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Annual registration statement

As of December 31, 2009

Electricity Generating Public Company Limited

Content

Page

Part 1 Executive Summary 1

Part 2 Listed company 2 Section 1 Risk Factors 11 Section 2 Business Characteristic 20 Section 3 Operation of Business Line 32 Section 4 Research and Development 57 Section 5 Operational assets 58 Section 6 Future projects 63 Section 7 Dispute 65 Section 8 Capital Structure 66 Section 9 Management 70 Section 10 Internal Control 115 Section 11 Connected Transaction 118 Section 12 Financial Status and Operational Results 125 Section 13 Others 147

Part 3 The Certification of Information

Attachment 1 CV of the Management and the Control Persons Attachment 2 The positions of the Management and the Control Persons Attachment 3 Audit Committee’s Report

Glossary 1. Companies The Company, EGCO, We Electricity Generating Public Company Limited Group companies, EGCO Group

Electricity Generating Public Company Limited and its subsidiaries and joint venture companies.

AE Agro Energy Company Limited APMC Alto Power Management Corporation BLCP BLCP Power Limited CHC, Conal Conal Holdings Corporation East Water Eastern Water Resources Development and Management Public

Company Limited EGAT Electricity Generating Authority of Thailand EGCO BVI EGCO International (BVI) Limited EGCO Cogen EGCO Cogeneration Company Limited EGCO Green EGCO Green Energy Company Limited Egcom Tara Egcom Tara Company Limited ESCO EGCO Engineering and Service Company Limited GCC Gulf Cogeneration Company Limited GEC, Gulf Gulf Electric Public Company Limited GECC General Electric Capital Corporation GEN Gulf Energy Company Limited GIPP Gulf IPP Company Limited GPG Gulf Power Generation Company Limited GYG Gulf Yala Green Company Limited KEGCO Khanom Electricity Generating Company Limited NED Natural Energy Development Company Limited NKCC Nong Khae Cogeneration Company Limited NMPC Northern Mindanao Power Corporation NTPC Nam Theun 2 Power Company Limited OneEnergy OneEnergy Thailand Limited PGS Power Generation Services Company Limited QPL,Quezon Quezon Power (Philippines) Limited Company REGCO Rayong Power Plant Roi-Et Green Roi-Et Green Company Limited SCC Samutprakarn Cogeneration Company Limited SPPC Southern Philippines Power Corporation TLPC Thai LNG Power Corporation Limited WMPC Western Mindanao Power Corporation 2. Government Organizations EPPO Energy Policy and Planning Office IEAT Industrial Estate Authority of Thailand NEPC National Energy Policy Council PWA Provincial Waterworks Authority SEC Securities and Exchange Commission, Thailand SET Stock Exchange of Thailand 3. Other Institutions IOD Thai Institute of Directors JBIC Japan Bank for International Corporation 4. Technical Terms COSO The Committee of Sponsoring Organization of the Treadway

Organization IPP Independent Power Producer SPP Small Power Producer

PDP Thailand Power Development Plan

Part 1 Executive Summary

Page 1

Part 1 Executive Summary

The Notification of the Capital Market Supervisory Board No. Tor Jor 11/2009 Re: Criteria, Conditions and Procedures of Reporting Disclosure of Financial Status and Results of Business Operations of Issuance Companies dated March 13, 2009 revoked this part.

Part 2 Listed Company

Page 2

Part 2

Listed Company

1. EGCO Information

Name : Electricity Generating Public Company Limited (EGCO)

Business : Holding Company focusing on power business and other related business

Registration : 0107537008666 ( Previously Number Listed Co. 333)

Sector : Energy and Utilities

Industry : Resources

Registered Capital : 5,300 million baht

Paid up Capital : 5,246.65 million baht

Par Value : 10 baht

Foreign Limit : 44.81%

% of Free Float : 43.17% as of March 9, 2010

Head Office : EGCO Tower, 222 Moo 5, Vibhavadi Rangsit Rd., Tungsonghong, Laksi, Bangkok 10210, Thailand.

Home Page : http://www.egco.com

Tel. : 66 0 2998-5000

Fax : 66 0 2955-0956-7

Board of Directors : Email address : [email protected]

Corporate Secretary : 0 2998-5021-5

Email address : [email protected]

IR Contact : 0 29985145-7

Email address: [email protected]


Page 3

2. Referenced Persons

Regulator Securities and Exchange Commission, Thailand 93/1 15th Floor, Diethelm Towers B, Wireless Road, Lumpini, Patumwan Bangkok 10330, Thailand Tel 66 0 2695-9999 Corporate Affairs Department ext. 6008, 9509 E-mail: [email protected] Website: www.sec.or.th

Regulator The Stock Exchange of Thailand 62 The Stock Exchange of Thailand Building, Ratchadaphisek Road, Klongtoey, Bangkok 10110, Thailand Tel 66 0 2229-2000, 0 2654-5656 Fax. 66 0 2229-2030, 0 2654-5649 S-E-T Call Center 66 0 2229-2222

E-mail: [email protected] Website: www.set.or.th

Share and Debenture registrar Thailand Securities Depository Company Limited 62 The Stock Exchange of Thailand Building, Ratchadaphisek Road, Klongtoey, Bangkok 10110, Thailand Tel 66 0 2229-2800 Fax. 66 0 2359-1259 Call Center 0 2229 2888 E-mail: [email protected] Website: www.tsd.co.th

Auditor 1. Ms. Nangnoi Charoenthaveesub Certified Public Accountant (Thailand) No. 3044 2. Mr. Prasan Chuaphanich

Certified Public Accountant (Thailand) No. 3051

3. Mr. Somchai Jinnovart Certified Public Accountant (Thailand) No. 3271 PricewaterhouseCoopers ABAS Limited 15th Floor, Bangkok City Tower, 179/74-80 South Sathorn Road, Bangkok 10120, Thailand Tel 66 0 2286-9999, 66 0 2344-1000 Fax. 66 0 2286-5050


Page 4

3. General Information Company Business Registered

Share Capital (Million Baht)

Par Value (Baht)

Paid-up Share Capital (Million Baht)

Ownership Interest

(Direct+Indirect) (%)

Electricity Generating Public Company Limited (EGCO) Registration 0107537000866 (No.BorMorJor.333)

Head Office 14th, 15th Floor EGCO Tower, 222 Moo 5,

Vibhavadi Rangsit Road, Tungsonghong,

Laksi, Bangkok 10210, Thailand

Tel. 66 0 2998-5000

Fax 66 0 2955-0956-9

Rayong Power Plant

Bangkok Office 12th Floor, EGCO Tower

Tel. 66 0 2998-5999

Fax 66 0 2955-0931

Rayong Office 35 Rayong Highway No. 3191

Huay Pong District, Amphur Muang,

Rayong 21150, Thailand

Tel. 66 0 3868-1012, 66 0 3868-1016,

66 0 3868-1020

Sector Energy & Utilities

Industry Resources

Foreign Limit 44.81%

Share of Minor Shareholder (% Free Float) 51.90%

Website www.egco.com

Holding Company focusing on Power

business and others related to power

business

Independent Power Producer (IPP)

Electricity Generating and supply

business

5,300 10 5,264.65 -


Page 5

Subsidiaries Company

Business Registered


Par Value (Baht)


Ownership Interest


Khanom Electricity Generating Company Limited (KEGCO)

Office 12th Floor, EGCO Tower

Tel. 66 0 2998-5000

Fax 66 0 2955-0932

Site Office 112 Moo 8,

Tongnean District, Amphur Khanom

Nakhon Sri Thammarat 80210,

Thailand

Tel. 66 0 7552-9173, 66 0 7552-

9179

Fax 66 0 7552-8358

IPP


business

5,000 10 4,850 99.99

EGCO Engineering & Service Company Limited (ESCO)


Tel. 66 0 2998-5000

Fax 66 0 2955-0933

Site Office 35 Rayong Highway No. 3191

Huay Pong District, Amphur Muang,


Tel. 66 0 3868-2611-4

Fax 66 0 3868-2823

Engineering, operation and maintenance

services for power plants and

manufacturers

400 10 400 99.99

EGCO International (B.V.I.) Limited (EGCO B.V.I.)

Office EGCO Tower

Tel. 66 0 2998-5000

Fax 66 0 2955-0956-9

Oversea office Romasco Place, Wickhams Cay 1,

PO Box 3140, Road Town,

Tortola, British Virgin Islands

Holding company focusing on investment

in electricity generating companies in

foreign countries

11.65 /1

(350,000 USD)

33.2867 /1

(1 USD)

11.65 /1

(350,000 USD)

100

EGCO Cogeneration Company Limited (EGCO Cogen)


Tel. 66 0 2998-5000

Fax 66 0 2955-0956-9


Mabkha District,Amphur Nikhom

Phattana


Tel. 66 0 3863-7051-8

Fax 66 0 3863-7063

Small Power Producer (SPP)

Electricity and steam generating and

supply business

1,060 10 1,060 80


Page 6

Company Business Registered


Par Value (Baht)


Ownership Interest


EGCO Green Energy Company Limited (EGCO Green)

Office EGCO Tower

Tel. 66 0 2998-5000

Fax 66 0 2955-0956-9

Holding company focusing on power

business

175 10 175 74

Roi-Et Green Energy Company Limited (Roi-Et Green)

(EGCO Green is the company’s 95.00% shareholder)


Tel. 66 0 2998-5000

Fax 66 0 2955-0956-9


Nua-Muang District, Amphur Muang

Roiet 45000, Thailand

Tel. 66 0 4351-9825-6

Fax 66 0 4351-9827

SPP utilizing Biomass as primary fuel 180 10 180 70.30

Agro Energy Company Limited (AE)

(ESCO is the company’s 99.99% shareholder)

Office EGCO Tower

Tel. 66 0 2998-5000

Fax 66 0 2955-0956-9

Trading/delivery service of fuel from

natural scrap

2 10 2 99.99

Egcom Tara Company Limited (ET)

(ESCO is the company’s 70.076% shareholder)


Tel. 66 0 2998-5000

Fax 66 0 2955-0945

Site office

- Plant 1 332 Moo 2, Pongsawai District,

Amphur Muang

Ratchburi 70000, Thailand

- Plant 2 250 Moo 1, Pangpuay District,

Amphur Damneansaduak

Ratchburi 70130, Thailand

Piped water generating and supply

business

345 10 345 70.076


Page 7

Joint Ventures:



Par Value (Baht)


Ownership Interest


Gulf Electric Public Company Limited (GEC)

Office 11th FL., M. Thai Tower I,

All Seasons Place, 87 Wireless Road,

Lumpini, Phathumwan,

Bangkok 10330, Thailand

Tel. 66 0 2654-0155

Fax 66 0 2654-0156-7

Website http://www.gulfelectric.co.th

Holding company focusing on IPP and

SPP

14,000 10 13,784.35 50

Gulf Power Generation Company Limited (GPG)

(GEC is the company’s 100% shareholder) Site office 64 Moo 2 Ban Pa District, Amphur Kaeng Khoi, Saraburi 18110, Thailand Tel. 66 0 3624-8305 Fax. 66 0 3624-8314, 66 0 3625-1344

Independent Power Producer (IPP)


business

9,607 10 9,607 50

Gulf Cogeneration Company Limited (GCC)

(GEC is the company’s 100% shareholder) Site office 79 Moo 3 Tandeow District, Amphur Kaeng Khoi, Saraburi 18110, Thailand Tel. 66 0 3624-6531 Fax 66 0 3624-8020



supply business

850 10 850 50

Nong Khae Cogeneration Company Limited (NKCC)

(GEC is the company’s 100% shareholder) Site office 111/11 Moo 7 Nongplamor District, Amphur Nong Khae, Saraburi 18140, Thailand Tel. 66 0 3637-3676 Fax 66 0 3637-3691



supply business

1,241.72 74 1,241.72 50

Samutprakarn Cogeneration Company Limited (SCC)

(GEC is the company’s 100% shareholder) Site office 745 Moo 2 Bang Pu Mai District, Amphur Muang, Samutprakarn 10280, Thailand Tel. 66 0 2709-0751 Fax 66 0 2709-1842



supply business

981.54 76 981.54 50

Gulf Yala Green Company Limited (GYG)

(GEC is the company’s 100% shareholder) Site office 80 Moo 1, Pron District, Amphur Muang, Yala 95160, Thailand Tel. 66 0 7325-2721 Fax 66 0 7325-2722

SPP utilizing Biomass as primary fuel 460 10 460 50


Page 8


Share Capital

(Million Baht)

Par Value (Baht)

Paid-up


Ownership Interest

(Direct+Indirect)

(%)

Conal Holding Corporation (Conal)

(EGCO B.V.I. is the company’s 40% shareholder)

Office EGCO Tower

Tel. 66 0 2998-5000

Fax 66 0 2955-0956-9

Oversea office 2286 Alsons Building,

Pasong Tamo Extension,

Makati City, Philippines

Tel. 816-6740, 892-4632

Fax 814-0625

Holding company focusing on power

business in the Philippines

569.28 /2

(800,000,000

PESO)

71.16 /2

(100 PESO)

569.28 /2

(800,000,000

PESO)

40

Alto Power Management Corporation (APMC)

(Conal is the company’s 60% shareholder)

Oversea office 2285 Solid House Building,



Tel. 812-0294

Fax 812-1005

Operation and maintenance

services for power plants and consulting

14.23 /2

(20,000,000

PESO)

71.16 /2

(100 PESO)

7.11 /2

(10,000,000

PESO)

24

Western Mindanao Power Corporation (WMPC)

(Conal is the company’s 44% indirect shareholder)




Tel. 812-0294

Fax 812-1005

Site office Sitio Malasugat, Sangali,

Zamboanga City, Philippines

IPP


business

355.80 /2

(500,000,000

PESO)

71.16 /2

(100 PESO)

321.36 /2

(451,600,000

PESO)

17.6

Southern Philippines Power Corporation (SPPC)

(Conal is the company’s 44% indirect shareholder)




Tel. 812-0294

Fax 812-1005

Site office Bo. Baluntay, Alubel,

Sarangani, Philippines

IPP


business

213.48 /2

(300,000,000

PESO)

71.16 /2

(100 PESO)

196.76 /2

(276,500,000

PESO)

17.6


Page 9


Share Capital

(Million Baht)

Par Value (Baht)

Paid-up


Ownership Interest

(Direct+Indirect)

(%)

Quezon Power (Philippines), Limited Co. (QPL)

(EGCO B.V.I. is the company’s 26% indirect shareholder)

Oversea office 62 H. dela Costa,

Mauban, Quezon Province,

Republic of Philippines

Site Office Cagsiay 1, Mauban

Quezon Province, Philippines

IPP


business

147.76 /2

(207,641,268

PESO)

147.76 /2

(207,641,268

PESO)

26

BLCP Power Limited (BLCP)

(Since January 30, 2007)

Office No. 9, I-8 Road,

Map Ta Phut Industrial Estate,

Amphur Map Ta Phut,


Tel. 66 0 3892-5100,

Fax. 66 0 3892-5199

IPP


business

12,000 100 12,000 50

Power Generation Services Company Limited (PGS)

Office No. 9, I-8 Road,

Map Ta Phut Industrial Estate,

Amphur Map Ta Phut,


Operation and Maintenance of BLCP 10 100 10 50

Nam Theun 2 Power Company Limited (NTPC)

Office Unit 9, Tat Luang Road

Nongbone Village, P.O. Box 5862

Vientiane, Lao PDR

Tel. (856-21) 263 900

Fax (856-21) 263 901

IPP


business

14,979.01 /1

450,000,000

USD Million

3,328.67 /1

100

USD

11,748.31 /1

352,942,975

USD Million

25

Natural Energy Development Co., Ltd (NED)

Office 45/F The Offices at Central World

999/9 Rama 1 Road, Patumwan


Feasibility study on Renewable Energy

project in Thailand

24 10 24 33.33

Other:


Page 10



Par Value (Baht)


Ownership Interest

(%) Eastern Water Resources Development and Management Public Company Limited (EASTW) Office 9/9 Vibhavadi Rangsit Road,

Talad Bangkhen, Laksi


Tel. 66 0 2940-9974-6

Fax 66 0 2561-3793

Website www.eastwater.com

Water resources development and

management for supplying raw water to

the customers

1,665 10 1,299.69 18.72

Note : The Exchange rate as at December 30, 2009 /1, /3 1 USD = Baht 33.2867

/2 1 PESO = Baht 0.7116

Part 2 Section 1 Rick Factors

Page 11

Risk Factors To create long term value for shareholders, EGCO recognizes the importance of

properly analyzing and managing its business risks. The Board of Directors entrusted the

Audit Committee to review the Company’s risk management policies, implementation

and reporting. The Risk Management Committee has been set up at the Management

level which comprises of EGCO’s top executives and the Managing Directors of EGCO

subsidiaries. EGCO’s President serves as the chairman of the Committee. Rayong Power

Plant and subsidiaries such as KEGCO, and ESCO also have their own risk management

committees to help ensure that their particular risks will be managed adequately.

