)

Cash outflow on acquisition of investments in associates - (64,771,661) (342,770,299)

Cash outflow on acquisition of investment in other company - (11,643,851) -

Net cash provided by (used in) investing activities (2,419,719,199) 8,277,628,703 (2,788,390,702)


Page 157




2014 2013 2012(Restated)


Cash flows from financing activities

Finance costs paid (1,448,329,712) (1,867,748,460) (2,412,194,763)

Proceeds from issue of ordinary shares 10,040,794 15,061,191 20,182,431

Dividend paid to equity holders of the Company (3,290,403,975) (3,290,737,147) (3,262,002,373)

Proceeds from bills of exchange payables 4,700,000,000 3,000,000,000 2,300,000,000

Proceeds from short-term loans from financial institutions 17,535,000,000 13,160,718,504 14,540,000,000

Proceeds from long-term loans from financial institutions 537,705,641 2,945,950,000 -

Proceeds from issue of debentures 9,736,500,000 - -

Repayment of bills of exchange payables (3,750,000,000) (3,250,000,000) (500,000,000)

Repayment of short-term loans from financial institutions (23,433,996,684) (6,424,227,960) (13,640,000,000)

Repayment of finance lease liability (1,406,481) (1,841,870) (1,433,698)

Proceeds from long-term loans from related party - - -

Repayment of long-term loans from related party - (58,170,400) (64,851,345)

Repayment of long-term loans from financial institutions - (13,474,509,750) (2,542,915,200)

Proceeds from issue of debentures - - -

Redemption of debentures (4,961,400,000) (3,939,900,000) (3,663,300,000)

Net cash used in financing activities (4,366,290,417) (13,185,405,892) (9,226,514,948)


Page 158




2014 2013 2012(Restated)


Net (decrease) in cash and cash equivalents 3,055,542,448 (439,158,100) (2,413,756,018)

Cash and cash equivalents at 1 January 7,437,781,555 8,260,581,184 10,698,628,906

Effect of exchange rate changes on balances held in foreign currencies 112,369,728 (383,641,529) (24,291,704)

Cash of subsidiary sold during the year (28,334,506) - -

Cash of subsidiary acquired during the year 45,700,249 - -

Cash and cash equivalents at 31 December 10,623,059,474 7,437,781,555 8,260,581,184


Page 159

13.1 Financial ratios

Year 2014*

TFRIC4

Year 2013*

TFRIC4

Year 2012

Non-TFRIC4

Liquidity Ratio

1 Current Ratio (times) 1.96 1.06 1.38

2 Quick Ratio (times) 1.54 0.78 1.19

3 Cash Flow from Operation to Current Liabilities Ratio (times) 0.50 0.23 0.68

4 Accounts Receivable Turnover (times) 5.79 7.71 16.13

5 Average Collection Period (days) 62 47 22

6 Accounts Payable Turnover (times) 6.05 5.85 8.03

7 Average Payment Period (days) 59 62 45

Profitability Ratio

8 Gross Profit Margin (%) 12.84 16.24 14.62

9 Net Profit to Total Revenue (excluded fuel costs) (%) 38.19 41.61 40.83

10 Return on Equity (%) 10.55 11.38 15.32

Efficiency Ratio

11 Return on Average Total Assets (%) 6.46 6.67 8.18

12 Return on Average Total Fixed Asset (%) 46.86 44.78 23.66

13 Total Assets Turnover (times) 0.17 0.53 0.61

14 EBITDA (million Baht) 10,523.02 11,055.36 15,118.11

15 EBITDA to Average Total Assets Raio (%) 11.07 11.33 15.5716 EBITDA to Average Total Fixed Assets Ratio (%) 68.33 64.85 31.27

Leverage Ratio

17 Debt to Equity Ratio (times) 0.57 0.59 0.8

18 Debt Service Coverage Ratio (DSCR) (times) 0.66 1.08 1.57

19 Net debt to Equity Ratio (times) 0.13 0.22 0.33

Per Share Data

20 Book Value per Share (Baht) 41.92 40.20 36.53

21 Earnings per Share (Baht) 4.33 4.49 5.33


Page 160

14. Management Discussion and Analysis

1. Significant events of the year 2014

1.1. The Purchase and Transfer of Tri Energy Co., Ltd. to Ratchaburi Electricity

Generating Co., Ltd.

On January 28, 2014, Ratchaburi Gas Company Limited ("RGAS"), 99.99 per cent-owned

subsidiary, purchased 17.119 million shares or 49.99 per cent of the total shares of Tri Energy

Company ("TECO") from the former shareholder at the amount of USD 21.32 million (equivalent to

Baht 703.43 million). As a consequence, the investing portion of TECO via RGAS increased to 99.99

per cent. On March 31, 2014, the Company accepted the transfer of RGAS via Entire Business

Transfer ("EBT") method. As a result, the Company became the direct shareholder of TECO. Then,

RGAS has already finished the liquidation process since August 28, 2014.

On August 1, 2014, the Company transferred TECO through EBT method to Ratchaburi

Electricity Generating Co., Ltd. ("RG"), both companies were the Company's wholly owned

subsidiaries. In this regard, RG increased its registered share capital for Baht 3,625 million by the

issuance of 362.50 million new ordinary shares at the par value of Baht 10 each in order to purchase

and accept the transfer. Therefore, RG's registered share capital is now Baht 21,900 million. The

transaction was done in order to manage the Company's investment in accordance with the structure

of the Company group. Hereafter, RG has 2 power plants in control which are Ratchaburi Power

Plants, installed capacity of 3,645 megawatts and Tri Energy Power Plant, installed capacity of 700

megawatts.

1.2. Issuance and offering of notes by a subsidiary

On April 28, 2014, RH International (Singapore) Corporation Pte. Ltd., a subsidiary in

Singapore, completed its issue and offering of USD 300 million notes bearing a fixed interest rate of

3.50 per cent per annum with a tenor of 5 years due in 2019. The issue of the notes is the first

issuance under USD 1,000 million notes. Ratings of "Baa2" and "BBB" have been assigned to the

notes by Moody's and Standard & Poor's, respectively.

1.3. The signing of financial documents of Nava Nakorn Electricity Generating Company

Limited's Small Power Producer Project

On May 28, 2014, Nava Nakorn Electricity Generating Company Limited, the operator of

Small Power Producer Project, achieved the project's financing through the signing of the financial

documents with 3 Thai financial institutes. The initial amount of the loan agreement is approximately

Baht 4,770 million and the agreement is effective for 20.5 years.

1.4. The Sale of Shares of Sukhothai Energy Co., Ltd.

On July 21, 2014, Ratchaburi Energy Co., Ltd., a subsidiary, has sold its entire shares of

Sukhothai Energy Co., Ltd., totaling 200,000 shares or 25 per cent at Baht 54.71 per share, in the

total amount of Baht 10.94 million to the former shareholder of such company.


Page 161

1.5. Solar Power Generation Project in Japan

1) The Entering into a Shareholder Agreement by RH International (Singapore)

Corporation Pte. Ltd.

On September 12, 2014, RH International (Singapore) Corporation Pte. Ltd. ("RHIS"), a

subsidiary in Singapore, entered into a Shareholder Agreement with Chow International Co., Ltd.

("CHOW") in a proportion of 60:40 in order to establish RICI International Investment Pte. Ltd.

("RICI") in Singapore to invest in solar power generation project in Japan with approximately 33

Megawatts capacity (initial phrase).

On November 21, 2014, RICI is established with the registered capital of SGD 100,

dividing into 100 ordinary shares at SGD 1 each, with the 60 per cent stake held by RHIS and the 40

per cent stake held by CHOW. Its issued capital was fully paid. However, RICI is subject to increase

its own registered capital in compliance with capital investment and financing conditions.

2) The Entering into a Shareholder Agreement by Ratchaburi Energy Co., Ltd.

On September 12, 2014, Ratchaburi Energy Co., Ltd. ("RE"), a subsidiary, entered into

a Shareholder Agreement with Premier Solution Co., Ltd. ("PSCL") in order to establish Oversea

Green Energy Co., Ltd. ("OGE") to provide management services for solar power generation project

in Japan.

On October 17, 2014, OGE is established with the registered capital of Baht 1 million,

dividing into 100,000 ordinary shares at Baht 10 each, with the 60 per cent stake held by RE and the

40 per cent stake held by PSCL. Its issued capital was fully paid.

1.6. The Sale of Shares of Sustainable Energy Corporation Co., Ltd.

On September 29, 2014, Ratchaburi Energy Co., Ltd., a subsidiary, has sold its entire

shares of Sustainable Energy Corporation Co., Ltd., a developer of a wind farm project in Phetchabun

Province, totaling 24.28 million shares or 55.18 per cent, in the total amount of Baht 118.43 million to

a new shareholder.

1.7. The Purchase of Ratchaburi Cogeneration Co., Ltd.

On October 30, 2014, Ratchaburi Electricity Generating Co., Ltd., a subsidiary,

purchased 3,500,000 shares of Ratchaburi Cogeneration Co., Ltd. (name changed to Berkprai

Cogeneration Co., Ltd.), constituting 35 per cent of all issued share capital from Rajburi Sugar Co.,

Ltd. in the amount of Baht 8.75 million, in order to jointly invest in Small Power Producer Project

which is located in Berkprai Subdistrict, Ban Pong District, Ratchaburi Province. The project has

electricity generating capacity of 100 megawatts and steam generating capacity of 15 tons per hour

and has 25-year Firm Cogeneration Power Purchase Agreement with Electricity Generating Authority

of Thailand. The Commercial Operation Date is expected to be in 2019.


Page 162

2. Change in Thai Financial Reporting Standard

According to the Federation of Accounting Professions which required listed companies to

prepare financial statements in accordance with Thai Financial Reporting Standard, the Company

including Ratchaburi Electricity Generating Co., Ltd., a subsidiary, and Ratchaburi Power Co., Ltd., a

jointly-controlled entity, have adopted Thai Financial Reporting Interpretation Committee no.4

("TFRIC 4") "Determining whether an Arrangement Contains a Lease" that requires Thai Accounting

Standard no. 17 ("TAS 17") "Leases" to be applied since January 1, 2014 onward. Such subsidiary

and jointly-controlled entities have signed Power Purchase Agreements with Electricity Generating

Authority of Thailand which determined to be agreements containing finance lease. This resulted in

the change in presentation of financial statement, as follow:-

2.1. Statements of Comprehensive Income

The revenue from Availability Payment ("AP") in terms of debt financing charge and equity

financing charge would be recorded as revenue from financial leases using the effective interest rate

method. In the year 2014, the Company recorded the revenue from financial leases in the amount of

Baht 5,567.74 million. Still, the recognition of the revenue from AP in terms of charging for operation

and maintenance, reimbursement, other costs and energy payment would be unchanged.

2.2. Statement of Financial Position

Some spare parts and supplies, property plant and equipment and intangible assets would

be recorded as financial lease receivables at outstanding amount, net of unearned interest income

less allowance for doubtful accounts. As at December 31, 2014, the Company recorded financial

lease receivables in the amount of Baht 31,618.39 million. In addition, deferred tax assets and

investments in jointly-controlled and associate entities decreased in the amount of Baht 189.91 million

and Baht 217.47 million, respectively. Then, the retained earnings increased in the amount of Baht

2,698.69 million.


Page 163

Effects to consolidated financial statements (Million Baht)

Description TFRIC4Previous

Method

Increase/

(Decrease)

Statements of comprehensive income for the year 2014

Revenue from sale and rendering of services 49,402.01 58,668.91 (9,266.90) (1)

Revenue from financial leases 5,567.74 - 5,567.74

Cost of sale and rendering of services 47,913.68 50,769.54 (2,855.86) (2)

Other income 856.90 899.75 (42.85)

Administrative expenses 1,697.10 1,720.03 (22.93)

Share of profit of jointly-controlled and associate entities 1,284.82 1,337.07 (52.25)

Income tax expense 1,269.38 1,295.94 (26.56)

Profit for the year attributable to the Company 6,279.03 7,167.94 (888.91)

Statement of financial position as at December 31, 2014

Financial lease receivables 31,618.39 - 31,618.39

Spare parts and supplies/ Property, plant and equipment/ Intangible assets 21,491.64 50,003.95 (28,512.31)

Investments in jointly-controlled entities 10,535.02 10,752.49 (217.47)

Deferred tax assets 51.62 241.53 (189.91)

Unappropriated retained earnings 44,604.56 41,905.87 2,698.69

Total assets / Total liabilities and equity 96,235.04 93,536.35 2,698.69

(1) The difference would be recognized as revenue from financial leases.

(2) The difference was the depreciation of power plants and equipment, which would be recorded as financial lease receivables

in the statement of financial position.

3. Operation performance according to consolidated financial statement

The operating result according to the consolidated financial statements of the Company and its

subsidiaries for the year 2014 showed the profit of Baht 6,279.03 million or Baht 4.33 per share,

decreasing by Baht 235.09 million or 3.6 per cent, compared to the profit of Baht 6,514.12 million or

Baht 4.49 per share of the year 2013 (restated). The significant differences were as follows:-

3.1. Gain on bargain purchase the shares of Tri Energy Co., Ltd.

On January 28, 2014, Ratchaburi Gas Co., Ltd., a subsidiary, acquired an additional 49.99

per cent of the common shares of Tri Energy Co., Ltd. (“TECO”), at USD 21.32 million or equivalent

to Baht 703.43 million. As a result, the percentage held of TECO increased from 50 per cent to 99.99

per cent of the issued and paid up capital. The Company recognized gain on bargain purchase from

such transaction in the amount of Baht 797.29 million, which derived from gain on bargain purchase

in the amount of Baht 2,257.02 million deducted by difference from fair value adjustment of previously

held equity interest in TECO in the amount of Baht 1,459.73 million. On August 1, 2014, TECO

completed the transfer of its entire business to Ratchaburi Electricity Generating Co., Ltd. ("RG"), a

subsidiary. As a result, RG has 2 power plants in its operation which are Ratchaburi Power Plants at

installed capacity of 3,645 megawatts and Tri Energy Power Plant at installed capacity of 700

megawatts.


Page 164

3.2. Revenue from sale and rendering of services (excluded fuel costs)

Revenue from sale and rendering of services (excluded fuel costs at Baht 42,622.74 million)

for the year 2014 was Baht 6,779.27 million, decreasing by Baht 764.64 million or 10.1 per cent from

Baht 7,543.91 million in the year 2013. The main reason was the revenue from sale of Ratchaburi

Power Plants decreased in the amount of Baht 993.35 million. This resulted from the shutdown for

planned maintenance in the year 2014 was less than that of the previous year which decreased Base

Availability Credit in 2014 comparing to 2013, as specified in Power Purchase Agreement.

3.3. Cost of sale and rendering of services (excluded fuel costs)

Cost of sales and rendering of services (excluded fuel costs at Baht 42,622.74 million) for

the year 2014 was Baht 5,290.94 million, increasing by Baht 257.95 million or 5.1 per cent from Baht

5,032.99 million in the year 2013. The main reason was, in the year 2014, the cost of sales and

rendering of services of Tri Energy Power Plant was consolidated in the amount of Baht 531.35

million. While the shutdowns for planned maintenance in the year 2014 that were less than those of

the previous year offset the cost of sales and rendering of services of power plants of a subsidiary in

Australia and Ratchaburi Power Plants in the amount of Baht 184.82 million and Baht 111.18 million,

respectively.

3.4. Interest income and gain on sale of other long-term receivable

Interest income for the year 2014 were Baht 267.82 million, decreasing by Baht 143.53

million or 34.9 per cent from Baht 411.35 million in the year 2013. The main reason was, in the year

2013, RATCH-Australia Corporation Co., Ltd. ("RAC"), a subsidiary in Australia, recorded interest

income of Scheduled Payment Option Agreement from the sale of an investment in Loy Yang A

Power Plant in the amount of Baht 163.36 million. Later on, RAC has already sold such agreement in

June 2013 and recorded gain on sale of such agreement in the amount of Baht 645.83 million.

3.5. Other income

Other income for the year 2014 was Baht 856.90 million, increasing by Baht 449.33 million

or 110.3 per cent from Baht 407.57 million in the year 2013. The main reason was the reversal of the

deferred consideration payable and reimbursement the project development of RATCH-Australia

Corporation Co., Ltd. in the amount of Baht 440.24 million since the counterparty failed to meet

investment criteria in the agreement.

3.6. Administrative expenses

Administrative expenses for the year 2014 was Baht 2,206.64 million, increasing by Baht

467.66 million or 26.9 per cent from Baht 1,738.98 million in the year 2013. The main reasons were

as follows;

3.6.1. In the year 2014, the Company recognized impairment loss on a renewable power

plant in Australia in the amount of Baht 509.55 million due to its current trading performance

declining.


Page 165

3.6.2. In the year 2014, the Company recognized loss on disposal of the investment in

Sustainable Energy Corporation Co., Ltd., an indirect subsidiary which develops of a wind farm

project in Phetchabun Province, in the amount of Baht 142.11 million.

3.6.3. In the year 2013, the development cost of Nam Ngum 3 Hydro Power Plant Project

was written off in the amount of Baht 315 million due to the cancellation of project development

contract by Lao PDR government. In addition, the development cost of Koh Kong Power Plant Project

was written off in the total amount of Baht 29.14 million.

3.7. Gain on exchange rate

In the year 2014, the Company recorded gain on exchange rate in the amount of Baht

347.99 million, decreasing by Baht 356.12 million or 50.6 per cent from Baht 704.11 million in the

year 2013. The main reason was the decrease in gain on exchange rate of JPY bond due to the

depreciation of Japanese Yen currency compared to the previous year.

3.8. Finance Costs

Finance costs for the year 2014 were Baht 1,518.45 million, decreasing by Baht 114.94

million or 7.0 per cent from Baht 1,633.39 million in the year 2013. The main reason was interest

expenses of Ratchaburi Electricity Generating Co., Ltd. decreased in the amount of Baht 124.40

million due to the principal repayments during the year.

3.9. Share of profits in jointly-controlled and associated entities

Share of profits in jointly-controlled and associated entities for the year 2014 was Baht

1,284.82 million, increasing by Baht 557.11 million or 76.6 per cent from Baht 727.71 million in the

year 2013. The main reasons were as follows;

3.9.1. In the year 2014, the effect of exchange rate increased the operating results of 3

jointly-controlled entities which are Hongsa Power Co., Ltd., Ratchaburi Power Co., Ltd., and

SouthEast Asia Energy Ltd., in proportion, in the amount of Baht 293.33 million, Baht 106.66 million,

and Baht 88.05 million, respectively.

3.9.2. The operating result of Ratchaburi Power Co., Ltd. increased in the amount of Baht

105.03 million. The main reason was the revenue from Availability Payment of its Power Plant, in the

portion of 25 per cent, increased in the amount of Baht 109.98 million, as specified in Power

Purchase Agreement.

3.10. Income tax expense

Income tax expense in the year 2014 was Baht 1,269.38 million, decreasing by Baht 163.86

million or 11.4 per cent from Baht 1,433.24 million in the year 2013. The main reason was the

decrease in profit before tax of Ratchaburi Electricity Generating Co., Ltd. decreased the income tax

expense in the amount of Baht 215.31 million.


Page 166

4. Analysis of Statements of Financial Position

4.1. Analysis of Assets

As at December 31, 2014, the total assets were Baht 96,235.04 million, increasing by Baht

2,360.54 million or 2.5 per cent from Baht 93,874.50 million as at December 31, 2013. The details

were as follows:

(Million Baht)

Dec 31, 2014 Dec 31, 2013

(Restated) Increase

(Decrease)%

Current assets 31,407.68 24,375.28 7,032.40 28.9

Non-current assets 64,827.36 69,499.22 (4,671.86) (6.7)

Total Assets 96,235.04 93,874.50 2,360.54 2.5

4.1.1. As at December 31, 2014, current assets were Baht 31,407.68 million, increasing by

Baht 7,032.40 million from Baht 24,375.28 million as at December 31, 2013. The main reasons were

as follow:-

(1) Cash and cash equivalents including current investments of RH International

(Singapore) Corporation Pte. Ltd., a subsidiary in Singapore, increased in the amount of Baht

3,127.33 million. The main reason was the issue of USD 300 million debentures to repay SGD 260

million (equivalent to USD 206.05 million) short-term loan from a financial institute in April 2014.