The Board of Directors has included the risk management policy in a Risk Management

manual which serves as a guideline for the EGCO Group. In 2009, EGCO Group

reviewed its risk management system which include risk appetites and risk rating

categories along with the review of the overall risk profile to be consistent with the

approved EGCO Group’s strategic plan. The Board of Directors will together consider

and provide recommendation on the Company’s risk management. The Audit

Committee also considered fraud risk and requested a report from the Management on

its policies to look for and address fraud risk management which included the likelihood,

prevention and remedial actions.

A summary of key risk factors and associated mitigation measures is as follows:

1. New Development Project Risk

EGCO is a holding company. Its main source of its income is dividends from

subsidiaries and joint ventures under long term Power Purchase Agreements (PPA) with

EGAT. Failure to add new assets to its portfolio either through greenfield development

or acquisition will affect EGCO’s long-term outlook.

1.1 Risks from New Project Development

EGCO plans to expand its investment in order to maintain continuous growth, both in

Thailand and in foreign countries. To achieve this objective, EGCO has analyzed and

identified the key risks involved. These include the relative economic performance,


Page 12

financial market strengths and weaknesses, and key business risks including competition,

graft in the industry, production costs, environmental and social/health impacts, changes

in laws and relevant regulations as well as political risk.

In light of these risk factors, EGCO’s strategy to cope with these business conditions is

to thoroughly analyze project data and conducting feasibility work and due diligence in

accordance with relevant investment guidelines and in constant communication with the

Company’s Executive Committee to ensure that each invested project is suitable for the

EGCO Group.

1.2 Country Risk

In light of the intense and growing domestic competition in the well served Thai market

and the vast growth opportunities for the power sector in less well served neighboring

country markets, EGCO is seeking to increase its investment primarily in Asean

countries and also in Africa and the Middle East through ESCO.

For investments in foreign countries, each target country macroeconomic, industrial

status, political, economic, social policies along with relevant laws and regulations will be

thoroughly analyzed to ensure that the project risk is acceptable in advance of any

investment and during the investment holding period. Where possible and commercially

feasible, political risks may be mitigated by securing political risk insurance and related

coverage.

1.3 Risks from PPA expiration (Rayong Power Plant)

On October 1, 2009, REGCO and its key contracts/business were consolidated into

EGCO. REGCO’s PPA will expire on December 7, 2014. There is a provision in the

PPA that offers a possibility for REGCO and EGAT to negotiate an extension of the

PPA. Such negotiation may commence with EGAT and the relevant authorities not less

than 2 years but not longer than 4 years before the PPA’s expiry date.

To improve the chance of extending the PPA or rebuilding the facility, EGCO has

conducted feasibility studies to gain supporting information to propose to relevant

government authorities for consideration. To ensure that the staff at the Rayong Power


Page 13

Plant are well prepared, skills development for staff have been continuously carried out.

Learning new technologies, and studying the conditions of other IPPs’ power purchase

agreements have been undertaken as well.

As the plant has been maintained properly and regularly, the plant can be operated

effectively at least 10 years after current PPA’s expiration, however being of 1980s

vintage, it may be necessary to upgrade the technology with the best 21st century

technology to ensure the facility is clean and efficient enough to be accepted by the

public and the relevant authorities.

The strengths of the Rayong Power Plant have been confirmed as follows:

• Having event free track record and good relation with the community

• Environment Impact Assessment (“EIA”) in place and sufficient space for a new

unit within the existing campus to allow for the building of new plant technology

• The efficiency improvement of the Plant can reduce NOx emissions by 19%

compare with figure of EIA approval

• Location of Rayong Power Plant close to industrial factories in the eastern seaboard

which reduce power loss from source to destination

• Automatic Fuel Transfer from natural gas to diesel during plant operation can be

executed in case of emergency gas shortage

• Ability to quickly execute EGAT’s restoration plan in case of brown out using black

start emergency diesel

2. Project Construction Risk

Nam Theun 2 (“NT 2”) is currently undergoing commissioning. NT 2 has entered into

the long-term Power Purchase Agreement (“PPA”) with EGAT and the Government of

Laos. The scheduled commercial operation date is in March 2010. Major risks of project

under construction/commissioning are project construction delay and cost overrun. The

two risks can lead to negative impact on the return on investment and delay the revenue

recognition of such project.

During the commissioning period, the technical problems were found at some partial

load settings. In order that the plant to be handed over to EGCO and other


Page 14

shareholders is in acceptable condition at all power settings, NTPC and its contractors

are continuing to monitor the plant as it is brought to the Commercial Operation Date

(“COD”) and seeking to make modifications where necessary.

Due to such problems, the COD is delayed for about 3 months from the original

schedule of December 2009 and NT 2 will be liable to penalties by EGAT under the

PPA. However, there is also a liquidated damage provision in the agreement with the

Head Contractor which covers the fine that NT2 has to pay to EGAT. Consequently, the

negative impact on NT 2 Project’s return on investment is expected to be minimal.

3. Operational Risks

3.1 Risk of Failure to Get Target Return on Investment

EGCO has the responsibility to properly monitor and manage plant operations in order

to reach or exceed targeted return on investment. Typical measures imposed to mitigate

relevant risks are as follows:

- Establish asset management policies and, where possible, assign management and

staffs to be EGCO Group representatives’ directors or management of its

subsidiaries and investment projects.

- Set up EGCO’s Asset Management Division to regularly monitor operating

performances of each facility and analyze the actual return on investment against the

planned target.

- Prepare regular progress reports to senior management and the Board of Directors

so that a timely and appropriate action can be taken. The exceptional operating

performance is to be reported as well.

According to the 2008 operating performance report, the incomes from EGCO’s

portfolio have been received in line with modeled results.

3.2 Reliance on the Main Customer Risks

EGCO Group’s business is electricity generation and wholesale sales under PPAs with

EGAT and other national utilities in its neighboring country investments.

EGCO’s largest customer, EGAT, provided 85 % of EGCO’s total revenue in 2009.

Relying heavily on only one main customer may affect main revenue of the Company to


Page 15

the extent that such customer has any difficulty in its own business in the future.

However, this type of risk is considered low as EGAT has the mission to establish the

stability of the country’s electricity energy sector and is the state enterprise with good

reputation and strong financial status.

The reduction of electricity consumption due to economic slowdown does not impact on

EGCO group’s revenue under its existing PPAs. The main part of revenue under the

PPA, comprising Availability Payments and Energy Payments, is Availability Payments.

Revenue from Energy Payments is nonmaterial.

3.3 Plant Performance Risks

A commitment to generate and deliver electricity pursuant to a PPA with EGAT entails

the following performance risks:

(1) Plant Efficiency

There are various efficiency benchmarks under a PPA with EGAT i.e., Equivalent

Availability Factor (EAF) and Heat Rates. Failure to meet these performance

requirements would result in penalties and potential termination in certain extreme cases.

With consistent, professional maintenance being a policy in place for each of EGCO

Group’s power plants, this risk is considered to be low. Despite that, the management

has established systematic procedures to ensure that all relevant performance targets are

met. These procedures are as follows:

- Include the key plant efficiency parameters in the Corporate Key Performance

Indicators of power plants in the EGCO group in order to ensure that the

production efficiency is closely monitored and all employees take part in the plant

efficiency.

- Set up Early Warning Systems for critical information regarding the plant operation

processes.

- Ensure that the scheduled preventive maintenance of power plant equipment is

carried out on a regular basis by qualified staff.

- Ensure that spare part inventory is adequate and well managed.


Page 16

- Implement the Quality Management System (ISO: 9001:2000) to ensure that those

power plants operate in accordance with the terms of their PPAs

- Continuously develop the competencies of the firms’ human resources.

(2) Raw Water Shortage for Electricity Generating

The risk of a raw water shortage can result in plant stoppages, revenue shortfall, or

penalty payments. Although EGCO Group has never before experienced any water

shortage in the past 3-4 years, the measures are set to prevent and mitigate such risks by

increasing the raw water storage capacity, seeking additional sources of raw water supply

and setting measures to maximize the benefit of water usage.

(3) Fuel Shortage for Electricity Generating

The risks of a fuel shortage for electricity generating can result in plant stoppages,

revenue shortfall or penalty payments. From the past record, the fuel shortage is

considered to be low and a responsible unit is assigned to continuously monitor the fuel

supply status.

EGCO Group’s gas fired power plants have long term Gas Supply Agreements with

PTT, except for Rayong Power Plant and KEGCO which EGAT is the gas supplier

under the terms of their PPAs. The quantity and quality of natural gas and other key

parameters are all specified in the relevant agreements. With PTT and/or EGAT being

the main suppliers, the risks of fuel gas shortage is considered low.

With regard to BLCP which is a coal fired power plant, a long term Coal Supply &

Transportation Agreement has been entered into with Australian Coal Holdings Pty Ltd.

(“ACH”). ACH is obliged to supply coal with the quantity and quality as specified in the

agreement. In case of ACH’s failure to supply coal, BLCP may purchase coal from other

suppliers. The increased expenditure occurred will be responsible by ACH. However,

BLCP continuously monitors and maintains a sufficient amount of reserve coal at site

and through long-term arrangements with potential alternative suppliers to ensure the

adequacy supply under the terms of the PPA.


Page 17

Biomass power plants which use rice husk and Para wood chip as fuel may face the fuel

risk in terms of inadequate supply and volatile pricing. This is because those agricultural

products may have alternative uses in the market. Since long term fuel supply agreements

can not be established as there are few creditworthy suppliers of such feedstock, the

primary risk prevention measures are to reserve more fuel and to seek alternative fuel

sources in surrounding areas. This mitigation measures can help manage the fuel price at

a certain level. However, the biomass fuel is still a seller’s market. It should be noted that

the revenue from biomass power plants such as Roi Et Green accounts for 2 % of 2009

revenue from EGAT. As such, the impact of the inadequate of such fuel on EGCO’s

revenue is very low.

(4) Safety Health and Environment

EGCO realizes that the electricity generating process which uses natural gas and coal as

primary fuels will have certain impacts on the safety, environment and quality of life of

surrounding communities. Consequently, EGCO has taken the following actions to

mitigate any potential negative impacts and reduce the likelihood of such risks as follows:

- Develop Safety, Health and Environment (“SHE”) Management Manual for all

EGCO owned plant to follow.

- Prepare the work manuals and emergency plan, implement training plan and testing

of plan, equipment and warning system while ensuring strict compliance with the

manual.

- Develop a list of governing laws and regulations and designate responsible person to

monitor the compliance with related laws.

- Monitor and ensure the compliance with SHE Management Manual

(5) Accident, Resistance, and Sabotage

Accident may cause fire. In addition, EGCO business may subject to the community

resistance if the generation process has negative impact on the community. Besides,

power plant may also be the sabotage target.

Management is well aware of the above risks and set the following measures to mitigate

and reduce the likelihood of those risks.


Page 18

• Strongly encourage employees to prudently discharge their duties with the belief

that carelessness may lead to significant damages.

• Periodically maintain all equipment as scheduled to ensure that they can work

efficiently.

• Strengthen relationship with surrounding communities to foster the right

perception about EGCO business.

• Set the security plan with regular drills and provide equipment such as closed

circuit TV.

• Secure the insurance policy that covers all risks, machinery breakdown, business

interruption and third party liability to assure that assets and personnel will be

properly and adequately protected and the damages will be recovered even in an

unexpected case. The insurance policy on terrorist attack is also procured for

some power plants in EGCO Group.

4. Financial Risk

The investments of EGCO Group are capital-intensive. Since the primary funding

sources are loans from domestic and international bank loan markets, foreign exchange

rate fluctuation and interest rate fluctuation, are important risks to be monitored and

mitigated. Failure to do so could possibly lead to a decline in the group’s operating

performance. Therefore, the mitigation measures are established as follows:

4.1 Foreign Exchange Rate Fluctuation

EGCO Group has a policy to mitigate currency mismatches for each of its investment

projects to prudent levels. In general, this is achieved by matching currencies of project

development and construction costs with funding source currencies and subsequently

matching the currency of long-term funding profiles with those of each project’s revenue

stream during the operation phase.

However, if the portions of foreign currency (US Dollar) of revenue and expenses are

not matched, it may have an unexpectedly negative or positive impact on EGCO in case

of the depreciation or appreciation of Thai Baht against US Dollar occurred. For

example, if the proportion of US Dollar indexed electricity revenue is higher than the US


Page 19

Dollar denominated debt, Thai baht appreciation will result in lower net cash. Therefore,

EGCO Group in certain cases has used a “Revenue Swap” as an instrument to mitigate

foreign exchange rate fluctuation risk. As a consequence, the Group’s revenues are

stable and can be projected accurately.

4.2 Interest Rate Fluctuation

EGCO Group has a policy to manage risk of interest rate fluctuation by using financial

hedging instruments (namely interest rate swaps) to fix floating interest rate exposure to

prudent levels in order to provide the most predictable cash flows over its long-term

power purchase contracts. If interest rate fixtures are not available for the full project

terms required, EGCO would seek to enter into or cause its project company’s to enter

into financial instruments that can best mitigate the interest rate risks subject to market

availability and cost.

As of December 31, 2009, most of EGCO Group’s loan floating interest rate was already

fixed.

Part 2 Business Characteristics

Page 20

2. Business Characteristics

2.1 Background and Major Development EGCO is the first independent power producer in Thailand incorporated on May 12, 1992 by Electricity Generating Authority of Thailand (“EGAT”). Such incorporation marked the commencement of the Thai government’s privatization initiatives to allow broader private sector investment in the electricity generating sector. EGCO was transformed into a public company on March 23, 1994 and listed on the Stock Exchange of Thailand (SET) on January 16, 1995. On November 4, 1997, the Cabinet endorsed the National Energy Policy Council’s resolution to bolster the private sector’s role in energy business, thereby EGAT was to reduce its shareholding in EGCO by divesting part of the shares to strategic investors under the condition that EGAT and EGCO would allow strategic investors to increase their shareholding in EGCO in the future through either direct purchase from EGAT or purchase of newly issued shares. On June 30, 1998, CLP Power International Limited, engaging in energy business in the Asian region and being a subsidiary of CLP Holdings Limited which is listed on Hong Kong Stock Exchange, won the bid to purchase EGCO’s 78 million shares or 14.92% from EGAT, which were later on July 23, 1998 transferred by the latter to CLP Power Projects (Thailand) Limited which engages in energy business in Thailand and is also a subsidiary of CLP Power International Limited. As of December 31, 2002, shareholding of EGAT and CLP Power Projects (Thailand) Limited in EGCO accounted for 25.41% and 22.42% respectively.