(2) Trade account receivable from related party increased by Baht 2,033.25 million.

The main reason was trade account receivable of Ratchaburi Electricity Generating Co., Ltd. ("RG")

increased in the amount of Baht 2,047.55 million due to the consolidation of Tri Energy Co., Ltd.

("TECO") as well as the revenues from sales of RG in November and December 2014 were higher

than those in November and December 2013.

4.1.2. As at December 31, 2014, non-current assets were Baht 64,827.36 million,

decreasing by Baht 4,671.86 million from Baht 69,499.22 million as at December 31, 2013. The main

reason was, due to the additional acquisition of Tri Energy Co., Ltd. ("TECO") on January 28, 2014,

the recognition of TECO was changed to be a consolidation; as a result, the investment in TECO

decreased in the amount of Baht 2,163.16 million. In addition, financial lease receivables were written

off during the year in the amount of Baht 2,028.50 million.


Page 167

4.2. Analysis of Liabilities and Equity

As at December 31, 2014, total liabilities and equity were Baht 96,235.04 million, increasing

by Baht 2,360.54 million or 2.5 per cent from Baht 93,874.50 million as at December 31, 2013. The

details were as follows:

(Million Baht)

Dec 31, 2014Dec 31, 2013

(Restated) Increase

(Decrease)%

Liabilities 35,035.64 34,748.03 287.61 0.8

Equity 61,199.40 59,126.47 2,072.93 3.5

Liabilities and Equity 96,235.04 93,874.50 2,360.54 2.5

4.2.1. As at December 31, 2014, liabilities were Baht 35,035.64 million, increasing by Baht

287.61 million from Baht 34,748.03 million as at December 31, 2013. The main reasons were as

follow:-

(1) Debentures and short-term loans from financial institutions of RH International

(Singapore) Corporation Pte. Ltd., a subsidiary in Singapore, increased in the amount of Baht

2,996.08 million due to the issue of USD 300 million debentures to repay SGD 260 million (equivalent

to USD 206.05 million) short-term loan from a financial institute in April 2014.

(2) Trade accounts payable of Ratchaburi Electricity Generating Co., Ltd. increased

in the amount of baht 1,776.49 million due to the consolidation of Tri Energy Co., Ltd. ("TECO") as

well as Ratchaburi Power Plants generated electricity in November and December 2014 more than in

November and December 2013, resulting in the increase in fuel consumption.

(3) RATCH-Australia Corporation Co., Ltd., a subsidiary in Australia withdrew long-

term loan from financial institution during the year 2014 in the amount of AUD 20 million, equivalent to

Baht 537.71 million.

(4) Ratchaburi Electricity Generating Co., Ltd., a subsidiary, made a repayment

during the year in the amount of Baht 4,961.40 million.

4.2.2. Equity increased by Baht 2,072.93 million. The main reasons were as follows:

(1) The profit of the year 2014 in the amount of Baht 6,279.03 million

(2) The dividend payment during the year 2014 in the amount of Baht 2.27 per

share decreased retained earnings in the amount of Baht 3,291.50 million.


Page 168

(3) Other components of equity decreased in the amount of Baht 494.45 million.

The main reason was currency translation differences decreased the equity in the amount of Baht

1,061.47 million. On the other hand, there was a gain on fair value changes in investment in EDL-

GEN in the amount of Baht 567.38 million.

(4) Non-controlling interests decreased by Baht 420.15 million.

5. Analysis of Cash Flows

Cash and cash equivalents of the Company and its subsidiaries as at December 31, 2014

were Baht 10,623.06 million, increasing by Baht 3,185.28 million from Baht 7,437.78 million on

December 31, 2013. The details were summarized below:

5.1. The increase in net cash from operating activities increased cash flow in the amount of

Baht 5,372.93 million. The main reason was the Company received cash from trade account

receivable more than that in the previous year in the amount of Baht 2,947.52 million and paid for

trade account payable less than that in the previous year in the amount of Baht 1,804.58 million.

5.2. The increase in net cash used in investing activities decreased cash flow in the amount of

Baht 10,697.35 million. The main reasons were as follows;

5.2.1. the year 2014, the Company invested in current investments in the amount of Baht

1,722.99 million. On the other hand, in the year 2013, the Company received cash from current

investments in the amount of Baht 3,756.10 million.

5.2.2. On January 28, 2014, the Company additionally purchased the shares of Tri Energy

Co., Ltd. in the amount of USD 21.32 million, or equivalent to Baht 703.43 million, as specified in no.

3.1.

5.2.3. During the year 2013, RATCH-Australia Corporation Co., Ltd., a subsidiary in

Australia, received cash from the sale of long-term receivable in the amount of Baht 3,518.06 million.

5.3. The decrease in net cash used in financing activities increased cash flow in the amount of

Baht 8,819.12 million. The main reasons were as follows;

5.3.1. The issue of USD 300 million debentures of RH International (Singapore)

Corporation Pte. Ltd., a subsidiary in Singapore, to repay SGD 260 million short-term loan from a

financial institute in April 2014 increased cash in the amount of Baht 3,037.50 million.

5.3.2. During the year 2014, RATCH-Australia Corporation Co., Ltd., a subsidiary in

Australia withdrew long-term loan from financial institution during the year 2014 in the amount of AUD

20 million, equivalent to Baht 537.71 million.

5.3.3. During the year 2014, finance costs paid decreased in the amount of Baht 419.42

million.

5.3.4. The loan repayment during the year 2013 of RATCH-Australia Corporation Co., Ltd.,

a subsidiary in Australia, decreased cash flows in the total amount of Baht 4,307.84 million.


Page 169

6. Significant Financial Ratios

1) Current Ratio (Times) 1.96 1.06 2) Net Profit to Total Revenue (excluded fuel costs) (%) 38.19 41.61 3) Return on Equity (%) 10.55 11.38 4) Return on Assets (%) 6.46 6.67 5) EBITDA (Million Baht) 10,523 11,055 6) EBITDA to Total Assets (%) 11.07 11.33 7) Debt to Equity Ratio (Times) 0.57 0.59 8) Debt Service Coverage Ratio (Times) 0.66 0.93 9) Book Value per Share (Baht) 41.92 40.20 10) Earning per Share (Baht) 4.33 4.49

Ratios 2014 2013 (Restated)

Information Certification

Page 170

Information Certification

The Company has reviewed this Annual Registration Statement with caution and certified that

the information disclosed herewith is complete, accurate, and truthful and not cause any

misunderstanding and does not omit any important information that needs to be disclosed. Moreover,

the Company also certifies that:

(1) The Financial Statement and other financial details that are summarized in this Annual

Registration Statement represent complete and accurate information regarding the

performance and the cash flow of the Company and its subsidiaries.

(2) The Company maintains an effective disclosure system that will assure the Company

discloses all true and important information of the Company and its subsidiaries and for

ensuring compliance.

(3) The Company maintains an effective internal control system and for ensuring compliance.

The Company has communicated our internal control assessment as of 19 December

2014 to the external auditor and the Audit Committee; this assessment included any

default, change and misconduct which may affect the reporting of the Company and its

subsidiaries’ financial statements.

Therefore, as evidence that these documents constitute the entire set that the Company has

certified; the Company has authorized Mr. Wutthichai Tankuranand to initial all pages. If any page is

without Mr. Wutthichai Tankuranand’s initials, the Company does not certify that the information given

is the true copy.

Name Position Signature

Mr. Pongdith Potchana Chief Executive Officer

Authorized Person

Mr.Wutthichai Tankuranand Chief Financial Officer

Attachment

Page 171

Attachment 1 Information of Company's directors, management

Ratchaburi Electricity Generating Holding Company Limited

Name of Director, Management / Position

Age (years)

Education and Training

RATCH Shareholding

(%)

Close Relatives to Management

Work Experiences

Period Position Organization /Company/ Type of Business


Chairman

Investment Committee Chairman

(EGAT's Representative Director)

Number of Termsin office : 2

Since 19 December 2011

59 Ph.D. in Petroleum Engineering, University of Oklahoma, U.S.A.

Master of Science in Petroleum Engineering, University of Oklahoma, U.S.A.

Bachelor of Science (with Special Distinction) in Petroleum Engineering, University of Oklahoma, U.S.A.

Certificate, “Bhumipalung Phandin” Executive Program, Class 2 (2013), Chulalongkorn University

Certificate, Executive Program on Energy Literacy for a Sustainable Future (TEA), Class 1 (2012), Thailand Energy Academy

Certificate, Capital Market Academy Executive Program (CMA), Class 13 (2011), Capital Market Academy

Certificate, Senior Executive Program on Administrative Justice, Class 2 (2011), Institute of Administrative Justice Development

Certificate, Role of Compensation Committee, (RCC 12/2011), Thai Institute of Directors Association

Certificate, Top Executive Program in Commerce and Trade Program, Class 3 (2010)

None None Other Positions at Present

2014 - Present Board of Directors Chairman Thai Oil Public Company Limited (4)

2014 - Present Deputy Permanent Secretary Ministry of Energy

Present Board of Director Chairman EGAT (1)

Previous Working Experiences

2014 Director - General, Department

of Mineral Fuels Ministry of Energy

2014 Board of Directors Member PTT Public Company Limited

2011-2014 Board of Directors Member EGAT

2010-2014 Deputy Permanent Secretary Ministry of Energy

2007-2014 Board of Directors Member Esso (Thailand) Public Company Limited

2008-2010 Director - General, Department of Mineral Fuels

Ministry of Energy

Attachment

Page 172


Age (years)


RATCH Shareholding

(%)


Work Experiences



(Cont.)

Certificate, Audit Committee Program, (ACP 32/2010), Thai Institute of Directors Association

Diploma, The National Defence Course, Class 51 (2008 - 2009), National Defence College

Certificate, Director Accreditation Program, (DAP 64/2007), Thai Institute of Directors Association

Senior Executive Program (SEP 60), London Business School, UK

Certificate, Senior Executive Development Program (Visionary Leadership) Class 46, Office of the Civil Service Commission

Notes (1) Major Shareholder (2) Subsidiary (3) Joint Venture (4) Energy Enterprise

Attachment

Page 173


Age (years)


RATCH Shareholding

(%)


Work Experiences



Independent Director

Audit Committee Chairman


Since 13 February 2012

64 Master of Public Administration, The National Institute of Development Administration

International Aviation Management Training Institute for Aviation Manager at Montreal, Canada

Bachelor of Science, Electrical, Royal Thai Air Force Academy

Certificate, Public Director Program, Public Director Institute

Certificate, Director Certification Program Update (DCPU 2/2014), Thai Institute of Directors Association

Certificate, Anti-Corruption for Executive Program (ACEP 13/2014), Thai Institute of Directors Association

Certificate, Successful Formulation & Execution of Strategy (SFE 19/2013), Thai Institute of Directors Association

Certificate, Director Certification Program (DCP 156/2012), Thai Institute of Directors Association

Certificate, Advance Audit Committee Program (ACP 40/2012), Thai Institute of Directors Association

Certificate, Monitoring Fraud Risk Management Course (MFM 8/2012), Thai Institute of Directors Association

Certificate, Monitoring the Internal Audit Function Course (MIA 13/2012), Thai Institute of Directors Association


-


Counselor Deputy Prime

Minister

Sub-Committee Chairman Monitoring and Evaluating Project

Board of Directors Metropolitan Electricity Authority

(MEA)

Nonthaburi Flood Disaster Committee Member

Risk Management Committee Member

MEA

MEA Policy Plan Committee Member

MEA

MEA’s Governor Policy Plan and Performance Appraisal Committee Member

MEA

Provident Fund Committee Member

Thai Airways International Public Company Limited

Attachment

Page 174

Name of Director,

Management / Position Age

(years) Education and Training

RATCH Shareholding

(%)


Work Experiences



(Cont.)

Certificate, Monitoring the Quality of Financial Reporting Course (MFR 16/2012), Thai Institute of Directors Association

Certificate, Monitoring the System of Internal Control and Risk Management Course (MIR 13/2012), Thai Institute of Directors Association

Pilot Training Department Manager

Thai Airways International Public Company Limited

Attachment

Page 175

Name of Director,



RATCH Shareholding

(%)


Work Experiences


3. Songpope Polachan


Human Resources and Remuneration Committee Member


Since 29 March 2013

60 Ph.D. in Geology, University of London, England

Bachelor of Science, Chiang Mai University

Certificate, Senior Executive Development Program (Visionary Leadership) (2004), Office of the Civil Service Commission


Certificate, Senior Executive Program on Administrative Justice, Class 3 (2012)

Diploma, The National Defence Course, Class 50 (2007), National Defence College

Certificate, Director Accreditation Program (DAP 23/2004), Thai Institute of Directors Association

Certificate, Directors Certification Program (DCP 52/2004), Thai Institute of Directors Association

Certificate, Financial for Non - Finance Directors Program, (FND 9/2004), Thai Institute of Directors Association

Certificate, ASEAN Executive Program, New York, USA

Certificate, Advance Executive Program, Kellogg School of Management, Northwestern University, USA


2013 - Present Board of Directors Member and Nomination and Remuneration Committee Member

IRPC Public Company Limited (4)


2014 Inspector General Ministry of Energy

2012-2014 Director, General of the

Department of Mineral Fuels Ministry of Energy

2006-2010 Deputy Director General,

Department of Mineral Fuel Ministry of Energy

2005-2013 Board of Directors Member Ratchaburi Electricity Generating Company Limited

Attachment

Page 176

Name of Director,

Management / Position

Age (years)


RATCH Shareholding

(%)


Work Experiences


4. Police Lieutenant General Thavorn Chanyim


Risk Management Committee Chairman


Since 27 March 2012

64 Master of Public Administration (MPA), National Institute of Development Administration

Bachelor of Public Administration, Police Cadet Academy

Command and Staff Army College

Joint Staff College


Diploma, The National Defence Course (Class 41), National Defence College

Certificate, Senior Command Course, Institute of Police Administration Development


-


2011-2013 Board of Directors Member,

Liquor Distillery Organization, Excise Department

Ministry of Finance

2009-2010 Assistant General Commissioner

Royal Thai Police

2008-2009 Board of Directors Member and

Audit Committee Chairman Provincial Electricity Authority

Attachment

Page 177

Name of Director,



RATCH Shareholding

(%)


Work Experiences




Audit Committee Member

Corporate Governance and Social Responsibility Committee Member


Since 30 March 2010

55 Doctor of Philosophy (Economics), Honorary Degree, Ramkhamhaeng University

Doctor of Arts in Financial and Banking, Honoris Causa, Siam University

Ph.D. (Honorary Degree) in Economics, Maejo University

Master of Economics, Atlanta University, U.S.A. (Scholarship & Outstanding Student Award from the National Deans’ Lists of America)

Bachelor of Science (Economics), Kasetsart University

Certificate, Advanced Management Program, Harvard Business School, U.S.A.

Certificate, Executive Program, Class 2, Capital Market Academy

Diploma, The National Defence Course (2007), National Defence College

Certificate the Civil Service Executive Program for Senior Civil Servants, Office of the Civil Service Commission

Diploma on Taxation, France, by ACTIM scholarship

Certificate, EDI Taxation Technology, University of Canberra, Australia

Certificate, Tax Authorities’ Use of the Internet, University of New South Wales, Australia



2014 - Present Board of Directors Member Government Savings Bank

2013 - Present Chief Inspector General Ministry of Finance

2012 - Present Board of Directors Member National Credit Bureau Company Limited


2011-2014 Board of Directors Member TOT Public Company Limited

2010-2013 Director - General, Revenue Department

Ministry of Finance

2009-2011 Board of Directors Member Thai Asset Management Corporation

2009-2010 Board of Directors Member Bank of Thailand

2009-2010 Vice Chairman Financial Institution Development Fund

2009-2010 Board of Directors Member Government Pension Fund

2009-2010 Board of Directors Member Credit Information Protection Commission

Attachment

Page 178


Age (years)


RATCH Shareholding

(%)


Work Experiences



(Cont.)

54 Certificate, Director Accreditation Program (DAP 2/2003), Thai Institute of Directors Association

None None Previous Working Experiences

2009-2010 Board of Directors Member Capital Market Supervisory Board, Securities and Exchange Commission

2009-2010 Director General, Fiscal Policy Office

Ministry of Finance

2009 Deputy Permanent Secretary Ministry of Finance

2009 Board of Directors Member ACL Bank Public Company Limited

2009 Board of Directors Member Provincial Electricity Authority

Attachment

Page 179

Name of Director,



RATCH Shareholding

(%)


Work Experiences


6. Mr. Chavalit Pichalai




Since 29 March 2014

59 Master of Arts (Development Economics), National Institute of Development Administration

Master of Arts Public Administration, Carleton University, Canada

Bachelor of Arts (Economics), Thammasat University


Certificate, Chief Information Officer (CIO), Class 24 (2012), National Electronics and Computer Technology Center (NECTEC)

Certificate, The Columbia Senior Executive Program (CSEP 131), Columbia University, USA (2011)

Diploma, National Defence College of Thailand (Class 2008)

Certificate, The Civil Service Executive Program for Senior Civil Servants (Visionary Leadership, Class 39), Office of the Civil Service Commission


2014-Present Board of Director Member and Risk Management Committee Member

PTT Exploration and Production

Public Company Limited (4)

2014-Present Director-General, Energy Policy and Planning Office (EPPO)

Ministry of Energy

2014-Present Physical Sciences and

Mathematics Committee Member

National Research Council of Thailand

2013-Present Management Member Sirindhorn International Environmental Park Foundation Committee


2013-2014 Member, Energy Dictionary (Nuclear) Committee,

The Royal Institute of Thailand

2012-2014 Inspector General Ministry of Energy

2011-2012 Deputy Director General, Department of Mineral Fuels

Ministry of Energy

2006-2011 Deputy Director General, Energy Policy and Planning Office (EPPO)

Ministry of Energy


Attachment

Page 180

Name of Director, Management /

Position Age


RATCH Shareholding

(%)


Work Experiences


7. Miss Piyathida Praditbatuga




Since 27 March 2012

44 Doctor of Business Administration, The University of South Australia, Australia

Master of Business Administration, International Business, The University of Birmingham, The United Kingdom

Postgraduate Diploma in Business Administration, International Business, University of Birmingham, United Kingdom

Bachelor of Science: Medical Technology, Chulalongkorn University

Advanced Certificate, Politics and Governance in Democratic Systems for Executive Course (Class 16), King Projadhipok’s Institute



Developing Relationships among Executives’ course (Batch 9), Directorate of Civil Affairs, The Royal Thai Army (RTA.)