On March 27, 2006 EGCO informed SET that it was notified by CLP Power Projects (Thailand) Limited (“CLPT”),a major shareholder, holding 22.42 per cent of the total issued share capital of the Company, that CLPT’s major shareholder (namely, CLP Power International Limited) transferred all of its shares in CLPT to OneEnergy Limited, which, on March 23, 2006, became a joint venture vehicle owned by CLP Holdings Limited and Mitsubishi Corporation on a 50:50 basis.

2.2 Overall picture of business operation

EGCO is a holding company with investment in power generation and supply as well as other related business. The holding structure has enabled EGCO to set up subsidiaries, which funds can be raised for new projects without any impact on the existing projects. Consequently, it is convenient for EGCO to expand its business and manage each of its portfolio. This will enhance the efficiency of each subsidiary with clarity in financial management and performance reporting. As a holding company. EGCO recognizes revenue from dividend income and profit sharing of investment in subsidiaries and joint ventures which operate in electricity generation and distribution business to EGAT and industrial users under the long term power purchase agreements (PPA). Its portfolio also covers the investment in related energy business.

The major responsibilities of EGCO as a holding company are business development, strategic and policy planning which includes human resources management, accounting and budgeting, and public relations of EGCO’s group. Besides, EGCO has also rendered internal audit and legal services to its


Page 21

subsidiaries which mainly undertake responsibilities on the power generation and sale, service provision, and operation and maintenance.

2.3 Business Lines

EGCO businesses can be divided into 4 groups as follows:

1. Independent Power Producer (“IPP”) Group: This Group comprises 4 companies being

Rayong Electricity Generating Co., Ltd., Khanom Electricity Generating Co., Ltd, BLCP Power

Limited and Gulf Power Generation Co., Ltd. The combined equity MW is 3,528.0 MW which

accounts for 88.63% of EGCO’s total operating asset capacity.

2. Small Power Producer (“SPP”) Group: This Group comprises 6 companies being EGCO

Cogeneration Co., Ltd, Roi Et Green Co., Ltd, Gulf Cogeneration Co., Ltd, Nong Khae

Cogeneration co., Ltd, Samutprakarn Cogeneration co., Ltd and Gulf Yala Green Co., Ltd. The

combined capacity was 293.06 equity MW which represents 7.36% of EGCO’s total operating

asset capacity.

3. Oversea Power Producer Group: This Group comprised 4 companies being Western

Mindanao Power Corporation, Southern Philippines Power Corporation, Quezon Power

(Philippines) Limited Co. in the Philippines and NTPC in Lao PDR. The combined equity MW

(excluding NTPC of which the project is under construction) was 159.58 MW representing

4.01% of EGCO’s total operating asset capacity.

4. Other Business Group: This Group comprises 2 operation and maintenance companies being

EGCO Engineering and Service Co., Ltd., and Power Generation Services Co., Ltd. and two

water supply companies being Egcom Tara Co., Ltd., and the Eastern Water Resources

Development and Management Public Co., Ltd.

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

2.4 Revenue Profile

The major source of income is from IPP group. The 2009 net profit before foreign exchange gain

and loss of each business line is as shown below.


Page 22

SPP6%

Overseas9% Others

2%

IPP83%

Remarks: - Profits before FX had separated out foreign exchange impact from EGCO, subsidiaries and joint ventures.- IPP : REGCO, KEGCO, BLCP, GPG - SPP :GCC, SPCC, NKCC, GYG, AEP, APBP, EGCO Cogen, Roi-Et Green - Overseas : Conal, NTPC, Quezon - Others : ESCO, Egcom Tara, NED

Detail of the revenue profile analysis is shown in the Management Discussion and Analysis on page

2.5 Business Target

EGCO focus to continue building upon its portfolio of power generation assets within both the

domestic and ASEAN markets by develop or buy the power plant projects upon the company

investment plan which concern in shareholders’ return maximization under the acceptable level of

risk. In essence, the Company’s corporate vision is:

“To be the leading Thai integrated electric power Company with comprehensive energy

services in Thailand and in the ASEAN region, with full commitment to environment

protection and social development support”

1 Profit before FX shown in the table is different from profit before FX calculated from the consolidated financial statements because the consolidated financial statements show currency exchange gains (losses) of EGCO and Subsidiaries, but not those of joint ventures. The share of profit (loss) from interests in joint ventures is a figure net of currency exchange gains (losses).

2009 Before FX After FX

EGCO (550) (550)IPP 6,680 7,169SPP 516 634Overseas 693 523 Other Business 166 160

Total 7,5051 7,936

Profit before FX – 2009

Unit : Million


Page 23

In this regard, EGCO has identified its key long term objectives as follows:

• Seek to grow at a rate higher than the average growth of electricity demand in our target markets,

• Achieve returns on equity (ROE) above the average of industry in Thailand,

• Create a healthy organization which excels in terms of good corporate governance and

acceptance from the communities.

Table 1. EGCO’s Business Line:

1. IPP Group

1.1 Rayong Electricity Generating Company Limited (“REGCO”)

EGCO accepted the transfer of the entire business of Rayong Generating Co., Ltd. (REGCO), a

wholly owned subsidiary of EGCO, on October 1, 2009. The dissolution of REGCO was

registered with the Department of Business Development, the Ministry of Commerce on

October 2, 2009.

Rayong power plant is the first IPP in Thailand located in Rayong province. It is a 1,232-

megawatt power plant comprising of four identical 308-megawatt combined cycle power blocks

using natural gas as a primary fuel to generate and sell all net electricity output to EGAT under

the 20-year power purchase agreement (“PPA”).

In 2009, Rayong power plant generated and sold 2,952.02 million kilowatt-hours electricity

output to EGAT. Its annual average Equivalent Availability Factor (“EAF”) was 94.73%.

1.2 Khanom Electricity Generating Company Limited (“KEGCO”)

EGCO directly holds a 100% stake in KEGCO which owns and operates Khanom power plant

which is known as the largest independent power plant in the southern area of Thailand located

in Nakhon Sri Thammarat province. It is a 824-megawatt power plant combining of two 75-

megawatt thermal power units and one 674-megawatt combined cycle power unit all using

natural gas as a primary fuel to generate and sell all net electricity output to EGAT under the 15-


Page 24

year and 20-year PPAs.

In 2009, Khanom power plant generated and sold 5,643.41 million kilowatt-hours electricity

output to EGAT. Its annual average EAF was 94.27%.

1.3 BLCP Power Limited (“BLCP”)

EGCO directly holds a 50% stake in BLCP which owns and operates an IPP coal-fired power

plant located in Rayong province. It is a 1,434-megawatt power plant comprises of two identical

717-megawatt pulverized coal-fired power units using high quality bituminous imported from

Australia as a primary fuel to generate and sell all net electricity output to EGAT under the 25-

year PPA.

In 2009, BLCP power plant generated and sold 10,018.13 million kilowatt-hours electricity

output to EGAT, while its annual average EAF were 87.50% for unit 1 and 92.20% for unit 2.

1.4 Gulf Power Generation Company Limited (“GPG”)

EGCO indirectly holds a 50% stake in GPG via its 50% ownership in Gulf Electric Public Co.,

Ltd. (“GEC”). GPG owns and operates an IPP gas-fired power plant, called Kaeng Khoi 2

power plant (“KK2”), located in Saraburi province. It is a 1,510-megawatt power plant

combining of two 755-megawatt combine cycle power blocks using natural gas as a primary fuel

to generate and sell all net electricity output to EGAT under the 25-year PPA.

In 2009, Kaeng Khoi 2 power plant generated and sold 9,329.09 million kilowatt-hour electricity

output to EGAT. The annual average EAF for block 1 and block 2 were 88.43% and 96.31%,

respectively.

2. SPP Group

2.1 EGCO Cogeneration Company Limited (“EGCO Cogen”)

EGCO directly holds an 80% stake in EGCO Cogen which owns and operates a SPP

cogeneration power plant located in Rayong province. It is a 117-megawatt cogeneration power

plant with steam supply of 30 tons per hour. EGCO Cogen can sell both electricity and steam


Page 25

outputs by using natural gas as a primary fuel. Under the SPP firm cogeneration program, it

signed a 60-megawatt contracted capacity with EGAT under the 21-year PPA, while the rest of

capacities were signed with the industrial users in Rayong Industrial Park under the long-term

PPAs.

In 2009, EGCO Cogen power plant generated and sold 672.26 million kilowatt-hour electricity

output to the customers. Its annual average EAF was 92.40% and the steam output to the

industrial user was 49,781 tons.

2.2 Roi-Et Green Company Limited (Roi-Et Green)

EGCO indirectly holds a 70.3% stake in Roi-Et Green via EGCO Green Co.,Ltd. Roi-Et Green

owns and operates an SPP renewable power plant located in Roi-Et province. It is a 9.9-

megawatt biomass-fired power plant using rice husk as a primary fuel. Under the SPP firm

renewable program, it signed an 8.8-megawatt contracted capacity with EGAT under the 21-year

PPA.

In 2009, Roi-Et Green power plant generated and sold 58.34 million kilowatt-hour electricity

output to EGAT, while its annual average EAF was 89.80%.

2.3 Gulf Cogeneration Company Limited (“GCC”)

EGCO indirectly holds a 50% stake in GCC via GEC. GCC owns and operates a SPP

cogeneration power plant located in Saraburi province. It is a 110-megawatt cogeneration power

plant with steam supply of 16 tons per hour. GCC can sell both electricity and steam outputs by

using natural gas as a primary fuel. Under the SPP firm cogeneration program, it signed 90-

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

were signed with the industrial users under the long-term PPAs.

In 2009, GCC power plant generated and sold 680.54 million kilowatt-hour electricity output to

the customers, while its annual average EAF was 91.51% and the steam output to the industrial

user was 171,627 tons.


Page 26

2.4 Nong Khae Cogeneration Company Limited (“NKCC”)

EGCO indirectly holds a 50% stake in NKCC via GEC. NKCC owns and operates a SPP

cogeneration power plant located in Saraburi province. It is a 126-megawatt cogeneration power

plant with steam of 24 tons per hour selling both electricity and steam outputs by using natural

gas as a primary fuel. Under the SPP firm cogeneration program, it signed 90-megawatt

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

with the industrial users under the long-term PPAs.

In 2009, NKCC power plant generated and sold 816.09 million kilowatt-hour electricity output

to the customers, while its annual average EAF was 96.31% and the steam output to the

industrial user was 201,901 tons.

2.5 Samutprakarn Cogeneration Company Limited (“SCC”)

EGCO indirectly holds a 50% stake in SCC via GEC. SCC owns and operates a SPP

cogeneration power plant located in Samutprakarn province. It is a 126-megawatt cogeneration

power plant with steam of 24 tons per hour selling both electricity and steam outputs by using

natural gas as a primary fuel. Under the SPP firm cogeneration program, it signed 90-megawatt

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

with the industrial users under the long-term PPAs.

In 2009, SCC power plant generated and sold 822.18 million kilowatt-hour electricity output to

the customers, while its annual average EAF was 99.14% and the steam output to the industrial

user was 150,471 tons.

2.6 Gulf Yala Green Company Limited (“GYG”)

EGCO indirectly holds a 50% stake in GYG via GEC. GYG owns and operates a SPP

renewable power plant located in Yala province. It is a 23-megawatt biomass-fired power plant

using parawood residue as a primary fuel. Under the SPP firm renewable program, it signed 20.2-

megawatt contracted capacity with EGAT under the 25-year PPA.

In 2009, GYG power plant generated and sold 149.31 million kilowatt-hour electricity output to


Page 27

EGAT, while its plant annual average EAF was 93.69%.

3. Overseas Group

3.1 Conal Holdings Corporation (CHC)

EGCO indirectly holds a 40% stake in CHC via EGCO International (B.V.I.) Ltd., (“EGCO

BVI”). CHC is the largest IPP in the Mindanao Island, Philippines. CHC holds the shares in 2

electricity generating companies and 1 operation and maintenance service company.

Western Mindanao Power Corporation (“WMPC”)

EGCO indirectly holds a 17.6% stake in WMPC via CHC. WMPC owns and operates an IPP

power plant located in Zamboanga city, Philippines. It is a 109.6-megawatt diesel power plant

using a bunker-c fuel oil as a primary fuel. Under the Build-Operate-Own (“B-O-O”) scheme, it

generates and sells all net electricity output to National Power Corporation (NPC) under the 18-

year Energy Conservation Agreement (“ECA”).

In 2009, WMPC power plant generated and sold 219.39 million kilowatt-hours electricity output

to NPC, while its annual average EAF was 85.52%.

Southern Philippines Power Corporation (“SPPC”)

EGCO indirectly holds a 17.6% stake in SPPC via CHC. SPPC operates and owns an IPP power

plant called Gen Santos located in Sarangani province, Philippines. It is a 54.8-megawatt diesel

power plant using bunker-c fuel oil as a primary fuel. Under the B-O-O scheme, it generates and

sells all net electricity output to NPC under the 18-year ECA.

In 2009, SPPC power plant generated and sold 226.14 million kilowatt-hours electricity output to

NPC, while its annual average EAF was 94.38%.

Alto Power Management Corporation (“APMC”)

APMC provides operation and maintenance services including plant management and consulting

to the two above-mentioned power plants and also third-party power plants.


Page 28

3.2 Quezon Power (Philippines), Limited Co. (“QPL”)

EGCO BVI indirectly holds 26% stake in QPL, which owns and operates a 502.5-megawatt

pulverized coal-fired power plant using a high quality coal imported from Indonesia as a primary

fuel. Under the 25-year PPA, QPL generates and sells net electricity output to Manila Electric

Company (“Meralco”), the country's largest power distribution company, and also provides

additional load stability of Luzon power grid.

In 2009, QPL power plant generated and sold 2,723.96 million kilowatt-hours electricity output

to the customer, while its annual average EAF was 83.85%.

3.3 Nam Theun 2 Power Company Limited (“NTPC”)

NTPC has the installed capacity of 1,086.8-megawatt located in Lao PDR. It has an initial

registered capital of USD 1 million. Currently, EGCO holds a 25% stake of NTPC, while EDF

International (a subsidiary of Electricite de France), Laos State Holdings Enterprise (LHSE), and

Italian-Thai Development Public Company Limited own 35%, 25%, and 15%, respectively.

NTPC signed a 25-year Concession Agreement with the Government of Lao PDR on October

3, 2002. NTPC also signed PPAs with EGAT and EDL on November 8, 2003 to supply 995

megawatts to EGAT and additional 75 megawatts to EDL for 25 years after the COD. On April

29, 2004, the project achieved the Financial Close and the first drawdown was on June 15, 2005.

At the end of 2009, the overall project progress was 99.9% which slightly behind than plan. It

was expected that the project could achieve the COD within March 2010.

4. Other Businesses

4.1 EGCO Engineering & Service Company Limited (“ESCO”)

ESCO is EGCO’s wholly owned subsidiary which provides operation, maintenance, engineering

and construction services to power plants, petrochemical plants, oil refineries and other

industries including the Group companies.

4.2 Egcom Tara Company Limited (“ET”)


Page 29

As at December 31, 2009, EGCO holds 70% in ET via ESCO. Under a 30-year agreement, ET

produces tap water according to Thai Industrial Standard (“TIS”) and supplies to the 3 water

stations of the Provincial Waterworks Authority of Thailand (PWA), namely, Lak Muang Water

Station, Damnoen Saduak Water Station and Samut Songkhram Water Station.