2008-Present Program Director, M.S. in Management, School of Business Administration,

College of Internet Distance Education, Assumption University

2007-Present Lecturer, M.S. in Management, School of Business Administration


2007-Present Thesis/Dissertation Defense Committee and Chairperson, M.S. in Management, School of Business Administration,


2007-Present Thesis/Dissertation Adviser,

M.Sc. in Management, School of Business Administration



-

Attachment

Page 181

Name of Director,



RATCH Shareholding

(%)


Work Experiences


8. Mr. Poonsuk Tochanakarn

Director


Corporate Governance and Social Responsibility Committee Member

(EGAT’s Representative Director)


Since 1 October 2013

60 Bachelor of Accounting, Chulalongkorn University


Certificate of Executive Finance Management Program, Economics and Finance Academy

Certificate of the Public Director Certification Program, Public Director Institute from King Prajadhipok’s Institute and State Enterprise Office in collaboration with office of the Public Sector Development Commission

EGAT Senior Executive Program (ESEP)

EGAT Director Development Program (EDDP)

EGAT Newly-Promoted Executive Orientation Program (ENOP)

Changes and Challenges

EGAT Preparation of Professional Leader Program (EPLP)

EGAT’s Executive Development Program (EEDP)



2012-2014 Deputy Governor - Account and

Finance acting Chief Financial Officer (CFO)

EGAT

2011-2012 Assistant Governor-Account EGAT

2010-2011 Assistant Governor-Internal

Audit Bureau EGAT

2007-2010 Director, Development Area

Accounting and Budget Division EGAT

Attachment

Page 182

Name of Director,



RATCH Shareholding

(%)


Work Experiences


9. Miss Rattana Tripipatkul




Since 29 March 2013

64 Bachelor of Economics, Ramkhamhaeng University

Certificate, Advanced Audit Committee Program (AACP 15/2014), Thai Institute of Directors Association

Certificate, Audit Committee Program (ACP 45/2013), Thai Institute of Directors Association

Certificate, Director Accreditation Program, (DAP 58/2006), Thai Institute of Directors Association

Certificate, National Security Management for Senior Executives Course (Class 4), National Defence College

Certificate, Political Government in Democracy Regime Program for Senior Executive, (Class 15) King Prajadhipok’s Institution

Certificate, Capital Market Academy, (Class 19)

Certificate, Thailand Energy Academy Program, (Class 4)

Certificate, Institute Of Metropolitan Development, (Class 3)


2014-Present Executive Director P.O.C. Phoenix Golf and Country Club Pattaya Company Limited

2014-Present Executive Director Phoenix Land Development Company Limited

2006-Present Board of Directors Member P. Overseas International Group

Company Limited

2006-Present Board of Directors Member P.O.C. Concrete Company

Limited

2006-Present Board of Directors Member P. Overseas Steel Public

Company Limited

2005-Present Executive Director Customer Services, P. Overseas

Steel Public Company Limited

2005-Present Executive Director Customer Services, P.O.C.

Concrete Company Limited

2005-Present Executive Director Customer Services, P. Overseas

International Group Company Limited

2006-2014 Board of Directors Member P Blue Lagoon Gems Company

Limited

2006-2014 Managing Director, P Blue Lagoon Gems Company

Limited

Attachment

Page 183

Name of Director,



RATCH Shareholding

(%)


Work Experiences


10. Mr. Suwit Kongsaengbhak




Since 29 March 2013

54 Master of Law, Ramkhamhaeng University

Barrister at laws, The Thai Bar Association Under the Royal Patronage

Bachelor of Law, Ramkhamhaeng University


2010-Present Board of Directors Member Pornpiyacharn Transport Company Limited

2010-Present Managing Director SLC Law Company Limited


-

Attachment

Page 184

Name of Director,



RATCH Shareholding

(%)


Work Experiences


11. Mr. Rum Herabat

Director


Investment Committee Member




58 Bachelor of Engineering (Mechanical Engineering), Chulalongkorn University


Certificate of Advanced Management Program, Harvard Business School, U.S.A.

Certificate of Army War College Regular, Institute of Advanced Military Studies

Leading into the Future Under Strategic Inflection of Change




EGAT Assistant Director Development Program (EADP)

EGAT’s Executive Development Program (EEDP)

7,446

(0.0005%)

None Other Positions at Present

2014-Present Deputy Governor-Generation EGAT (1)


2013-2014 Deputy Governor-Fuel EGAT

2012-2013 Board of Directors Member EGAT Diamond Service Co., Ltd.

2011-2013 Assistant Governor-Operation

and Maintenance Business EGAT

2010-2011 Director, Civil Maintenance

Division EGAT

2007-2010 Director, Mechanical

Maintenance Division EGAT


Attachment

Page 185


Age (years)


RATCH Shareholding

(%)


Work Experiences


12. Mr. Sutat Patmasiriwat

Director




61 Bachelor of Engineering (Mechanical Engineering), Chulalongkorn University

Certificate, Advanced Management Program, Harvard Business School, U.S.A.

Certificate, Financial Statements for Directors (FSD 14/2011), Thai Institute of Directors Association

Certificate, The Role of Chairman (RCP 24/2010), Thai Institute of Directors Association


Certificate, Senior Executive Development Program-2, Foundation for International Human Resource Development

Certificate, Creating Value Through Product Management and Customer Profitability, SASIN Graduate Institute of Business Administration, Chulalongkorn University

Certificate, ASEAN Executive Development Program, Thammasat Business School, Thammasat University

None None Previous Working Experiences

2011-2013 Board of Directors Chairman EGAT International Company Limited

2010-2014 Board of Directors Chairman Ratchaburi ElectricityGenerating Company Limited and Ratchaburi Power Company Limited

2010-2013 Board of Directors Member Ratchaburi Electricity Generating

Holding Public Company Limited

2009-2013 Board of Directors Member EGAT

2009-2013 Governor EGAT

2010-2011 Board of Directors Chairman EGAT Diamond Service Company

Limited

2009-2010 Board of Directors Member EGAT International Company

Limited

2008-2009 Deputy Governor-Generation EGAT

Attachment

Page 186

Name of Director,



RATCH Shareholding

(%)


Work Experiences


13. Mr. Chuan Sirinunporn

Director



Since 19 December 2014

61 Honorary Doctorates Degree, Ubon Ratchathani Rajabhat University

Honorary Doctorates Degree, Ubon Ratchathani University

Master Development Administration (Honors), The National Institute of Development Administration

Bachelor of Arts (Political Science), Chulalongkorn University


Certificate, Thai Senior Executive Development Program, National Graduate Institute for Policy Studies (GRIPS), Japan

Certificate, Transformational Executive Leadership, Prince Damrongrajanubhab Institute of Research and Development, Ministry of Interior

Diploma, The National Defence Course, National Defence College

Graduate Diploma in Public Law, Thammasat University

Certificate, Senior Executive Development Program, Institute of Administration Development


2014 - Present Board of Directors Member EGAT


2012-2013 Director General of Department

of Provincial Administration

2011-2012 Governor of Nakhon

Ratchasima

2010-2011 Governor of Phrae

2007-2010 Governor of Ubon Ratchathani

Attachment

Page 187

Name of Director, Management

/ Position Age (years)


RATCH Shareholding

(%)


Work Experiences


14. Mr. Witoon Kulcharoenwirat

Director




61 Master of Engineering in Safety Engineering, Kasetsart University

Master of Engineering in Transportation Engineering, Chulalongkorn University

Bachelor of Engineering (Civil Engineering), Chiang Mai University

Certificate, National Defence College of Thailand’s Diploma,Class 52, National Defence College of Thailand (2009)

Certificate, The Civil Service Executive Program for Senior Civil Servants, Class 43, Office of the Civil Service Commission (2005)


2014-Pesent Director-General, Department of Energy Business

Ministry of Energy


2012-2013 Disaster Prevention and

Mitigation Commission - Consultant

House of Representatives

2003-2013 Committee Member and Assistant Secretariat of the Hazardous Substance Control Committee

Ministry of Industry

2003-2014 The National Environment Board of Directors Member with specialization in petroleum development projects, pipeline transportation of fuel and thermal power stations

Attachment

Page 188

Name of Director,



RATCH Shareholding

(%)


Work Experiences


15. Mr. Pongdith Potchana

Director

Chief Executive Officer


(EGAT’s Representative Director and Executive Director)


Since 1 July 2013

59 Master of Engineering (Civil Engineering), The Georgia Institute of Technology, U.S.A.

Bachelor of Engineering (Civil Engineering), Chiangmai University



Certificate, Public Law and Management Class 10 (2011), King Prajadhipok’s Institute






2014-Present Board of Directors Chairman Ratchaburi Electricity Generating Company Limited (2)

2013-Present Board of Directors Chairman Hongsa Power Company Limited (3)

2013-Present Board of Directors Chairman Phu Fai Mining Company Limited (3)

2013-Present Board of Directors Chairman RATCH-Australia Corporation

Limited (2)

2013-Present Board of Directors Member Ratchaburi Power Company

Limited (3)


2013 Board of Directors Member Ratchaburi Electricity Generating

Company Limited

2012-2013 Deputy Governor - Corporate

Social Affairs and Acting EGAT Spokesman

EGAT

2012 Assistant Governor - Corporate

Social Affairs EGAT

2010-2012 Assistant Governor - Corporate

Social Responsibility EGAT

2008-2010 Director, Corporate

Communications Division EGAT


Attachment

Page 189


Age (years)


RATCH Shareholding

(%)


Work Experiences


16. Mr. Peerawat Pumthong

Chief Business Development Officer 1

Date of Appointment :

1 March 2014

56 Master of Business Administration, Monash University,Australia, (Certificate of Merit (Highest score ) in International Business)

Master of Engineering, Asian Institute of Technology (AIT) (Germany Government Scholarship)

Bachelor of Engineering (2nd Class Honor), Khonkaen University

Advanced Certificate Course in Politics and Governance

in Democratic Systems for Executives (Class 17), King Prajadhipok’s Institute

Certificate, Advanced Course in Public Economics (Class 8), King Prajadhipok’s Institute


Certificate, ASEAN Executive Development Program (AEDP), Thammasat Business School, Thammasart University

Certificate, Mini MBA, Chulalongkorn University

Certificate, Electric Power Development from Swedish Board of Investment and Technical Support (BITS), Sweden

Certificate, ASEAN Executive Program, General Electric International Operation Company, Inc., U.S.A.


Sub-Committee on the Study and Follow-up on Renewable Energy, Committee on Energy, Committee of the National Legislative Assembly

Positions in subsidiaries, affiliates and joint ventures are shown in page 203


2010-2014 Chief Operating Officer Ratchaburi Electricity Generating

Holding PCL.

2006-2010 Executive Vice President -

Business Development Ratchaburi Electricity Generating Holding PCL.


Acting for Managing Director RATCH-Australia Corporation Limited


Company Limited

2010-2013 Board of Directors Member Navanakorn Electricity Generating

Company Limited

2010-2013 Chairman of the Board of

Directors RATCH-Lao Services Company Limited

Attachment

Page 190


Age (years)


RATCH Shareholding

(%)


Work Experiences


16. Mr. Peerawat Pumthong

(Cont.)