4.3 Eastern Water Resources Development and Management Public Company Limited

(“East Water”)

As at December 31, 2009, EGCO holds 18.72% of shares in East Water which is responsible

for developing and operating the main raw water pipe network in the Thailand Eastern

Seaboard area covering 7 provinces namely, Rayong, Chonburi, Chachoengsao, Prachinburi,

Srakaew, Chantaburi and Trad.


Page 30

Revenue Structure of EGCO and Subsidiaries

Product Transaction % 2009 2008 2007**Service Shareholding Revenue % Revenue % Revenue %

Electricity IPP 38.31% 46.39% 46.92%

REGCO/Rayong power plant 99.99%

Capacity Charge 3,674.60 23.30% 3,858.86 25.19% 3,515.63 21.12%

Energy Charge 47.49 0.30% 35.38 0.23% 58.54 0.35%

KEGCO 99.99%

Capacity Charge 2,304.26 14.61% 3,163.53 20.65% 4,034.05 24.23%

Energy Charge 13.55 0.09% 47.15 0.31% 201.11 1.21%

SPP 14.12% 14.47% 12.93%

EGCO Cogen 80.00%

Energy Charge 1,927.49 12.22% 1,934.98 12.63% 1,925.74 11.57%

Roi-Et Green 70.30%

Energy Charge 298.94 1.90% 280.56 1.83% 226.38 1.36%

Service ESCO /1 99.99% 611.41 3.88% 769.84 5.03% 760.24 4.57%

Water Egcom Tara 70.00% 267.33 1.70% 229.37 1.50% 217.71 1.31%

Interest EGCO /2 66.50 0.42% 110.32 0.72% 62.97 0.38%

income REGCO/Rayong power plant /3 99.99% 9.03 0.06% 15.45 0.10% 23.21 0.14%

KEGCO 99.99% 10.15 0.06% 30.77 0.20% 72.34 0.43%

TLPC, EGCO cogen, EGCO Green,

ESCO, Egcom Tara 11.71 0.07% 28.55 0.19% 37.25 0.22%

Others EGCO /4 175.46 1.11% 138.58 0.90% 434.57 2.61%

REGCO/Rayong power plant 99.99% 55.38 0.35% 42.78 0.28% 2.13 0.01%

KEGCO 99.99% 9.34 0.06% 1.09 0.01% 3.38 0.02%

TLPC, EGCO cogen, EGCO Green,

ESCO, Egcom Tara 11.88 0.08% 10.37 0.07% 19.09 0.11%

Share of BLCP 50.00% 3,226.45 20.46% 2,968.89 19.38% 3,906.76 23.47%

profit (loss) GEC 50.00% 2,535.21 16.08% 1,542.26 10.07% 1,227.98 7.38%

EGCO JD (AEP, APBP) 14.85% - 46.96 0.31% 111.53 0.67%

AMESCO 99.99% - 3.68 0.02% 2.29 0.01%

NTPC 25.00% (38.83) (0.25%) (93.53) (0.61%) (249.71) (1.50%)

Conal 50.00% 63.07 0.40% 100.20 0.65% 52.53 0.32%

Quezon 26.00% 498.36 3.16% 50.20 0.33% -

NED 33.33% (10.91) (0.07%) - -

Total revenues (revenues item in consolidated) 15,767.89 100% 15,316.21 100% 16,645.69 100%


Page 31

Notes /1 For year 2009, ESCO's service income was Baht 611,406,512.93 (excluding related party transactions which were the maintenance service income of KEGCO, EGCO Cogen, REGCO/Rayong power plant, Roi-Et Green and Egcom Tara amounted to Baht 247,278,678.96, Baht 81,584,199.98, Baht 77,756,256.91, Baht 31,293,080 and Baht 2,283,336, respectively)

/2 EGCO's interest income for year 2009 was Baht 66,504,576.49 (excluding related party transactions which were interest income fromshareholders' loan from ESCO and REGCO/Rayong power plant amounted to Baht 50,683,658.37 and Baht 32,934,196.76, respectivelyand KEGCO's debenture amounted to Baht 3,724,404.39)

/3 REGCO/Rayong power plant's interest income for year 2009 was Baht 9,028,280.01 (excluding related party transaction which was Baht699,974.40 of KEGCO's debenture)

/4 EGCO's other income for year 2009 was Baht 175,464,384.86 (excluding related party transactions which were office rental and service income from KEGCO, REGCO/Rayong power plant, ESCO, EGCO Cogen, Roi-Et Green, Egcom Tara and EGCO Green amounting to

Baht 26,756,630.08, Baht 19,648,800, Baht 10,299,200, Baht 7,930,905, Baht 7,296,000, Baht 2,502,000 and Baht 831,600, respectively)


Page 32

บจ. พฒันาพลงังานธรรมชาติ/1(เอน็อดี)ี 33.33%Natural Energy Development Co., Ltd. (NED)

บจ. เอก็โก เอน็จเินียริง่ แอนด ์เซอรว์สิ (เอสโก) 99.99%EGCO Engineering & Service Co., Ltd. (ESCO)

บจ.เอก็โก โคเจนเนอเรชัน่ (เอก็โก โคเจน) 80.00%EGCO Cogeneration Co., Ltd. (EGCO Cogen)

บจ. เอก็โก อนิเตอรเ์นชัน่แนล (บวีไีอ)(เอก็โก บวีไีอ) 100.00%EGCO International (BVI) Ltd. (EGCO BVI)

บจ.เอก็โก กรนี เอน็เนอรย์ี ่(เอก็โก กรนี) 74.00%EGCO Green Energy Co., Ltd. (EGCO Green)

บมจ. กลัฟ์อเิลค็ตรกิ (จอีซี)ี 50.00%Gulf Electric Public Co., Ltd. (GEC)

บจ. น้ําเทนิ 2 เพาเวอร ์(เอน็ทพีซี)ี 25.00%Nam Theun 2 Power Co., Ltd. (NTPC)

บมจ. จดัการและพฒันาทรพัยากรน้ําภาคตะวนัออก (อสีท ์วอเตอร)์ 18.72%Eastern Water Resources Development &

Management Public Co., Ltd. (EAST Water)

บจ. บแีอลซพี ีเพาเวอร ์(บแีอลซพี)ี 50.00%BLCP Power Limited (BLCP)

บจ. พลงังานการเกษตร (เออ)ี99.99%Agro Energy Co., Ltd.(AE)

โคแนล โฮลดิง้ คอรป์อเรชัน่ (โคแนล) 40.00%Conal Holding Corporation (Conal)

บจ. รอ้ยเอด็ กรนี (รอ้ยเอด็ กรนี) 95.00%Roi-Et Green Co., Ltd. (Roi-Et Green)

บจ. กลัฟ์ เอน็เนอรย์ี ่(จอีเีอน็) 99.99%Gulf Energy Co., Ltd. (GEN)

บจ. กลัฟ์ โคเจนเนอเรชัน่ (จซีซี)ี 99.99%Gulf Cogeneration Co., Ltd. (GCC)

บจ. หนองแค โคเจนเนอเรชัน่ (เอน็เคซซี)ี 99.99%Nong Khae Cogeneration Co., Ltd. (NKCC)

บจ. สมทุรปราการ โคเจนเนอเรชัน่ (เอสซซี)ี 99.99%Samutprakarn Cogeneration Co., Ltd. (SCC)

บจ. กลัฟ์ ยะลา กรนี (จวีายจ)ี 99.99%Gulf Yala Green Co., Ltd. (GYG)

อลัซงิ เพาเวอร ์โฮลดิง้ (อลัซงิ)80.00%Alsing Power Holding Inc. (Alsing)

นอรธ์เทริน์ มนิดาเนา เพาเวอร์คอรป์อเรชัน่ (เอน็เอม็พซี)ี 64.5%Northern Mindanao Power Corporation (NMPC)

อลัโต เพาเวอร ์เมเนจเมนท ์คอรป์อเรชัน่ (เอพเีอม็ซ)ี 60.00%Alto Power Management Corporation (APMC)

เวสเทริน์ มนิดาเนา เพาเวอร์คอรป์อเรชัน่(ดบับลวิเอม็พซี)ี 55.00%Western Mindanao Corporation (WMPC)

เซาทเ์ทริน์ ฟิลปิปินส ์เพาเวอร์คอรป์อเรชัน่ (เอสพพีซี)ี 55.00%Southern Philippines Power Corporation (SPPC)

การไฟฟ้าฝา่ยผลติแหง่ประเทศไทย (กฟผ) 25.41%Electricity Generating Authority of Thailand (EGAT)

ผูล้งทุนทัว่ไป 52.17%General Public

บจ.วนั เอนเนอจี ้ไทยแลนด ์ลมิิเตด็ 22.42%OneEnergy Thailand Ltd.

เอเอม็พซี ีอนิเตอรเ์นชัน่แนล 100.00%AMPC International Ltd.

บจ. กลัฟ์ เพาเวอร ์เจเนอเรชัน่ (จพีจี)ี 99.99%Gulf Power Generation (GPG)

บจ. กลัฟ์ ไอพพี ี(จไีอพพี)ี 99.99%Gulf IPP Co., Ltd. (GIPP)

จพีไีอ เควซอน 100.00%GPI Quezon Ltd. (GPIQ)

เควซอนเพาเวอร ์ 26.00%Quezon Power (Philippines) Limited Co., (QPL)

บจ. พาวเวอร ์เจเนอเรชัน่ เซอรว์สิส ์ (พจีเีอส) 50.00%Power Generation Services Co., Ltd. (PGS)

บรษิทั ผลติไฟฟ้า จาํกดั (มหาชน)Electricity Generating Public Co., Ltd.

โครงสรา้งการถอืหุน้ของ

กลุ่มบรษิทัผลติไฟฟ้า จาํกดั (มหาชน)

ณ วนัที ่31 ธนัวาคม 2551

บจ. พฒันาพลงังานธรรมชาติ/1(เอน็อดี)ี 33.33%Natural Energy Development Co., Ltd. (NED)

บจ. เอก็โก เอน็จเินียริง่ แอนด ์เซอรว์สิ (เอสโก) 99.99%EGCO Engineering & Service Co., Ltd. (ESCO)

บจ.เอก็โก โคเจนเนอเรชัน่ (เอก็โก โคเจน) 80.00%EGCO Cogeneration Co., Ltd. (EGCO Cogen)

บจ. เอก็โก อนิเตอรเ์นชัน่แนล (บวีไีอ)(เอก็โก บวีไีอ) 100.00%EGCO International (BVI) Ltd. (EGCO BVI)

บจ.เอก็โก กรนี เอน็เนอรย์ี ่(เอก็โก กรนี) 74.00%EGCO Green Energy Co., Ltd. (EGCO Green)

บมจ. กลัฟ์อเิลค็ตรกิ (จอีซี)ี 50.00%Gulf Electric Public Co., Ltd. (GEC)

บจ. น้ําเทนิ 2 เพาเวอร ์(เอน็ทพีซี)ี 25.00%Nam Theun 2 Power Co., Ltd. (NTPC)

บมจ. จดัการและพฒันาทรพัยากรน้ําภาคตะวนัออก (อสีท ์วอเตอร)์ 18.72%Eastern Water Resources Development &

Management Public Co., Ltd. (EAST Water)

บจ. บแีอลซพี ีเพาเวอร ์(บแีอลซพี)ี 50.00%BLCP Power Limited (BLCP)

บจ. พลงังานการเกษตร (เออ)ี99.99%Agro Energy Co., Ltd.(AE)

โคแนล โฮลดิง้ คอรป์อเรชัน่ (โคแนล) 40.00%Conal Holding Corporation (Conal)

บจ. รอ้ยเอด็ กรนี (รอ้ยเอด็ กรนี) 95.00%Roi-Et Green Co., Ltd. (Roi-Et Green)

บจ. กลัฟ์ เอน็เนอรย์ี ่(จอีเีอน็) 99.99%Gulf Energy Co., Ltd. (GEN)

บจ. กลัฟ์ โคเจนเนอเรชัน่ (จซีซี)ี 99.99%Gulf Cogeneration Co., Ltd. (GCC)

บจ. หนองแค โคเจนเนอเรชัน่ (เอน็เคซซี)ี 99.99%Nong Khae Cogeneration Co., Ltd. (NKCC)

บจ. สมทุรปราการ โคเจนเนอเรชัน่ (เอสซซี)ี 99.99%Samutprakarn Cogeneration Co., Ltd. (SCC)

บจ. กลัฟ์ ยะลา กรนี (จวีายจ)ี 99.99%Gulf Yala Green Co., Ltd. (GYG)

อลัซงิ เพาเวอร ์โฮลดิง้ (อลัซงิ)80.00%Alsing Power Holding Inc. (Alsing)

นอรธ์เทริน์ มนิดาเนา เพาเวอร์คอรป์อเรชัน่ (เอน็เอม็พซี)ี 64.5%Northern Mindanao Power Corporation (NMPC)

อลัโต เพาเวอร ์เมเนจเมนท ์คอรป์อเรชัน่ (เอพเีอม็ซ)ี 60.00%Alto Power Management Corporation (APMC)

เวสเทริน์ มนิดาเนา เพาเวอร์คอรป์อเรชัน่(ดบับลวิเอม็พซี)ี 55.00%Western Mindanao Corporation (WMPC)

เซาทเ์ทริน์ ฟิลปิปินส ์เพาเวอร์คอรป์อเรชัน่ (เอสพพีซี)ี 55.00%Southern Philippines Power Corporation (SPPC)

การไฟฟ้าฝา่ยผลติแหง่ประเทศไทย (กฟผ) 25.41%Electricity Generating Authority of Thailand (EGAT)

ผูล้งทุนทัว่ไป 52.17%General Public

บจ.วนั เอนเนอจี ้ไทยแลนด ์ลมิิเตด็ 22.42%OneEnergy Thailand Ltd.

เอเอม็พซี ีอนิเตอรเ์นชัน่แนล 100.00%AMPC International Ltd.

บจ. กลัฟ์ เพาเวอร ์เจเนอเรชัน่ (จพีจี)ี 99.99%Gulf Power Generation (GPG)

บจ. กลัฟ์ ไอพพี ี(จไีอพพี)ี 99.99%Gulf IPP Co., Ltd. (GIPP)

จพีไีอ เควซอน 100.00%GPI Quezon Ltd. (GPIQ)

เควซอนเพาเวอร ์ 26.00%Quezon Power (Philippines) Limited Co., (QPL)

บจ. พาวเวอร ์เจเนอเรชัน่ เซอรว์สิส ์ (พจีเีอส) 50.00%Power Generation Services Co., Ltd. (PGS)

บรษิทั ผลติไฟฟ้า จาํกดั (มหาชน)Electricity Generating Public Co., Ltd.