Certificate, Hydro Electric Power from Japan International Cooperation Agency (JICA), Columbo Plan, Japan

Certificate, Thermal and Hydro Power Project Planning from Snowy Mountain Engineering Cooperation, Columbo Plan, Australia


2006-2013 Chairman of the Board of Directors

Ratchaburi Energy Company Limited

2010 Chairman of the Board of Directors

Yanhee Solar Power Company Limited

Attachment

Page 191


Age (years)


RATCH Shareholding

(%)


Work Experiences


17. Mr. Kriengrit Jiajanpong

Chief Business Development Officer 2


1 March 2014

59 Bachelor of Science (Electrical Engineering), King Mongkut’s Institute of Technology Thonburi Campus

Excellence in Situation Management Program

Coal Combustion Technology & Ash Forming

Flue Gas Desulfurization Design & Testing Standard, Germany Pollution Control Technology (JAPIC), Japan

Power Plant Availability Workshop, Canada

Electrostatic Precipitation Technology, Japan

Steam Turbine Operation & Maintenance, Japan

Certificate, Director Certification Program (DCP158/2012) Thai Institute of Directors Association

Certificate, Leadership Assessment & Development Program (2013)

Certificate, Leading with the Speed of Trust (2013)

7,500

(0.0005%)




2013-2014 Deputy Chief Executive Officer Ratchaburi Electricity Generating

Holding PCL.

2012 Executive Vice President Ratchaburi Electricity Generating

Holding PCL.


Managingb Director Ratchaburi Electricity Generating Company Limited

2013-2014 Board of Directors Member Ban Bueng Power Company

Limited

2013-2014 Board of Directors Member Eastern IPP Company Limited

2013-2014 Board of Directors Member Eastern Power Generation

Company Limited

2013-2014 Board of Directors Member Tri Energy Company Limited


Directors Solarta Company Limited

2013-2014 Board of Directors Chairman Sustainable Energy Corporation

Limited

Attachment

Page 192


Age (years)


RATCH Shareholding

(%)


Work Experiences


17. Mr. Kriengrit Jiajanpong

(Cont.)


2013-2014 Board of Directors Chairman Khao Kor Wind Power Company Limited

2013-2014 Board of Directors Chairman Ratchaburi Energy Company Limited


Executive Committee Member South East Asia Energy Limited


Executive Committee Member Nam Ngum 2 Power Company Limited

2013-2014 Board of Directors Chairman RATCH-Lao Services Company

Limited


Directors Electricity Generating Authority of Thailand (EGAT)

Ratchaburi Gas Company Limited

2011-2012 Assistant Governor-Operation and Maintenance Business Project Mae Moh Power Plant , EGAT


2007-2010 Director, Maintenance Division Ratchaburi Gas Company Limited

Attachment

Page 193


Age (years)


RATCH Shareholding

(%)


Work Experiences


18. Mr. Somnuk Jindasup

Chief Asset Management Officer

Managing Director, Ratchaburi Electricity Generating Company Limited


1 March 2014

56 Master of Engineering (Electrical Engineering), Chulalongkorn University

Bachelor of Science (Electrical Engineering) (2nd Class Honor), King Mongkut’s Institute of Technology North Bangkok Campus

Certificate, ASEAN Executive Program (2005), General Electric International Operation Company, Inc., U.S.A.

Certificate, Senior Executive Program (2003), SASIN Graduate Institute of Business Administration, Chulalongkorn University

Certificate, Advance Senior Executive Program (2010, SASIN Graduate Institute of Business Administration, Chulalongkorn University)

Certificate, Advanced Mini MBA, Chulalongkorn University

Graduate Diploma in Public Law and Management (2006-2007), King Prajadhipok’s Institute

Certificate, Executive Development Program (2008), Thai Listed Company Association

Certificate, Director Certification Program (DCP 152/2011), Thai Institute of Directors






2013-2014 Senior Executive Vice President, seconded to be the Managing Director of Ratchaburi Electricity Generating Company Limited

Ratchaburi Electricity Generating Holding PCL.

2013 Executive Vice President, seconded to be the Managing Director of Ratchaburi Electricity Generating Company Limited


2011-2013 Executive Vice President, seconded to bem the Managing Director of Tri Energy Company Limited


2006-2011 Executive Vice President, seconded to be the Deputy Managing Director of Ratchaburi Electricity Generating Company Limited


Attachment

Page 194


Age (years)


RATCH Shareholding

(%)


Work Experiences



(Cont.)


2014 Board of Directors Sustainable Energy Corporation Limited


Sustainable Energy Corporation Limited


Managing Director Tri Energy Company Limited

2009-2013 Board of Directors Member EGAT Diamond Service Company

Limited

2009-2012 Board of Directors Member RATCH-Lao Services Company

Limited

Attachment

Page 195


Age (years)


RATCH Shareholding

(%)


Work Experiences


19. Mr. Wutthichai Tankuranand

Chief Financial Officer


1 January 2012

48 Master of Business Administration, University of Michigan, U.S.A.

Bachelor of Engineering (Electrical Engineering), Chulalongkorn University

Certificate, Leadership Assessment and Development Program (2013)





2014 Board of Directors Member Xe-Pian Xe-Namnoy Power

Company Limited

2013-2014 Board of Directors Member Tri Energy Company Limited

2013-2014 Board of Directors Member Ban Bueng Power Company

Limited

2013-2014 Board of Directors Member Eastern IPP Power Company

Limited

2013-2014 Board of Directors Member Eastern Power Generation

Company Limited


Directors Ratch Udom Power Company Limited

2001-2012 Deputy Chief Financial Officer TrueMove Company Limited

Attachment

Page 196


Age (years)


RATCH Shareholding

(%)


Work Experiences


20. Mr. Prayut Thongsuwan

Executive Vice President - Corporate Administration

Managing Director - Ratchaburi Energy Company Limited

Managing Director, Solarta Company Limited


1 September 2014

56 Master of Public and Private Management, The National Institute of Development Administration

Bachelor of Political Sciences (Public Administration), Thammasat University

Certificate, ASEAN Executive Program, General Electric International Operation Company, Inc., U.S.A.

Certificate, Senior Executive Program, SASIN Graduate Institute of Business Administration, Chulalongkorn University





2010-2012 Executive Vice President Ratchaburi Electricity Generating

Holding Public Company Limited

2006-2010 Executive Vice President-

Corporate Administration Ratchaburi Electricity Generating Holding Public Company Limited

2012-2014 Managing Director Solarta Company Limited

2014 Board of Directors Member Sustainable Energy Corporation

Limited

2014 Board of Directors Member Khao Kor Wind Power Company

Limited


Managing Director Ratchaburi Energy Company Limited

Attachment

Page 197


Age (years)


RATCH Shareholding

(%)


Work Experiences


21. Mrs. Sunee Rajatamutha

Executive Vice President - Finance


1 June 2011

56 Master of Accounting, Thammasat University

Master of Business Administration, Chulalongkorn University

Bachelor of Accounting (2nd Class Honor), Chulalongkorn University



Certificate, Chief Financial Officer, Federation of Accounting Professions

Certificate, Modern Management Program, Chulalongkorn University

Certificate, Leadership Assesment & Development Program (2013)





2010-2011 Senior Vice President, Acting

Executive Vice President - Finance


2009-2010 Chief Financial Officer,

Ratchaburi Power Company Limited

Ratchaburi Electricity Generating Holding PCL

2007-2009 Director, Finance Division




Managing Director Ratch Udom Power Company Limited



Managing Director Ratchaburi Electricity Generating Holding PCL

Attachment

Page 198


Age (years)


RATCH Shareholding

(%)


Work Experiences


22. Mr. Sommai Poosanachakorn

Senior Vice President - Head of Accounting Control and Analysis Division

Date of Appointment : 1 July 2014

49 Master of Public and Private Management, the National Institute of Development Administration

Bachelor of Accounting, Thammasat University

Certificate, Chief Financial Officer, Federation of Accounting Professions







2014 Vice President-Head of

Accounting Control and Analysis Division


2012-2014 Vice President-Head of

Accounting Division Ratchaburi Electricity Generating Holding PCL.

2011-2012 Vice President-Head of Accounting Division, Ratchaburi Electricity Generating Holding Public Company Limited and Acting Deputy Managing Director, Solarta Co., Ltd.


2007-2011 Vice President-Head of

Accounting Division Ratchaburi Electricity Generating Holding PCL.

2009-2012 Board of Directors Member RH International Corporation

Limited

2010-2012 Board of Directors Member RH International (Mauritius)

Corporation Limited

Attachment

Page 199


Age (years)


RATCH Shareholding

(%)


Work Experiences


22. Mr. Sommai Poosanachakorn

(Cont.)


2010-2012 Board of Directors Member RH International (Singapore) Corporation Pte. Limited

2011-2012 Deputy Managing Director Solarta Company Limited

2007-2011 Board of Directors Member Ratch Udom Power Company

Limited

2007-2011 Board of Directors Member Ratchaburi Alliances Company

Limited

Attachment

Page 200


Age (years)


RATCH Shareholding

(%)


Work Experiences


23. Miss. Raywadee Srikongyos

Senior Vice President - Head of Financial Planning and Management Division


1 January 2014

56 Master of Public and Private Management, The National Institute of Development Administration

Bachelor of Business Administration (Finance) (1st Class Honor), Thai Chamber of Commerce University


Certificate, Fixed Income Primer Program, Lehman Brothers




2010-2013 Vice President - Head of

Treasury Division Ratchaburi Electricity Generating Holding PCL.

2008-2010 Vice President - Office

Management Ratchaburi Electricity Generating Holding PCL.

2011-2014 Board of Directors Member Ratchaburi Gas Company Limited

2012-2013 Board of Directors Member Ratch Udom Power Company

Limited

2013-2014 Vice President, seconded to

be the Chief Finance Officer Ratchaburi Power Company Limited

Attachment

Page 201


Age (years)


RATCH Shareholding

(%)


Work Experiences


24. Mrs. Nisaluck Mungpalchol

Vice President - Head of General Accounting Division

Date of Appointment : 1 March 2014

46 Master of Science (Information Technology Management), King Mongkut’s Institute of Technology Ladkrabang

Master of Science (Managerial Accounting), Chulalongkorn University

Bachelor of of Accountancy (Accounting) (1st Class Honor), Kasetsart University

CFO Certification Program Class 13, Federation of Accounting Professions

Mini MBA, Kasetsart University




2014 Vice President and Acting

Manager-Head of Affiliates Accounting Department


2011 Senior Manager-Head of

Affiliates Accounting Department


2011 Senior Manager-Head of Corporate Finance Department Tri Energy Company Limited


2009 Senior Manager, seconded

to be Director-Finance & Accounting


Attachment

Page 202


Age (years)


RATCH Shareholding

(%)


Work Experiences


25. Mrs. Supatra Thongkarn

Vice President - Head of Tax Management Division Acting Deputy Managing Director - Administration, Accounting and Finance, Solarta Co., Ltd.

Date of Appointment : 1 May 2013

54 Bachelor of Accountancy, Chulalongkorn University

Mini MBA, Thammasat University

Certificate, Tax Controller Major in International Tax,School of Tax

4,000

(0.0003%)




2014 Vice President - Head of

Tax Management Division Ratchaburi Electricity Generating Holding PCL.

2013-2014 Vice President - Head of

Treasury Division Ratchaburi Electricity Generating Holding PCL.

2012-2013 Vice President, seconded to be the Chief Financial Officer, Xe-Pian Xe-Namnoy Power Co., Ltd.


2011-2012 Senior Manager, Head of

Tax Management Department


2010-2011 Manager, Head of

Management Accounting and Budgeting Department


2006-2010 Manager, Head of Affiliate

Accounting and Tax Management Department


Attachment

Page 203

Information about Directorship of Directors, Executives and Controllers of the Company, Subsidiaries, Jointly-Controlled Entities and Affiliates Ratchaburi Electricity Generating Holding Public Company Limited as of 31 December 2014

Attachment

Page 204

Attachment

Page 205

Attachment 2 Information of subsidiaries's Executives



Age (years)


RATCH Shareholding

(%)


Work Experiences


1. Mrs. Siriporn Luangnual

Director

Date of Appointment

24 April 2007 – Present

55 Master of Business Administration, Pittsburg State University, USA.

Bachelor of Business Administration, Ramkhamhaeng University

New Wave Leadership Development Program, Office of the Civil Service

Promotional of Capital Market, Korea Stock Market, South Korea

Certificate, Directors Certification Program (DCP72/2006), Thai Institute of Directors Association

Financial and Accounting for Non-Financial Manager, The Wharton School

TLCA Executive Development Program (EDP4) , Thai Listed Companies Association


Present Deputy Director State Enterprise Policy Office, Ministry of Finance

2014-Present Board of Directors Member TOT Public Company Limited


2008-2010 Director of Bureau of State

Enterprise and Evaluation State Enterprise Policy Office, Ministry of Finance

2010-2011 Director of the Office of

State Securities State Enterprise Policy Office, Ministry of Finance

2002-2006 Board of Directors Member Ratchaburi Energy Company

Limited

2011-2012 Board of Directors Member TOT Public Company Limited

2011-2013 Board of Directors Member

and Audit Committee Chairman

ASEAN Potash Mining Public Company Limited

2013-2014 Board of Directors Member The Erawan Group Public Company

Limited

Attachment

Page 206


Age (years)


RATCH Shareholding

(%)


Work Experiences


2. Mr. Amnuay Thongsathitya

Director

Date of Appointment 17 March 2010 - Present

61 PhD Candidate, University of Kassel, German

Post Grad. Cert. Alternative Energy, University of Florida, USA

Master Degree, Energy Technology, King Mongkut's University of Technology Thonburi

Bachelor's Degree, Electrical Engineering, King Mongkut's University of Technology North Bangkok

Certificate Senior Executive Fellows, Harvard University, USA

Certificate, the Civil Service Executive Program for Senior Civil Servants (Class 44), Office of the Civil Service Commission

Diploma, The National Defence Course (Class 49), National Defence College

Local Development Administration for Sustainability, Class 1, King Prajadhipok's Institute


Present Retired government officer


Director General Department of Alternative Energy

Development and Efficiency, Ministry of Energy(4)

Chief Inspector General Ministry of Energy (4)

Deputy Director General Department of Alternative Energy Development and Efficiency,Ministry of Energy (4)

Director of Energy Research

Bureau Department of Alternative Energy Development and Efficiency,Ministry of Energy (4)

Director of Solar Energy

Development Bureau Department of Alternative Energy Development and Efficiency,Ministry of Energy (4)

Director of Energy Research

Bureau Department of Alternative Energy Development and Efficiency,Ministry of Energy (4)

Board of Directors Member Energy For Environment Foundation

Board of Directors Member EGAT International Co., Ltd. (1)

Attachment

Page 207


Age (years)


RATCH Shareholding

(%)


Work Experiences


2. Mr. Amnuay Thongsathitya (Cont.)


Director, Renewable Energy Cluster Working Group

National Science and Technology Development Agency

Director, Academic Energy Inspector General

National Research Council of Thailand

Director, Rattanakosin

College for Sustainable Energy and Environment

Rajamangala University of Technology Rattanakosin

Notes (1) Major Shareholder (2) Subsidiary Company (3) Joint Venture Company (4) Energy Enterprise

Attachment

Page 208


Age (years)


RATCH Shareholding

(%)


Work Experiences


3. Mr. Chumphon Thitayaruks

Director

Date of Appointment 19 March 2013 - Present

59 Master of Political Science (Public Administration)

Bachelor of Engineering (Civil)

Executive Training (Class 1), Department of Public Works

Advance Engineering Management Training (Class 2), Department of Public Works

Visual Education, USA, Public Works Department

Visual Education, USA, according to the Executive MBA Program, Thammasat University

Administration officer Training Program (Class 45), Ministry of Interior

Visual Education, Europe, Senior Executive Development Program Class 45, Ministry of interior

Visual Education, Denmark, Ministry of Energy

Senior Executive Program (the Civil Service Commission), Class 50

Visual Education, Germany

Site Visit, Nuclear Re-processing Plant, Japan

Executive Program, Good Governance (Office of the Public Sector Development Commission 1)

Visual Education, Norway


Present Chief-Inspector General Ministry of Energy (4)


2013-2014 Deputy Permanent Secretary Ministry of Energy (4)

2009-2013 Inspector General, Chief

Inspector Gernaral Ministry of Energy (4)

2003-2009 Director of Energy Region 10 Energy Office Region 10 (4)

2002-2003 Director of Regional Energy

Office Energy Office Region 10 (4)

1992-2002 Civil Energineer PrachinBuri ,

Chachoengsao , Nong Khai , Rayong, Chiang Rai Province

Ministry of Interior

1987-1992 Civil Engineer Chumphon

Province Ministry of Interior

Attachment

Page 209


Age (years)


RATCH Shareholding

(%)


Work Experiences


4. Mr.Athipat Bamroong

Director

Date of Appointment

19 March 2013 - Present

57 Doctor of Laws, Kobe University, Japan

Master of Economics, Kobe University, Japan

Bachelor of Economics Kobe University, Japan

Senior Executive Program, Office of the Civil Service Commission

Diploma, National Defence College, The National Defence Course Class 2010


Present Inspector General Office of the Permanent Secretary, Ministry of Energy (4)


-

Attachment

Page 210


Age (years)


RATCH Shareholding

(%)


Work Experiences


5. Mr. Teerawit Charuwat

Director

Date of Appointment 19 March 2013 – Present

56 Ph.D. Candidate, Doctoral degree International Programs, Development Administration Program in Policy and Management, National Institute of Development Administration (NIDA)

Master of Finance (MIF), International Program, Thammasat University (2013)

Master of Business Administration (MBA), Chulalongkorn University (1993)

Master Degree in Energy Management and Policy, University of Pennsylvania, USA (1985) (under a scholarship from the U.S. government)

Bachelor of Engineering, Mechanical Engineering, Chulalongkorn University (1979)

Certificate, Audit Committee Program ACP 11/2006, Thai Institute of Directors Association

Certificate, Directors Accreditation Program DAP 43/2005, Thai Institute of Directors Association

Certificate, Director Certification Program (Class 67/2005), Thai Institute of Directors Association

Diploma Course in Public Economics Management for Senior Executives, King Prajadhipok's Institute (2008)


2003-Present Associate Judge (Class 4,7,10) The Central Intellectual Property and International Trade Court


1980-1984 Mechanical Engineer EGAT (1)

1985-1988 Planning Engineer Unocal Thailand Company

Limited (4)

1989-1990 Assistant Manager - Planning Ektanakij Finance Public

Company Limited

1991-1999 Assistant Managing Director Ek Holding Public Company

Limited

2000-2001 Assistant Managing Director Patchara Insurance Public

Company Limited

2001-2003 Deputy Managing Director –

Planning Thai Petrochemical Industry Public Company Limited (4)

2003-2004 Chief Financial Officer : CFO MCOT Public Company Limited

2005-2006 Chief Executive Officer : CEO TOT Public Company Limited

2006 Chairman ACT Mobile Company Limited

2007-2008 Executive Director And Acting

Director Software Industry Promotion Agency (Public Organization) (SIPA)

Attachment

Page 211


Age (years)


RATCH Shareholding

(%)


Work Experiences


6. Mr. Suthon Boonprasong

Director

Date of Appointment 1 January – 31 December 2013

57 Master of Business Administration , Chiang Mai University

Bachelor of Economics Sukhothai Thammathirat Open University

Bachelor of law, Ramkhamhaeng University

Bachelor of Engineering (Electrical Engineering), Chulalongkong University


Certificate, Advanced Management Program, Harvard Business School, USA

Advanced Certificate, Public Economics Management for Executives , King Prajadhipok's Institute

Certificate, Senior Command Course (Class 27), Institute of Police Administration Development

Masterful Coaching Workshop, Hay Group

Financial for Executive Decision Program, Continuing Education Center, Chulalongkorn University

Coaching for Success

Leading into the Future Under Strategic Inflection of Change Common Strategy for the Asia Pacific Region : Regional Arrangement for the Emerging Challenges, Thailand National Defence College


Present Deputy Governor, Transmission System

EGAT (1)


2010-2013 Assistant Governors,

Transmission System EGAT (1)

2010 Assistant Governors,

Corporate Social Affairs and Environment

EGAT (1)