โครงสรา้งการถอืหุน้ของ

กลุ่มบรษิทัผลติไฟฟ้า จาํกดั (มหาชน)

ณ วนัที ่31 ธนัวาคม 2551

Part 2 Risk Factors

Page 14

Business Paid-up Share Capital

(Million Baht) Owners

hip Interest

(%)

Cost Method(Million Baht)

Other Shareholders

(%)

Subsidiaries

Khanom Electricity Generating Company Limited

IPP- Generating and Supplying electricity 4,850.00 99.99 4,850.00 -

EGCO Cogeneration Company Limited SPP- Generating and Supplying electricity 1,060.00 80.00 891.89 Electric Power Development

Company Limited20.00

EGCO Engineering & Service Company Limited

Engineering, Operation and Maintenance Services for Power Plants and Manufacturers

400.00 99.99 400.00

EGCO International (BVI) Limited Holding Company focusing on investment in foreign electricity generating companies

50,000 USD (2.00 Million Baht 2)

99.99 5,668.33 -

EGCO Green Energy Company Limited

Holding Company focusing on SPP using biomass as fuel

175.00 74.00 129.50 Electric Power Development Company Limited

26.00

Joint Ventures Gulf Electric Public Company Limited Holding Company focusing on IPP and SPP 13,784.35 50.00 6,672.77 Electric Power Development

Company Limited50.00

BLCP Power Company Limited IPP-Generating and Supplying electricity 5,484.40 50.00 9,902.80 Banpu Public Company Limited 50.00 Nam Theun 2 Power Company Limited IPP-Generating and Supplying electricity from hydro

power plant in Laos 134 Million USD

25.00 3,141.15 1. EDF International

2. Lao Holding State Enterprise 3. Italian-Thai Development Public Company Limited

35.00 25.00 15.00

Natural Energy Development Co., Ltd. Development for the renewable energy projects 24.00 33.33 8.00 1. CLP Thailand Renewables Limited

2. Diamond Generating Asia, Limited

33.33 33.33

Power Generation Services Co., Ltd. Operation and Maintenance Services for Power Plants

10.00 50.00 554.84 Banpu Public Company Limited 50.00

Quezon Power (Philippines) Limited Co.

IPP-Generating and Supplying electricity 7,340.00 26.00 4,833.29 1. Covanta Energy Corp.2. InterGen N.V.

45.87 26.13

Others

Eastern Water Resources Development and Management Public Company Limited

Development and Management for supplying raw water to the customers

1,663.73 18.72 1,407.72 Provincial Waterworks Authority 40.20

2 Exchange rate as of investment Date : 1 USD = Baht 39.952886 (July 13& 24, 2000)

Part 2 Section 3 Operation of Business Line

Page 32

3.Operation of Business Line

Since EGCO is a holding company, it has no product. It recognizes revenue from profit sharing of investment in subsidiaries and joint ventures, as well as dividend income from other businesses. EGCO’s business lines comprise the electricity business, service business and water business.

1. Significant Events

As at December 31, 2009, EGCO Group operated 13 power plants with 3,980.64 MW equity.

The power sold to EGAT under a long term PPA was 3,599.60 MW which accounted for

12.32% of the l national installed capacity of 29,212 MW. EGCO’s MW equity in 2009

increased from 2008 by 13.07 MW. Highlights of the events in 2009 were as follows:

1 On March 30, 2009, EGCO International (B.V.I) Ltd. (“EGCO BVI), a wholly owned

subsidiary of EGCO, purchased 100% of the outstanding shares in GPI-I, Ltd. (“GPI-I)

from GPSF Cayman I LDC (“GPSF”). These acquisition provided EGCO BVI with an

indirect ownership in the following portfolio of assets:

a. 10% of shares in GPI Quezon Ltd. (“GPIQ”), an investing holding company, which holds 2.6% stake in Quezon Power (Philippines) Limited Co. (“QPL”), representing capacity of 13.07 MW equity and

b. 13.72% ownership in Northern Mindanao Power Corporation (“NMPC”). As a result, EGCO BVI would own a 25.8% indirect stake in NMPC which was in the liquidation process.

2 On July 30, 2009, EGCO acquired newly issued shares in the Natural Energy

Development Co., Ltd., (“NED”), a company which is dedicated to development of

renewable energy projects in Thailand. EGCO now owns a 33.33% direct stake in NED.

3 EGCO accepted the entire business of Rayong Generating Co., Ltd. (REGCO), a wholly

owned subsidiary of EGCO on October 1, 2009 which was followed by the registration of

REGCO dissolution with the Department of Business Development, the Ministry of

Commerce on October 2, 2009.

4 On December 17, 2009, EGCO purchased a 50% of the ordinary shares of Power

Generation Service Co. Ltd. (“PGS”), a company providing operation and maintenance

services to BLCP power plant under a long term O&M Agreement. EGCO planned to

transfer entire business of PGS to BLCP.

5 The 1,086.8-MW Nam Theun 2 hydropower plant developed by Nam Theun 2 Power

Company Limited (“NTPC”) of which EGCO holds a 25% ownership achieved the


Page 33

overall progress of 95.1% at the end of 2008 which was as planned. The project was

expected to achieve the COD within December 2009 as scheduled.

2. Electricity Business EGCO businesses can be divided into 4 groups namely Independent Power Producer (“IPP”) Group, Small Power Producer (“SPP”) Group, Oversea Power Producer Group and Other Business Group: This Group comprises 2 types of business that is maintenance and operation business and tap water business as the following details. 2.1 Power Energy 2.1.1 Product or Services Electricity business which is considered the core business of the Company comprises the investment in IPP, SPP and the overseas investment. IPP Group Tariff Rate Both companies used the same tariff formula which consists of the following:

a. Capacity payment (in case of REGCO) or availability payment (in case of KEGCO) is a payment, which EGAT pays REGCO and KEGCO on a monthly basis for maintaining the availability of the power plants, regardless of whether the electric power will be supplied to EGAT or not. The capacity payment or the availability payment (as the case may be) will cover financial cost of investment in the power plants, principal repayments and interest, fixed operating and maintenance expenses, administrative expenses, major maintenance cost and internal rate of return on EGCO’s equity.

b. Energy payment is the payment for the actual net electrical output. It covers the variable operating and maintenance expenses.

SPP Group

EGAT also encourages investors to invest in small power plants of which a portion of the generation will be sold to EGAT under the SPP programs. EGCO’s investment in this area comprises the following companies.

Tariff Rate EGAT applies the power tariff formula to the SPPs as follows:

o Capacity payment is based on the monthly contracted capacity and charged on each customer regardless of whether such customer actually buys electricity or not. However, the capacity payment applicable to EGAT is different from that applicable to customers in general. The capacity payment in case of EGAT is based on its long run avoided capacity cost due to its purchase of power from SPPs while that applicable


Page 34

to customers in general is calculated from contracted capacity that will vary to the tariff structure of Provincial Electricity Generating Authority (PEA).

o Energy payment is the actual measured quantity of electricity delivered. Energy

payment charged on EGAT will cover variable operating and maintenance cost while that applicable to customers in general will change according to the tariff structure of PEA.

Overseas Investment Group

Tariff Rate Power tariff to be charged from NPC is divided into four main components as below: - Capital recovery fee is the remuneration payable by NPC to SPPC on a monthly basis.

It covers financial cost of investment in the power plant. - Fixed operation and management fee is the remuneration payable by NPC to SPPC on

a monthly basis. It covers fixed operating and maintenance expenses of the power plant.

- Infrastructure fee is the remuneration payable by NPC to SPPC on a monthly basis. It covers expenses on the transmission system owned by SPPC.

- Energy fee is the remuneration paid for the electricity actually delivered. It covers variable operating and maintenance expenses.

The tariff charged under the specified formula is calculated based on both the USD and the Peso. Unit 1 quotes the tariff in both the US Dollar and the Peso, while unit 2 in the German Mark and the Peso.

In addition to the PPA with EGAT, the Board of Investment also granted the tax privileges to all IPPs and SPP in the Group with significant information as follows:

Salient Privileges 1. Exemption of corporate income tax for net profit from promoted business for eight years

from the first date of income earnings. 2. Exemption of calculating dividend from the promoted business as taxable income

throughout the period of corporate income tax holiday. 3. Reduction of corporate income tax for net profit from investment by 50% of the normal

rate for five years from the date following the end of the corporate income tax holiday.

Conditions: • Having shareholders who are Thai nationals holding shares in an aggregate amount of at

least 51% of the registered capital. • Having registered capital of at least as indicated. • Power plant locating in Rayong province for 15 years from the first date of operation.

Relocation to other areas shall not be made unless with the BoI’s prior approval. Tax privileges to all IPPs are details as follows.


Page 35

Power Plant Date of

Promotion Granted

Promotion Certificate

Salient Privileges

Registered Capital of at

Least

Location

REGCO April 20, 1995 No. 1440/1995 dated June 15, 1995

December 7, 1994-December 6, 2002

Baht 4,700 million

Rayong Province

KEGCO September 26, 1996

No. 1742/1996 dated November 6, 1996

September 26, 1996-September 25, 2004

Baht 4,710 million

Nakorn Sri Thammarat Province

BLCP October 10, 1997

No. 1499/2000 dated August 21, 2000

October 1, 2006-September 30, 2014

Baht 12,000 million

Rayong Province

GPG June 28, 2005 No. 1660(2)/2005 dated July 25, 2005

November 3 2006-November 2, 2014

Baht 1,850 million and shall increase the registered capital of at least Baht 9,030 million

Saraburi Province

Tax privileges to all SPPs are details as follows.

Power Plant Date of Promotion

Granted


Salient Privileges


Least

Location

EGCO Gogen January 10, 2003

No. 1230/1999 dated June 7, 1999 and the revised version No. 5106/2000 (3-1230/1999 and 6753/2002) (4-1230/1999) dated May 31, 2000, October 3, 2002 and November 2002, respectively

January 10, 2003-January 9, 2011

Baht 1 million Rayong Province

Roi-Et Green April 25, 2003 No. 1660(1) 2001 dated October 19, 2001 and revised version No. 6871/2003 (2-1660 (1) 2001) dated November 7, 2003

April 25, 2003-April 24, 2011

Baht 180 million Roi-Et Province

GCC July 21, 1998 No. 1279/2540 dated May 2, 1997 and 3 revised versions - No. 4553/1999 (2-1279/1997) - No 6013/2542 (3-1279/1997) Dated December

July 21, 1998-July 20, 2004

- Saraburi Province


Page 36

Power Plant Date of Promotion

Granted


Salient Privileges


Least

Location

2, 1999- No. 5279/2000 (4-1279/1997) dated June 20, 2000

NKCC June 1, 2000 No. 1594/1998 dated December 28, 1998 and a revised version, No. 4735/2001 (2-1594/1998) dated March 7, 2001

June 1, 2001-May 31, 2008

- Saraburi Province

SCC April 1, 1999 No. 1761/1998 dated December 15, 1998 and a revised version, No. 4100/2001 (2-1761/1998) dated January 17, 2001

April 1, 1999-March 31, 2007

- Samutprakarn Province

GYG November 7, 2007

No. 1549(2)/2004 dated July 9, 2004

November 7, 2004-November 6, 2014

Baht 1 miilion Yala Province

2.1.2 Marketing and competition 1.1 Electricity generation and transmission system

EGAT is responsible for electricity generation and transmission to respond to demand countrywide. It has its own power plants for power generation and also purchases power supply from private producers, Laos and Malaysia. It then sells electricity to Metropolitan Electricity Authority (MEA), Provincial Electricity Authority (PEA), and other direct customers (some industrial plants designated by the Royal Decree). EGAT dispatchs electricity through high-voltage power stations. MEA and PEA will undertake the distribution and retailing to the general public. Electricity is purchased from EGAT at the interconnection point and then transmitted to substations for further distribution to consumers.

At present, EGAT has altogether 36 power plants scattering in many regions across the country. Most of EGAT’s plants are hydroelectric power plants and the second and the third are combined cycle power plants and thermal power plants, respectively. The combined installed capacity of the thermal power plants is the largest installed capacity.

Since 1992, the government has encouraged private sector to take part in electricity generating. The National Energy Policy Council approved the establishment of Electricity Generating Co., Ltd. (EGCO) and the regulations for the purchase of power from Small Power Producers (SPP) as well as policy regarding the purchase of power


Page 37

from Independent Power Producers (IPP). Power purchase from SPPs and IPPs helps provide the reduction of EGAT ’s investment burden in power generating facility.

1.2 Power purchase from SPPs

Electricity generated by SPPs is partially for its own use or for sale to nearby factories, and the remaining is sold to EGAT under the regulations for the purchase of power from SPPs.

EGAT has regulation to purchase electricity from SPPs each at 60 MW, but that may be extended to as high as 90 MW. From the beginning of the regulation to purchase power from SPPs in 1992 fiscal year until December 2009, there were 85 producers approved by EGAT with a total contracted capacity of 4,542.92 MW. Of the total, 62 producers with 3,826.30 MW capacity have been contracted on a firm type basis (with power purchase agreement term of 5 years up and defined capacity), and the other 23 producers with 716.22 MW capacity on a non-firm type basis (no defined capacity). Of these 85 producers, 56 producers have already dispatched 2,338.92 MW electricity to the system (42 producers, with 2,092.30 MW, have firm contracts and 14 producers, with 246.62 MW, have non-firm contracts).

There is currently also purchase of power from projects using other forms of energy, i.e. residue or waste. The purchase agreements are of non-firm type, under which no volume and time of purchase is specified. The purchase of electricity depends on the consideration of EGAT’s threshold capability of power transmission and distribution systems.

1.3 Power purchase from IPPs

The seventh National Economic and Social Development Plan has allowed for the private sector’s investment in power generation under the IPP scheme. The IPPs can submit their own proposals thereby competition is encouraged in respect of technology, location, generation source, type of fuel used, and power tariff. Under the selection of EGAT , 7 selected IPPs with aggregate generating capacity of 6,677.5 MW had signed the Power Purchase Agreement (PPA) with EGAT.

Currently, there are seven IPPs that has begun commercially dispatching electricity to the system, namely Tri Energy Co., Ltd., Independent Electricity Generating (Thailand) Co., Ltd., Glow IPP Co., Ltd (Bowin) , Eastern Power Co., Ltd, BLCP Power Co., Ltd., Gulf Power Generation Co.,Ltd. and Ratchaburi Power Co., Ltd.

On 27th June 2007, the Ministry of Energy (by Energy Policy and Planning Office, EPPO) announced the second solicitation for proposals from independent power producers for supply power to EGAT during 2012 to 2014 with the total capacity of 3,200 MW.

The ranking of bid proposals were made according to the evaluation of levelized unit price of each bidder. Four successful bidders were selected by EPPO, namely Gheco-One Co., Ltd., Siam Energy Co., Ltd., National Power Supply Co., Ltd. and Power Generation Supply Co., Ltd. with the cumulative total capacity of 4,400 MW.


Page 38

However, due to the recent economic slowdown which led to lower electricity demand growth of the country, EPPO has already postponed the COD of Siam Energy Co., Ltd and National Power Supply Co., Ltd by one year.

No. Company Fuel Type Capacity

( MW) Commercial Operating Date

(COD)

1 Gheco-One Coal 660 November 2011

2 Siam Energy Natural gas 1,600 March / September 2013

3 National Power Supply Coal 540 November 2013/ March 2014

4 Power Generation Supply Natural gas 1,600 June / December 2014

Total 4,400

1.4 Thailand’s total capacity

As of December 31, 2009, the total installed capacity of the Thailand’s power system accounted for 29,212.01 MW, coming from:

Power plant Installed

capacity (MW)Fuel

1. Total installed capacity of EGAT Plc. 14,328.12 heavy oil, natural gas, diesel, lignite

2. REGCO 1,174.99 natural gas, diesel 3. KEGCO 818.10 heavy oil, natural gas,

diesel 4. Ratchaburi Electricity Generating Plc. 3,481.00 heavy oil, natural gas,

diesel 5. Tri Energy Co., Ltd. 700.00 Natural gas 6. Independent Electricity Generating

(Thailand) Co., Ltd. 700.00 Natural gas

7. Glow IPP Co., Ltd. (Bowin) 713.00 Natural gas 8. Eastern Power Co., Ltd. 350.00 Natural gas 9. Nam Theun – Hin Bun hydroelectric

power plant 214.00/1 -

10. Huay Hoh hydroelectric power plant 126.00/1 - 11. Small power producers (firm type) 2,092.30 heavy oil, natural gas,

coal 12. Thailand-Malaysia transmission lines 300.00 -

13. BLCP Power Co., Ltd 1,346.50 Coal 14. Gulf Power Generation Co.,Ltd 1,468.00 Natural gas 15. Ratchaburi Power Co., Ltd 1,400.00 Natural gas

Total installed capacity 29,212.01

Source: EGAT

Note /1 Capacity at the interconnection point


Page 39

1.5 Total power demand

(1) Statistics of power demand

Peak load demand is the maximum power required in the system during the day in each year, and electricity generation refers to total units of electricity generated in a certain period. Both values depend on weather condition, period of power consumption, number of consumers, economic condition, etc. The historical data of Peak load power demand and electricity generation are as follows:

Peak load demand Electricity generation

Fiscal year MW Increase Million units

Increase

MW % Million units

%

1988 5,444.00 710.10 15.00% 31,996.94 3,803.78 13.49%1989 6,232.70 788.70 14.49% 36,457.09 4,460.15 13.94%1990 7,093.70 861.00 13.81% 43,188.79 6,731.70 18.46%1991 8,045.00 951.30 13.41% 49,225.03 6,036.24 13.98%1992 8,876.90 831.90 10.34% 56,006.44 6,781.41 13.78%1993 9,730.00 853.10 9.61% 62,179.73 6,173.29 11.02%1994 10,708.80 978.80 10.06% 69,651.14 7,471.41 12.02%1995 12,267.90 1,559.10 14.56% 78,880.37 9,229.23 13.25%1996 13,310.90 1,043.00 8.50% 85,924.14 7,043.77 8.93%1997 14,506.30 1,195.40 8.98% 92,724.66 6,800.52 7.91%1998 14,179.90 -326.40 -2.25% 92,134.44 -590.22 -0.64%1999 13,712.40 -467.50 -3.30% 90,413.99 -1,720.45 -1.87%2000 14,918.30 1,205.90 8.79% 96,780.72 6,366.73 7.04%2001 16,126.40 1,208.10 8.10% 103,165.20 6,384.48 6.60%2002 16,681.10 554.70 3.44% 108,382.46 5,217.26 5.06%2003 18,121.40 1440.30 8.63% 116,669.98 8,280.70 7.64%2004 19,325.80 1,204.40 6.64% 127,756.41 11,086.43 10.22%2005 20,537.50 1,211.70 6.26% 134,893.25 9,097.85 5.58%2006 21,064.00 526.50 2.57% 142,112.18 7,218.93 5.35%2007 22,586.10 1,522.10 7.22% 146,884.92 4,722.74 3.35%2008 22,568.20 -17.90 -0.08% 148,435.98 1,551.60 1.05%2009 22,044.90 -523.30 -2.32% 145,214.62 -3,221.36 -2.17%

Source: EGAT

(2) Power demand forecast

Power demand can be forecasted based on possession and power consumption of electrical appliances (end use). This requires a large amount of information, on macro-level, e.g., economic growth, population size, number of households, government’s principle in power, etc. and micro-level, e.g. power consumption to value added of small business and industries, type of residence, income level, consumption and efficiency of electrical appliances, applications for power consumption and investment promotional privileges, power consumption to facility service areas, temperature, etc.


Page 40

Power demand is identified in two terms, i.e. energy demand and peak load demand. Forecast of energy demand takes into account the above information with mathematical models applied. Meanwhile, peak load demand forecast is figured out by considering the derived energy demand forecast together with nature of consumption by each user.

1.6 Dependable capacity

Dependable capacity refers to the maximum generating capacity sustained by the system in a period of time under circumscribed environment. Dependable capacity of hydroelectric power plants is the electricity generating capacity with reservoir water availability and past water supply statistics taken into account. Dependable capacity of thermal power plants is the electricity generating capacity when taking into account various circumstances and their constraints, which can hinder thermal plants’ achievement of their full electricity generating capacity.

1.7 Reserve margin

Reserve margins come from the event when dependable capacity is higher than peak load demand. In calculation term, it is the difference between dependable capacity and peak load demand divided by peak load demand, expressed in percentage. In general, EGAT will maintain the reserve margin at 15% to ensure adequate generating capacity.

The following table presents EGAT’s reserve margin during fiscal years of 1991-2008. During 1991-1997, the country’s power demand expanded rapidly thereby the reserve margin in the system falling below the level to be maintained by EGAT. In 1998, due to the economic meltdown and baht volatility, several businesses had to close down or suspend their production and expansion indefinitely. As such, domestic power demand consumption dropped sharply resulting in increase in reserve margins. To contain the excessive reserve margins, EGAT negotiated with SPPs and IPPs for their postponement of power plant construction for 1-4 years and revised the power generating capacity development plan by postponing the projects, which have not yet begun their construction and temporarily shut down some power plants (cold standby)

Fiscal year Reserve margins (%)

1992 14.001993 17.42 1994 15.08 1995 12.69 1996 17.541997 14.771998 22.44 1999 34.46 2000 33.44 2001 35.64 2002 28.02003 35.12004 26.82005 19.9


Page 41

Fiscal year Reserve margins (%) 2006 13.7 2007 21.9 2008 23.8 2009 22.4

Source: EGAT

1.8 Thailand Power Development Plan (PDP)

Under the current power industry structure, EGAT is responsible for procurement of electricity to adequately meet future power demand. Thus, the Power Development Plan (PDP) is worked out every year involving investment in power plant projects and power transmission projects. The power plant projects cover both the plants operated by EGAT Plc and those run by the private sector. The PDP is intended to have electricity adequately procured to serve the country’s future power demand based on power demand forecast and to ensure the lowest electricity cost. However, due to specific nature of the power systems, the PDP takes into account technical conditions, security of the systems and appropriate fuel diversification.

Thailand Power Development Plan 2007-2021 (PDP2007) was formulated by EGAT under policy framework of the Ministry of Energy, including fuel diversification and power purchase from neighboring countries, etc. After the approval of PDP2007, the solicitation of new IPPs and SPPs (both co-generation and renewable project plants) was undertaken by the Energy Planning and Policy Office (EPPO). The selection of IPPs and SPPs was finalized.

To conform with the newly committed IPPs and SPPs, EGAT under the guidance of Ministry of Energy has reviewed and revised the PDP 2007. The revised PDP called “Thailand Power Development Plan 2007-2021: PDP 2007 Revision 1” was presented to the National Energy Policy Council (NEPC) and the cabinet for endorsement on December 2007.

According to the economic slowdown, lower electricity demand than expected in the forecast, the expiration of tariff MOU with Lao projects that need to be renegotiated, and the higher reserve margin than necessary, EGAT is now revising PDP 2007 Revision 1 accordingly. The revised PDP, called “Thailand Power Development Plan 2008-2021: PDP 2007 Revision 2” which has been approved by NEPC and the cabinet since March 24, 2009.

However, due to the economic crisis during the year 2009, the demand for electricity dropped continuously, especially during the beginning of the year 2009, electricity consumption in Thailand was decreased more than 10% each month. As a result, the Ministry of Energy has to adjust the PDP in order to reflect the current situation and it is expected to be completed within January 2010.


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2. Power Industry in Central Region

The central region of EGAT system, covering 22 provinces in four main areas: 1) Bangkok outskirts and nearby provinces 2) Eastern area 3) Western area 4) Lower central area

At present, the generating capacity of the central region derives from EGAT’s power plants and other large private producers that EGAT has purchased electricity from. Besides, there is supplementary capacity from North Bangkok power plant and transmission facilities from the northern region. As of December 31, 2009, the generating capacity of the Central region is 21,393.12 MW, consisting of:

Total generating capacity of EGAT 8,118.13 MW Rayong Electricity Company Limited (REGCO) 1,174.99 MW Ratchaburi Electricity Generating Plc. 3,481.00 MW Tri Energy Co., Ltd. 700.00 MWIndependent Electricity Generating (Thailand) Co., Ltd 700.00 MW Glow IPP Co., Ltd. (Bowin) 713.00 MW Eastern Power Co., Ltd. 350.00 MWBLCP Power Co., Ltd 1,346.50 MW Gulf Power Generation Co.,Ltd 1,468.00 MW Ratchaburi Power Co., Ltd 1,400.00 MWSmall Power producers 1,931.50 MW Total power generating capacity 21,393.12 MW

3. Power Industry in Southern Region

Power generating capacity in the southern region comes principally from EGAT’s power plants, KEGCO and transmission network connecting to the central region. There is also supplementary capacity during peak period from Bang Lang and Ratchaprapa hydroelectric plants. In addition, the southern power network also links with that of Malaysia to allow for their power exchange in case of emergency or necessity.

Power generating capacity in the south as of December 31, 2009 was 2,485.58 MW:

Total generating capacity of EGAT 1,338.48 MW Thai-Malaysian transmission networks 300.00 MW KEGCO 818.10 MW Small Power producers 29.00 MW Total power generating capacity 2,485.58 MW


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4. Competition

4.1 EGCO’s market share compared with competitors’

As of December, 31 2009, EGCO has 13 operating plants with capacity totaling 4,252.34 equity MW, of which 3,599.60 equity MW is dispatched to EGAT under long-term PPAs. This 3,599.60 equity MW represents 12.32% of Thailand’s total installed capacity.

For EGCO’s total equity MW portfolio, 48.35% comprises two natural gas-fired IPPs which are the 1,232-MW REGCO plant and the 824-MW KEGCO plant.

REGCO and KEGCO sell electricity to EGAT under long-term power purchase agreements (PPA). The contracted capacity is 1,174.99 MW and 818.10 MW for REGCO and KEGCO, respectively.

Moreover, EGCO has 50% stake in BLCP Power facility located in Map Ta Phut Industrial Estate in Rayong Province, a 1,434 MW coal-fired power plant using high quality imported coal from Australia. The plant contributes 717 equity MW to EGCO’s total equity MW portfolio, representing 16.86% of the portfolio.

EGCO also has 50% stake in KK2 project (by holding 50% of shares in GEC which holds 99.99% in GPG, the project owner). KK2 project is a 1,510 MW natural gas-fired power plant located in Saraburi province comprising two combined cycle units, 755 MW each. The COD for KK2 project unit 1 was on May 5, 2007 and the pre-COD for Unit 2 was on February 27, 2008, respectively. The project contributes 734 equity MW to EGCO’s total equity MW portfolio, representing 17.75% of the portfolio.

4.2 Competition situation

As a prototype privatization, EGCO has enjoyed several privileges initiated to encourage the private sector’s participation which makes EGCO to possess advantage in view of the following 1. EGCO is creditable among the financial source and investors. 2. EGCO’s personnel are transferred from EGAT Plc , which is the country’s sole

source of personnel in power industry, thus contributing to efficient operations. Its rivals, which are just set up, on the contrary, need to recruit personnel that may have no enough expertise or be costly or take time for training.


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

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

2. Human resource restriction: Personnel with expertise in this area is scarce, so recruitment is difficult and costly.

Currently, it is possible for potential international power companies to play more roles in Thailand’s power industry.

Future Competition

Future competition will be stronger. A slower demand growth rate and the tendency to purchase more power from cross border projects results in a lower number of domestic IPP and SPP projects to be developed. Since the site selection, the type of fuel used and the tariff rate are key success factors for winning power licenses, the Company has to enhance its competitiveness by continuously implementing the best practice for business management.

2.1.3 Process

The Company has the policy to supply electricity or to provide related services with high quality. The Company will honor its promise to the customers and will continue to operate its business safely with environmental friendliness. In this regard, the description of the service of REGCO and KEGCO, the major power plants in EGCO Group, is provided as an example.

Capacity, Net Generation and capacity Factor

The capacity, net generation and capacity factor of REGCO and KEGCO during 2006-2008 is as shown below:

units 2009 2008 2007

REGCO

Available capacity/1 million KW/hour

9,743 9,304 10,103

Dispatching net generation/3

million KW/hour

2,952 2,248 3,895

Capacity Factor(%) % 30.30 24.17 38.55

Increasing rate of capacity factor (%)

% +31.32 -42.26 -33.27

KEGCO


6,900 6,486 6,174


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units 2009 2008 2007


million KW/hour

5,643 5,577 6,006

Capacity Factor (%) % 81.79 85.98 97.27


% +1.18 -7.14 12.28

BLCP


10,836 11,052 11,052


million KW/hour

10,018 10,175 9,723

Capacity Factor (%) % 92.45 92.06 87.97


% -1.53 4.65 754.75

GPG


11,879 9,173 3,582


million KW/hour

9,329 8,960 3,502

Capacity Factor (%) % 78.54 97.68 97.75


% +4.11 +155.86 -

Notes /1 Available capacity of each plant in each year is calculated from the total number of hours deducted by the

number of hours of planned maintenance outage. 2. Dispatching net generation in each year depends on the generating availability of the plant and the order from the control center of EGAT based on the electricity requirement at each period of time. In this regard, REGCO operate the power plant for 24 hours a day with 4 shifts of 16 operators each for 4 blocks of combined cycle plant. KEGCO run the power plants throughout 24 hours a day with 5 shifts of operators. Three operators are required for each shift of the thermal power plant while 4 are required for combined cycle plants.

3. In 2006-2007, it was the testing period for operating GPG power plant, unit 1, and GPG received the commission fuel payment, which was the compensation for the fuel used during the testing period. The commercial operation date for unit 1 and unit 2 was on May 5, 2007 and March 1, 2008 respectively.

Raw Material Major raw material for power generation is fuel. Besides natural gas and heavy oil which are primary fuels and diesel oil which is secondary fuel, other raw materials required for the generating process are water and chemicals, e.g. water treatment agent, fuel additive, etc., as can be summarized as follows:


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(1) Natural gas

Natural gas is a primary fuel used for both thermal and combined cycle plants. Under the PPAs, EGAT will initially procure natural gas for REGCO and KEGCO, the payment for which shall be made by EGAT directly to Petroleum Authority of Thailand (“PTT”). The heat rate in the power generation must not exceed that specified under the PPAs. In case the actual heat rate is higher, both companies have to bear the increase in the natural gas cost. Once they directly enter into fuel supply agreements with PTT, they would be responsible for the payment for the natural gas and pass it on to EGAT through the calculation formula of energy payment.

(2) Heavy oil

The Khanom power plant uses heavy oil as primary fuel like natural gas for its Barges 1 and 2 power plants. However, it will be used only when natural gas supply is insufficient. The plant reserves heavy oil for serving 7 days of full generation.

(3) Diesel oil

Diesel oil is reserved to cope with primary oil shortage and for use in case of machinery test-run and for operation after repair & maintenance. According to the PPAs, REGCO and KEGCO have to make available diesel oil reserve to serve 3 days of full generation. Both companies will operate the facility with the use of diesel oil only upon the instruction of EGAT.

(4) Water Apart from the water purchase from East Water Resources Development and Management Plc., Dok Krai reservoir in Amphur Pluak Daeng of Rayong, a reservoir covering an area of around 50 rai with a 0.2 million m3 capacity was constructed in the company’s premises for emergency use and can sustain a water reserve for about seven days. Moreover, REGCO has a tap water unit that can produce tap water of up to 43,200 cu.m3 a day. The water supply is required by the boilers and the cooling system of the power generation process.