2012-2013 Board of Director District Cooling System and

Power Plant Company Limited (DCAP)

Attachment

Page 212


Age (years)


RATCH Shareholding

(%)


Work Experiences


6. Mr. Suthon Boonprasong (Cont.)

EGAT Newly-Promoted Executive Orientation Program (ENOP), EGAT

EGAT Senior Executive Program (ESEP), EGAT

Incoming Successor Program (ISP)

Senior Executive Development Program (Class 2), Foundation for International Human Resource Development

EGAT’s Executive Development Program (EEDP), EGAT

EGAT Director Development Program (EDDP), EGAT

Attachment

Page 213


Age (years)


RATCH Shareholding

(%)


Work Experiences


7. Mr. Kornrasit Pakchotanon

Director

Date of Appointment 1 January – 31 December 2013

56 Bachelor of Engineering (Mechanical Engineering, Chulalongkorn University

Diploma Course in Public Economics Management for Senior Executives, King Prajadhipok’s Institute

Advanced Certificate Course in Strengthening Peaceful Society, King Prajadhipok’s Institute


Present Deputy Governor, Business Development

EGAT (1)


2011 Assistant Governors,

Generation 3 EGAT (1)

2008 Director, Maintenance

Department, Bang Pakong Power Plant

EGAT (1)

Attachment

Page 214


Age (years)


RATCH Shareholding

(%)


Work Experiences



Chief Asset Management Officer

Managing Director, Ratchaburi Electricity Generating Company Limited


1 March 2014

56 Master of Engineering (Electrical Engineering), Chulalongkorn University

Bachelor of Science (Electrical Engineering) (2nd Class Honor), King Mongkut’s Institute of Technology North Bangkok Campus

Certificate, ASEAN Executive Program (2005), General Electric International Operation Company, Inc., U.S.A.

Certificate, Senior Executive Program (2003), SASIN Graduate Institute of Business Administration, Chulalongkorn University

Certificate, Advance Senior Executive Program (2010, SASIN Graduate Institute of Business Administration, Chulalongkorn University)


Graduate Diploma in Public Law and Management (2006-2007), King Prajadhipok’s Institute

Certificate, Executive Development Program (2008), Thai Listed Company Association

Certificate, Director Certification Program (DCP 152/2011), Thai Institute of Directors






2013-2014 Senior Executive Vice President, seconded to be the Managing Director of Ratchaburi Electricity Generating Company Limited


2013 Executive Vice President, seconded to be the Managing Director of Ratchaburi Electricity Generating Company Limited


2011-2013 Executive Vice President, seconded to bem the Managing Director of Tri Energy Company Limited


2006-2011 Executive Vice President, seconded to be the Deputy Managing Director of Ratchaburi Electricity Generating Company Limited


Attachment

Page 215


Age (years)


RATCH Shareholding

(%)


Work Experiences



(Cont.)


2014 Board of Directors Sustainable Energy Corporation Limited


Sustainable Energy Corporation Limited


Managing Director Tri Energy Company Limited

2009-2013 Board of Directors Member EGAT Diamond Service Company

Limited

2009-2012 Board of Directors Member RATCH-Lao Services Company

Limited

Attachment

Page 216


Age (years)


RATCH Shareholding

(%)


Work Experiences


9. Mr. Pongdith Potchana

Director

Chief Executive Officer


(EGAT’s Representative Director and Executive Director)


Since 1 July 2013

59 Master of Engineering (Civil Engineering), The Georgia Institute of Technology, U.S.A.

Bachelor of Engineering (Civil Engineering), Chiangmai University



Certificate, Public Law and Management Class 10 (2011), King Prajadhipok’s Institute






2014-Present Board of Directors Chairman Ratchaburi Electricity Generating Company Limited (2)

2013-Present Board of Directors Chairman Hongsa Power Company Limited (3)

2013-Present Board of Directors Chairman Phu Fai Mining Company Limited (3)

2013-Present Board of Directors Chairman RATCH-Australia Corporation

Limited (2)

2013-Present Board of Directors Member Ratchaburi Power Company

Limited (3)



Company Limited

2012-2013 Deputy Governor - Corporate

Social Affairs and Acting EGAT Spokesman

EGAT

2012 Assistant Governor - Corporate

Social Affairs EGAT

2010-2012 Assistant Governor - Corporate

Social Responsibility EGAT

2008-2010 Director, Corporate

Communications Division EGAT

Attachment

Page 217


Age (years)


RATCH Shareholding

(%)


Work Experiences


10. Mr. Payat Chinvili

Director, Operating Division

Date of Election: 1 April 13- Present

47 Bachelor of Industrial Technology in Industrial Instrumentation Tech. King Mongkut's Institute of Technology

Master of Business Administration ( Finance and Banking) Ramkhamhaeng University


-


2012 Acting, Director, Operating

Division Ratchaburi Electricity Generating Company Limited.

2006 Senior, Manager, Planning and

Maintenance Department Ratchaburi Electricity Generating Company Limited.

2004 Manager, Engineering and

Efficiency Control Department Ratchaburi Electricity Generating Company Limited.

2000 Planning and Maintenance

Office Ratchaburi Electricity Generating Company Limited.

Engineering , System Control, Burning and Steam Production. Control forces and Equipment, Electric Maintenance Departmen

Electricity Generating Authority of Thailand.

Attachment

Page 218


Age (years)


RATCH Shareholding

(%)


Work Experiences


11. Mr. Nutaporn Srisingha

Director,Coporate Relations Division

Date of Election: 1 Jan 09- Present

58 B.A. ( Political Science) Ramkhamhaeng University Bangkok

Diploma in Project Management and Project Administration, Akademie Klausenhof, Germany


-


2007 Director of the Public Relation

Department, Ratchaburi Power Plant


Chief of General Administration National Health Security Office

(NHSO), Thailand ( Phitsanulok )

Attachment

Page 219


Age (years)


RATCH Shareholding

(%)


Work Experiences


12. Mr. Somboon Kositvanit

Director, Administration and Finance Division

Date of Election: 1 June 2009- 31 December 2014

56 M.A (Accounting) Thammasat University

MINI MBA ( Kasetsart University)

B.B.A. (Accounting) Ramkhamhaeng University

Certificate CFO ( Federations of Accounting Professions)

Accounting Auditor ( CPA) ID No.5698

Certificate of Senior Executive Program

Sasin Graduate Institute of Business Administration of Chulalongkorn University


-


2007 Director, Accounting and

Finance Division Tri Energy Company Limited.

2003 Manager, Management

Accounting and Budgeting Department

Ratchaburi Electricity Generating Company Limited.

2000 Manager,Accounting

Department Ratchaburi Electricity Generating Company Limited.

1999-2000 Accountant Level 9, Accounting Department Demand Size Management Division Head of Financial Accounting Demand Size Management Division

Electricity Generating Authority of Thailand. (EGAT)

1994-1999 Head of Account and Treasury

Rayong Combined Cycle Power Plant Construction Project

EGAT

Attachment

Page 220


Age (years)


RATCH Shareholding

(%)


Work Experiences


13. Mr. Pornchai Chamnongdet

Director, Administration and Finance Division

Date of Appointment: 1 January 2015-Present

54 Master of Public Administration, National Institute of Development Administration

Bachelor of Law, Thammasat University


Certified Professional Internal Auditor, Institute of Internal Auditors of Thailand

Certificate, Pre-Certified Internal Auditor, Chulalongkorn University

Certificate, Chief Financial Officer, the Federation of Accounting Professions

Certificate, Modern Management Program , Chulalongkorn University


-


2008-2009 Assistant Vice President-

Internal Audit Division Ratchaburi Electricity Generating Holding Public Company Limited

2006-2008 Manager-Head of Risk

Management Department Ratchaburi Electricity Generating Holding Public Company Limited

2003-2006 Manager - Head of Internal

Audit Department Ratchaburi Electricity Generating Holding Public Company Limited

Internal Audit Officer Level 9 Electricity Generating Authority of

Thailand

Attachment

Page 221

Attachment

Page 222

Attachment

Page 223

Attachment

Page 224

Attachment 3 Information of Chief internal auditor and Chief of compliance unit


Age (years)


RATCH Shareholding

(%)


Work Experiences


Mr. Pornchai Chamnongdet

Vice President - Head of Internal Audit Division

54 Master of Public Administration, National Institute of Development Administration



Certified Professional Internal Auditor, Institute of Internal Auditors of Thailand

Certificate, Pre-Certified Internal Auditor, Chulalongkorn University

Certificate, Chief Financial Officer, the Federation of Accounting Professions

Certificate, Modern Management Program , Chulalongkorn University


-


2008-2009 Assistant Vice President-

Internal Audit Division Ratchaburi Electricity Generating Holding Public Company Limited

2006-2008 Manager-Head of Risk

Management Department Ratchaburi Electricity Generating Holding Public Company Limited

2003-2006 Manager - Head of Internal

Audit Department Ratchaburi Electricity Generating Holding Public Company Limited

Internal Audit Officer Level 9 Electricity Generating Authority of

Thailand

Attachment

Page 225


Age (years)


RATCH Shareholding

(%)


Work Experiences


Mr. Nawapol Disathien

Vice President - Head of Legal Division

Company Secretary

44 Master of Law (International Legal Studies), Golden Gate University, USA


Certificate in Public Law, Faculty of Law, Thammasat University

Certificate, Senior Executive Program, Sasin Graduate Institute

of Business Administration of Chulalongkorn University


2011 - Present Senior Vice President - Head of Legal Division


2014 - Present Board of Directors Member RICI International Investment Company Limited

2011 - Present Board of Directors Member Songkla Biomass Company Limited

and Songkhla Biofuel Company Limited

2010 - Present Board of Directors Member RH International (Mauritius) Corporation Limited and RH International (Singapore) Corporation Pte. Limited

2009 - Present Board of Directors Member RH International Corporation

Limited


2006 - 2011 Vice President - Legal

Division Ratchaburi Electricity Generating Holding PCL

Attachment

Page 226

Attachment 4 Information of Appraised value of assets

None

Attachment

Page 227

Attachment 5 Others

None

annual registration statement report form 56-1 for the

Documents