For KEGCO, the water used in the thermal plant comes from Ban Klang canal as the primary source and Tha Tok canal as the secondary source. A reservoir has also been built to accommodate water reserve of 0.4 million m3 on an area of 85 rai 56 sq.wah. along the Ban Klang canal, 9-10 km. far from the power plant, which can well cope with water shortage during the dry season. KEGCO is constructing another reservoir with the capacity of 0.4 million m3 which is about 6 kilometer far from the plant. BLCP purchases the water from the Industrial Estate Authority of Thailand (“IEAT”) with the water reserve for using in the power plant compound for 3 days. Moreover, BLCP has the desalination plant as the back up source to use in case that IEAT cannot deliver the water to the power plant. For PGP, the water used in the power plant comes from Pasak River as the primary source. A reservoir has also been built to accommodate water reserve of 1.3 million m3 on an area of 120


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rai 56 and can sustain a water reserve for about 30 days. Moreover, REGCO has a tap water unit that can produce tap water of up to 54,413 cu.m3 a day.

(5) Chemicals Most chemicals used in power plants are for improving water quality, such as, hydrazene for boilers, and hydrochloric acid (HCL), sulfuric acid (H2SO4) and sodium hydroxide (NaOH) for use in regenerating resin and treating waste water, as well as kaolin and ferric chloride for tap water system. All these chemicals can be procured locally. 3.2 Service Business EGCO Engineering & Service Company Limited (“ESCO”) ESCO is EGCO’s wholly owned subsidiary which provides operation, maintenance, engineering and construction services to power plants, petrochemical plants, oil refineries and other industries including the Group companies. 3.2.1 Service Power Plant Operation and Maintenance Services (O&M) ESCO aims to provide comprehensive operation and maintenance services with high efficiency, i.e., high equivalent availability factor and low heat rate with reasonable O&M cost. ESCO has extensive experiences to provide a full scope services to both thermal and combined cycle plants Maintenance Services With the strong and competent workforce, ESCO can provide a variety of professional maintenance services for power, petrochemical and oil & gas industries which covers the following areas:

♦ Planned Outage maintenance ♦ Contract maintenance services ♦ Individual equipment maintenance ♦ Field service and emergency troubleshooting

ESCO has extensive expertise in mechanical maintenance, electrical maintenance, and control and instruments maintenance services and can be on called on 24-hour basis. Engineering & Construction Services ESCO has a qualified team of engineer to provide services on civil, mechanical, electrical and control and the testing and installation. The particular strength lies in erection and commissioning of power plant main system such as gas turbine, steam turbine, generator, HRSG, boiler and balance of plant. ESCO services also cover turn key of small to medium projects such as pumping stations and power distribution substations. In addition, ESCO also provides service on demand side management, technical and field testing and technical training.


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3.2.2 Market and Competition ESCO has the highest market shares of around 90% for the SPP maintenance segment. This was because the power plant maintenance work requires high expertise as the equipment is of high price. The players in this market then are EGAT, OEM and ESCO. With the customers’ trust in ESCO services, ESCO could attract and retain both existing and new customers who tend to be more interested in entering into a long term contract. For other maintenance work such as that of the industrial and petrochemical plants, ESCO still has to compete with other service providers. However, the market share is increasing. With regard to the O&M service, the market is still limited as most private power producers still prefer to use their own workforce. For the engineering and construction, ESCO is competitive in term of financing apart from the qualified workforce.

3.3 Water Business Egcom Tara Company Limited (“ET”) EGCO holds an indirect 70% stake in ET via ESCO. Under a 30-year agreement, ET produces tap water according to Thai Industrial Standard (“TIS”) and supplies it to the three water stations of the Provincial Waterworks Authority of Thailand (PWA), namely, Pak Tor Water Station, Damnoen Saduak Water Station and Samut Songkhram Water Station. 3.3.1 Product and Service ET supplies tap water that meets the industrial standard to the PWA to replace the usage of well water which may result in the mud slide. ET has supplied tap water to the waterworks office in Ratchaburi and Samut Songkhram provinces under the 30-year water purchase agreement with the combined capacity of 36,000 cubic metres per day starting from April 7, 2001. ET enjoys the BOI privileges with significant conditions as follows 1. Permission to use the foreign labor with expertise in the business as agreed by the BOI, 2. Exemption of import duty on machinery as approved by the BOI, 3. Exemption of corporate income tax for net profit from promoted business for eight years

from the first date of income earnings, 4. Exemption of calculating dividend from the promoted business as taxable income

throughout the period of corporate income tax holiday. 5. Permission to transfer the money in foreign currency out of the country. 3.3.2 Market and Competition Since ET supplies tap water to the PWA under the 30-year contract, there is no competition. ET focuses on maintaining the quality of water that meets the standard which was certified by TIS and the Health Department, Ministry of Health as drinkable tap water. In addition, ET commits to ensure that its production is environmental friendly without any pollution. Due to its contribution to maintain a good working environment, it also wins the award on “Distinguished Workplace” from the Health Department.


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3.3.3 Process Raw material used to produce tap water is the water from Mae Klong Rivier which incurs no cost. The production process is summarized below. • Raw water pumpting from Mae Klong River, • Chemical addition, • Sedimentation, • Filtration, • Chorination, • Storage in clear water tank, • Transport to PWA, ready for distribution.

Apart from ET, EGCO also holds shares in Eastern Water Resources Development and Management Public Company Limited (“East Water”). At the end of February 28 2009, EGCO holds 18.72% of shares in East Water which is responsible for supplying raw water in the Eastern Seaboard of Thailand covering 7 provinces namely, Rayong, Chonburi, Chachoengsao, Prachinburi, Srakaew, Chantaburi and Trad. 3.4 Environment Impact EGCO has the policy to conduct our business with commitment in compliance with relevant environmental laws and regulations including the rules and regulations of the local government such as a municipal authority, a tambon administration authority, etc. In case that no enforceable law exists, EGCO will apply appropriate standards with responsibilities by; • Encouraging employees to have strong concern and be responsible for the clean

environment, • Communicating with the public on environmental matters, share its experience with other

agencies to facilitate environmental improvements in industry performance, knowledge and operating practices,

• Managing our business with the goal to alleviate the adverse effects on the environment, undertake appropriate reviews and evaluations of its performance to measure and to ensure compliance with this environmental policy.

Safety, Occupational Health and Environment To align our efforts and to extend our scope of responsibility to cover future power plants, EGCO has included the projects on safety, health and environment in the strategic plan and budget. With respect to this, the Safety, Health and Environment (SHE) Committee, has been shored up comprising representatives from Group companies. The responsibilities of the SHE Committee are to prepare the action plan on SHE implementation in alignment with the corporate policy and goals as well as the strategic plan and to monitor and appraise the quality of SHE program. At present, the Executive Vice President- Project Management from Asset Management and Planning Group is the Chairman of the Committee EGCO group considers SHE management as an essential part of our business to deliver our commitment of “constantly adopting the best practices to continuously increase the competitiveness and being sensitive to community and environment concerns”. In this regard, the SHE Committee has set the EGCO Group’s SHE guidelines. In 2008, the SHE Committee had cascaded the practice to EGCOM Tara, a subsidiary that supplies tap water that meets the industrial standard to the Provincial Waterworks Authority.


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SHE Committee’s Working Process The SHE Committee has established the EGCO Group’s SHE guidelines and cascaded the practices down to EGCOM Tara, a subsidiary supplying tap water that meets the industrial standard to the Provincial Waterworks Authority. The crucial principle of safety, occupational health and environmental management is developed on the ‘knowledge and expertise sharing’ basis in order to pass on experience, knowledge and skills to ensure standard practice across the board. The SHE Committee monitors and assesses the working practices using EGCO’s assessment criteria with Khanom and Rayong power plant being admired as the role models.

In addition, the SHE Committee has developed the SHE Management System Database which is used for knowledge sharing on SHE policies and practices among Group companies. Participations and feed backs from the Group companies are welcome of which the information will be used for continuous improvement. With a commitment to ensure that our SHE management system meet the international standard, EGCO continues to study the best practices and relevant laws and standards in order to update our SHE guidelines. Safety and Occupational Health Management As mention above, EGCO Group, which operates in the energy sector, put our priority on the SHE management to ensure the compliance with the international standards. Our SHE management covers not only our employees but also our partners and all relevant parties. With this in mind, we set a policy that contractors must attend the SHE training and testing under OHSAS 18001/TIS 18001 before discharging their duties.

EGCO Group realizes that preparation is the key success factor for safety management. Consequently, risk management principles are applied to prepare all relevant units for any unexpected incidents. Annual fire drills, regular check-up of workplace safety, safety equipment trainings are carried out regularly. In addition, work place safety exhibitions are organized to promote understanding on SHE management system to employees and contractors alike. Highlights of activities to promote the SHE consciousness in the year 2009 are as follows.

• Safety Projects in 2009

- Suggestion system for workplace improvement campaign at Khanom power plant - ZERO Accident Campaign at Khanom power plant - Safety exhibition in collaboration with governments units to provide knowledge to

students, private and government organizations, and the general public at Khanom power plant.

- Project to reduce accidents at work at Roi-Et Green power plant. - Project to encourage employees to wear full safety gear while working at Roi-Et Green

power plant


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• Occupational Health Projects in 2009 EGCO Group believes that the healthiness of the employees reflect the healthiness of the organization. In this regard, EGCO takes care that all of our employees are in good shape and are safe from any plague. During the H1N1 pandemic outbreak in 2009, EGCO Group ran a special campaign to prevent our employees from H1N1 Flu by providing knowledge to employees and contractors on the flu and how to prevent it. In addition, screening spots were set up and alcohol sanitizing gel was provided for employees and visitors. Apart from such campaign, EGCO Group also ran the following occupational health projects in 2009.

- Annual physical check-up for employees - First-aid training for the employees - Employees’ physical exercise for weight loss to promote physical fitness by providing

facilities for daily exercise, supporting the budget to the Sport Club to run sport programs for employees and regularly host sport events for employees.

- Sport campaign with private and government units including local communities. - Health and life insurance for employees and their families.

• Safety Records With the commitment to high standard of SHE management, there is no labor dispute between EGCO and the employees. In addition, there is no event that leads to loss time injury in 2009. The accumulated safety hours of each company is shown below.

Power plants Working hours

Period

Rayong power plant 9,338.804.66 11 September 1999 to 31 December 2009Khanom power plant 4, 642,848 17 May 1998 to 31 December 2009

EGCO COGEN power plant 453,451 20 January 2003 to 31 December 2009Roi-Et Green power plant 819,439 29 May 2003 to 31 December 2009

Energy Management EGCO Group puts high priority on efficient energy usage by running energy saving campaign which includes introducing energy efficient facilities, maintaining all equipment in a ready to use stage and studying and developing the energy management system to meet the international standard. Moreover, we promote the culture of sustainable energy use. In this regard, Khanom power plant converted one of the existing buildings to be the demonstration center for energy conservation powered by solar energy. This building is open as a learning center for renewable energy usage for employees, students, and the general public. Roi-Et Green has set the measure to clean the boiler heating surface during the planned outage 4 times a year. Since Roi-Et Green is a biomass power plant using rice husk as fuel, there is slag in the boiler tubes. As such, the oxygen level in the exhausted gas and the boiler blow down rate is adjusted down to maintain the boiler efficiency which results in a better heat rate. Environmental Management With the awareness that natural resources are major source for power generation, EGCO Group put the prime focus on efficient use of natural resources and see to that the impacts on the environment are well managed to reduce the impact from our operation. Such environment management includes water resource management, water treatment from production process, air pollution management, noise pollution management, waste management, green house gas management, and biodiversity management.


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Water resource management and Water treatment from production process EGCO Group supports the efficient use of water resource. Apart from reducing the water usage, we also adopt new technology in water treatment using sediment forming catalyst to treat waste water from office building and implement a neutralization system to treat chemical contaminated water from the operation process. In parallel, EGCO Group adheres to the water management plan.

• Construction of reservoirs to reserve water for power generation process - Khanom power plant has constructed two water reservoirs with the capacity of

400,000 cubic meters and internal reservoir with the capacity of 35,000 cubic meters. KEGCO has set the water level above the check dam so that it can pump in water without disturbing the water consumption of communities around the reservoir and above the check dam.

• Using treated water for fish farming or plant watering - Khanom power plant has run the Zero Discharge Program to re-use waste water

from office buildings, power plant and employees’ residences to water the plants. - Rayong, EGCO COGEN and Roi-Et power plants used the waste water from

office buildings for watering plants. This helps cut 30% of the water consumption.

• The monthly monitoring of water quality was carried out to ensure that the waste water is treated to the level that meets the standard before being discharged to reduce the impact on the water resources. In addition, regular monitoring of the ecological system is conducted.

• Quarterly monitoring of the water treatment system to ensure efficient treatment - Khanom power plant implements the grease and chemical trap in the water

drainage system to increase the efficiency of separating oil from discharged water.

The tables below demonstrate water consumption of raw water and waste water during the last three years.

A. Water consumption Raw water consumption (M3/GWh)

2009 2008 2007 Remarks

Rayong power plant 1,268.28 1,248.16 1,320.00 Khanom power plant 88.33 88.112 86.202 ECGO COGEN power plant 1,340.00 1,401.00 1,370.00 Roi-Et Green power plant 4,675.74 4,885.75 4,545.66 B. Temperature of cooling water of the discharge

Temperature of cooling water of the discharge

2009 2008 2007 Remarks

Rayong power plant 29.5 33.4 34.3 Legal requirement

<= 40.00 C Khanom power plant 37.1 39.4 39.3 ECGO COGEN power plant 34.1 34.1 34.8 Roi-ET Green power plant 28.38 25.04 28.73


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Air Pollution Management With the efficient monitoring of the power generation process, the quality of air emission of all power plants in EGCO Group is better than the legal requirements. EGCO Group has also implemented continuous air quality control measures as follows:

• Bi-annual cross-checking of stack emission measuring. • Checking of efficiency of air pollution control treatment equipment on a quarterly

basis. • Enhancing of air quality management as follows:

- Rayong power plant reduced Nitrogen Oxide emission by spraying water into the combustion chamber.

- Khanom power plant constructed a sandblasting room using Uncentrator and cartridge to control the dust from the sandblasting process in order to maintain a good working environment and control the air pollution in the nearby area.

- Roi-Et Green power plant, a biomass power plant using rice husk as fuel, installed an electrostatic precipitator to trap flying ash in the fuel to be kept in the ash silo before being transported by a truck with full cover and water spray to prevent dusting. Ash is transported via conveyor belt to the storage for future distribution to farmers in nearby areas to be used as fertilizers.

The table below demonstrates air emission from EGCO Group during the last 3

years.

Air emission from power plants Oxide Nitrogen Emission

2009 2008 2007 หมายเหตุ Remarks

Rayong power plant 147.37 149.79 164.87 Legal requirements

<= 200.00 ppm Khanom power plant 152.00 139.00 167.00 EGCO COGEN power plant 92.3 58.9 70.2 Roi-Et Green power plant 26.71 117.41 N/A* Sulfur dioxide (ppm) 12.46 45.63 43.37 Legal requirements

<= 60.00 ppm Remarks: The measurement of SO2 is not required for REGCO, KEGCO and EGCO COGEN power plants due to the use of natural gas as fuel. * Roi-Et Green applied the old measurement criteria, of which the results cannot be comparable to the new measurement criteria in 2008.

Noise Management Noise measurement is made at all power plants in EGCO Group on a quarterly basis. The measurement is made at three areas being the original source in the power plants, the control room and the boundary. It is found that the noise level at the control room and the boundary areas are within the limit while the noise at the source will be controlled to be within the limit. For example, employees who have to work in the operation area are required by internal regulation to strictly follow the regulations and wear safety gadgets in order to reduce the noise level. Warning signs are also displayed at the area.


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In addition, KEGCO has increased the noise measurement at the residential area in the power plant campus to ensure the safety and occupational health of the employees. The result indicated that the noise level is within the limit. The table below demonstrates noise emission during the last 3 years.

Noise emission from power plants

2009 2008 2007Remarks

Noise level at the production site Legal requirement <= 90 dB(A) Rayong power plant 79.1 81.3 77.7

Khanom power plant 101.4 130.7 104.1EGCO COGEN power plant 89.9 88.2 88.1Roi-Et Green limited power plant 90.1 89.6 89.6

(dB(A)) Noise level at the control room Legal requirement <= 80 dB(A) Rayong power plant 62.6 62.8 58.6 Khanom power plant 69.7 68.8 68.6 EGCO COGEN power plant 60.8 65.5 67.0 Roi-Et Green limited power plant 66.4 NA* NA* * In 2006 and 2007, noise level which was below 80 DB(A) was not calculated for cumulative noise levels at work. Noise level at the boundary area (dB(A))

2552 2551 2550Legal requirement <= 70 dB(A)

REGCO power plant 53.2 50.9 48.3 Checked at a Security Kiosk KEGCO 57.3 56.3 52.4EGCO COGEN power plant 63.4 64.3 63.5Roi-Et Green limited power plant 60.5 NA NA Unchecked

Waste Management With the commitment to make the best use of natural resources, EGCO Group set the procedure for waste management under the following principles.

• Employees must bear in mind to produce as minimum waste as possible and to recycle waste.

o Khanom power plant organized project to produce organic instead of chemical fertilizers.

o Roi-Et Green power plant has used ash from rice husk which is the by product from the combustion process as fertilizers. Such knowledge is introduced to local villagers to replace the usage of chemical fertilizers with the environmental friendly one.

• Appropriate waste management procedures are set up starting from separation, transportation and disposal.

• Advisors will be engaged to manage contaminated and hazardous waste which may affect the environment to comply with the environmental laws.


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Greenhouse gases and biodiversity management With the awareness that climate change will significantly affect ecological and natural systems, we at EGCO are determined to alleviate this problem by establishing a long term plan for greenhouse gas and biodiversity management together with the following projects.

• Rayong Power Plant’s Green Belt 2006-2010 Rayong Power Plant has started the project to increase the greenbelt around the power plant to absorb as much as possible the carbon dioxide emitted from the electricity generation process. The project started in 2006 with the objective to expand the green zone to cover 120 rai within 2010. In the year 2009, Rayong power plant in collaboration with locals planted trees for 45 rai. Until now, there have been 90 rai of green zone.

• Assessing species diversity and abundance of plankton and Benthic animals Project KEGCO has bi-annually assessed the species diversity and abundance of Plankton and Benthic animals at Khanom Gulf and Khanom River. It is found that the diversity and abundance were not directly impacted by the water discharged from the power plant but were up to the environment of the Khanom canal such as the chemical and physical conditions, light, nutrients, water discharge from households and development for community use.

• Sustainable forest Project at Khaonom Power Plant In collaboration with local units at Khanom district, Khanom power plant has managed to grow mangrove trees in the area of 20 rai. This also encourages the local to set up conservation group to take care of natural pond, and local natural water sources including landscape improvement by increasing green area for community.

• Bring life to the water project, KEGCO Khanom Power Plant raised 5,000 sea basses in baskets at its cooling water discharge twice a year until they are large enough to be released to the sea. This project is intended to be a showcase of good environment management in the power plant. At the same time, the project helps increase the population of sea basses in the Khanom area.

• Improvement of the mountainous landscape by KEGCO Recognizing the duty to contribute to the society as well as seeing the importance of local plants, Khanom power plant has initiated the project to improve the landscape of the mountains by planting trees that represent 14 provinces in the south in the park at the foot of the mountain. Apart from being the resting and recreational area for employees and the general public, this park also provides knowledge about local plants to the community.

• Banana Conservation Project at KEGCO In order to conserve the different kinds of banana and increase soil humidity in the foot of the mountain and the grass field, KEGCO has arranged a project to conserve different kinds of bananas. More than 200 banana trees were planted. The project sign to show the project name and the banana tree names are provided to provide knowledge for employees and local community.

Compliance with Environment Laws and Regulations EGCO Group has the policy to conduct our business with commitment to strictly complying with relevant environmental laws and regulations. We will also try to go beyond the legal


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requirement. For new project, we will adopt the EGCO’s SHE standard which will be in line with the local requirement of such project. Safety, Occupational Health and Environmental Operation Efficiency With continuous effort in ensuring efficient SHE implementation, EGCO Group power plants are well recognized by various institutions as shown below:

• Khanom Power Plant - 8 consecutive years of winning EIA Monitoring Awards from the office of

Natural Resources and Environmental Policy and Planning from 2000 onwards. (No award was given in the year 2003 and 2004.)

- 10 consecutive years of winning the award on outstanding organization for national safety, occupational health and environment at work place award.

• Rayong power plant - Participating in the project of Corporate Social Responsibility – Department of

Industrial Work. (CSR-DIW)

• Roi-Et Green - Two consecutive years of winning “Safety Excellence Award in Provincial

Level” by the Ministry of Labor.

4. Undelivered work There is one project namely Nam Theun 2 project which is currently under development with the project’s COD target for March 2009.

Part 2 Section 4 Research and Development

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4. Research and Development


Part 2 Section 5 Operational Assets

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5.1 Fixed Assets

The fixed assets of the company and subsidiaries as at December 31, 2009 comprise the following items.

Items Value/1 (Million Baht)

1. Land and Building Less Accumulated Depreciation Total

5,475.16 (2,378.18) 3,096.98

2. Power Plant and Transmission System Less Accumulated Depreciation Total

35,465.30 (23,674.01) 11,791.29

3. Office Equipment and Cars Less Accumulated Depreciation Total

525.32 (399.15) 126.17

4. Work under construction 53.55 Remark : /1 The number was shown in EGCO Group’s consolidated financial statement . Subsidiaries

KEGCO has mortgaged land and buildings and pledged power plant equipment to secure its debenture worth Baht 7,500 million and its long-term loans worth USD 265 million. EGCO Cogeneration Co., Ltd. has mortgaged land and buildings to secure its long-term loan worth USD 26.80 million and Baht 1,181.72 million. Roi-Et Green Co., Ltd. has mortgaged land and buildings and pledged power plant equipment to secure its long-term loan worth JPY 1,260 million.

Joint Ventures

BLCP Power Co., Ltd. (“BLCP”) has mortgaged land and buildings and pledged equipment to secure its long-term loan worth USD 558 million and Baht 25,063 million.

Gulf Power Generation Co., Ltd. (“GPG”) has mortgaged land and buildings and pledged equipment to secure its long-term loan worth USD 322.80 million and Baht 16,388 million.

GCC, Nong Khae Cogeneration Co. Ltd. (“NKCC”) and SCC have mortgaged their land and buildings and pledged all power plant machinery and equipment including parts of their ordinary shares to secure its loan worth baht 5,800 million.


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Gulf Yala Green Co., Ltd (GYG) has mortgaged land and buildings and pledged all power plant machinery and equipment to secure its long-term loans worth USD 23 million and USD 645 million.

Southern Philippines Power Corporation (SPPC) has mortgaged land and buildings and pledged equipment to secure its long-term loan worth USD 12 million.

Western Mindanao Power Corporation (WMPC) has mortgaged land and building and pledged equipment to secure its long-term loans worth USD 20 million.

Nam Theun 2 Power Co., Ltd. (NTPC) has mortgaged company’s assets to secure its long-term loans worth USD 500 million and Baht 20,000 million.

Quezon Power (Philippines), Limited Co. (QPL) has mortgaged company’s assets to secure its long-term loans worth USD 758.7 million

5.2 Intangible Assets

- Concessions (Power Purchase Agreement and Water Supply Agreement)

Company Power/Water Purchaser Agreement’s characteristic Agreement

period

Enforcement/ Commercial

Operation Date1. REGCO EGAT Long term power purchase

agreement 20 years Dec 7, 1994

2. KEGCO EGAT Long term power purchase agreement

15 and 20 years

Jun 19, 1996

3. GCC EGAT Long term power purchase agreement

21 years Sep. 3, 1998

4 industrial customers Power purchase agreement 21 years Oct 18, 1998. and Oct 25,

1998 2 industrial customers Power purchase agreement 5 years Aug 24, 2005

4 industrial customers Steam supply agreement 5,7 and 10 years

During Jua 2004-Jan

2005 4. SCC EGAT Long term power purchase

agreement 21 years Aug. 23, 1999

2 industrial customers Power purchase agreement 13 years Aug 1, 1999

1 industrial customer Power purchase agreement 10 years Aug 17, 2005


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Company Power/Water Purchaser Agreement’s characteristic Agreement

period

Enforcement/ Commercial

Operation Date3 industrial customers Steam supply agreement 10 and 13

years Aug 1999 and Aug 17, 2005

5. NKCC EGAT Long term power purchase agreement

21 years Oct. 12, 2000

5 industrial customers Power purchase agreement 15 years Jan 15 2000 and Nov 1,

2000 2 industrial customers Steam supply agreement 15 years Nov 1, 2000

6. EGCO COGEN

EGAT Long term power purchase agreement

21 years Jan. 28, 2003

15 industrial customers

Power purchase agreement 15 years Feb. 1– Sep 26, 2003

1 industrial customers Power purchase agreement 3 years Mar. 1, 2003

1 industrial customers Power purchase agreement 3 years July 28, 2004

1 industrial customer Steam supply agreement 15 years Mar 1,2004

7. Roi-Et Green

EGAT Long term power purchase agreement

21 years May 29, 2003

8. GYG EGAT Long term power purchase agreement

25 years Nov 28, 2006

9. Egcom Tara

PWA Long term water supply agreement

30 years Apr 7, 2001

10. NMPC-1 National Power Corporation (Philippines)

Power purchase agreement 10 years Jul. 31, 1993

11. NMPC-2 National Power Corporation (Philippines)

Power purchase agreement 12 years Dec 8, 1993

12. WMPC National Power Corporation (Philippine)

Power purchase agreement 18 years Dec 31, 1998

13. SPPC National Power Corporation (Philippines)

Power purchase agreement 18 years Apr. 28, 1998

14. QPL Meracol Power purchase agreement 25 years May 30, 2000

- Right in long-term power and tap water purchase

Right in long-term power and tap water purchase represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net assets of the acquired subsidiary undertaking or joint ventures at the date of acquisition. Right in long-term power and tap water purchase on acquisitions of subsidiaries and joint ventures is reported as an intangible asset and included in interests in joint ventures, respectively in the consolidated


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balance sheet. Right in long-term power and tap water purchase is amortized using the straight-line method over its estimated useful life. Management determines the estimated useful life of goodwill based on its evaluation of the respective companies at the time of the acquisition, considering factors such as existing market share, potential growth and other factors inherent in the acquired companies.

One of EGCO’s tangible assets is a good will which occurred from businesses acquisition. In 2009, the net good will was worth 181,646,649 baht.

5.3 Investment and Management Policy in Subsidiaries and Joint Ventures

EGCO sets its corporate vision “to be the leading Thai integrated electric power Company with comprehensive energy services in Thailand and in the ASEAN region, with full commitment to environment protection and social development support. In this regard, EGCO has identified its key long term objectives as follows. 1. Invest in the business in which EGCO Group has expertise to maximize profit and

create growth to the Group with the acceptable risks, 2. Allocate the appropriate shareholding proportion in its investment to possess the

governing right over joint venture companies, 3. Uphold the investment basis of Non-recourse or Limited Recourse Project Finance

with clear sponsor support and contingent liability, 4. Support Corporate Social Responsibility projects and comply to all governing laws.

The Company expects all of its subsidiaries and joint ventures to operate their business

in compliance with its corporate vision and mission, the code of conduct, the corporate governance principles and acceptable risk profiles. In addition, we expect all of the Group companies to carry out their business in accordance with the following values:

- To conduct business with honesty, integrity and ethics. - To carry out business in compliance with all applicable business and

commercial laws. - To show respect and take into account the local traditions and cultures. - To use natural resources in an efficient and environmentally responsible

manner. - To carry out their responsibilities in a professional manner and with team

spirit. The Board of Directors oversees the subsidiaries and joint ventures via the support of

the Group Business Committee in accordance with the following guidelines.

- Implementing core policies via EGCO Group employees who are assigned to be directors, management or shareholders of those companies. These representatives must seek advance concurrence from the Board of Directors upon the substantial matter of events,


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- Incentivizing Group companies to achieve corporate goal using a performance linked based KPI.

- Monitoring the progress and the operation of the subsidiaries and joint ventures via the Asset Management and Planning with monthly reports to the Board and the Group Business Committee. Should there be any urgent matters for which the immediate action is required; such matters will be duly reported to the Board on the first occasion.

Part 2 Section 6 Future Projects

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6. Future Projects


Part 2 Section 7 Dispute

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7. Dispute

EGCO is not involved in any legal dispute based on the following definition.

• Legal case that has negative impact on EGCO and its subsidiaries with the size larger than 5% of the shareholders’ equity as at the end of the accounting year.

• Legal case that has significant impact on EGCO business.

• Legal case which is not related to EGCO’s normal business.

Part 2 Section 8 Capital Structure

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8. Capital Structure The Company’s securities (1). EGCO’s registered capital and paid up capitals as of December 31, 2009 is shown below. Registered Capital

: 5,300 million baht comprising 530,000,000 ordinary shares with the par value at 10 baht per share.

Paid Up Capital

: 5,264.65million baht comprising 526,465,000 ordinary shares with the par value at 10 baht per share.

As at December 31, 2009, the numbers of NVDR (Non-Voting Depository Receipt) amounted to 41,216,942 units or 7.83% of the registered shares. The NVDR holders have no voting right at the shareholders’ meeting. Any shareholders who need additional information on the NVDR can look for the information at www.set.or.th/nvdr/ Comparing to 2008, EGCO’s shares had a lot movement in 2009 with the highest trading price at 80.25 baht on July 23, 2009 and the lowest trading price at 64.50 baht on March 19, 2009. The average price/earning ( P/E ratio) was 5.26 in 2009.

(2) Other Securities

KEGCO’s Amortizing Secured Debenture No. 1 due in 2011. The details is shown below.

Type : Secured debentures in a registered form with collateral agent

Tenure : 15 years starting from the issuance Total Value of All Debentures Offered

: 7,500,000,000 baht

Total Debentures Issued : 750,000 units Par Value : 10,000 baht Offering Price/Share : 10,000 baht Issuance Date : June 14, 1996 Redemption Date : June 14, 2011Interest Rate : 11.56% per annumInterest Repayment Date : Every 6 months on December 14, and

June 14 every year Principal Repayment Date : in installment every 6 months on

December 14, and June 14 every year with the first payment on December 14, 1996

The Outstanding Debenturesas of December 31, 2007

: 750,000 units

The Outstanding Principal as of December 31, 2009

: 1,428,135,000 baht

Credit Rating as of December 31, 2009

: AA- ( by Thai Rating and Information and Service Co., Ltd on December 1, 2009)


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(2) Any commitment among major shareholders and the Company, which will affect the issuing and offering securities or the management of the Company

-None-

8.2 Shareholders

The top ten shareholders as of September 8, 2009, the closing date of shareholders’ roster for the right to receive the interim dividend payment on September 17, 2009, are as follows.

No. Shareholders /1 Shares % of Total

1. Electricity Generating Authority of Thailand 133,773,662 25.41 2. OneEnergy Thailand Ltd. 118,023,606 22.42 3. Littledown Nominees Limited 19,226,428 3.65 4. Chase Nominees Limited 1 16,209,700 3.08 5. Bangkok Life Assurance Public Company Limited 10,019,300 1.90 6. State Street Bank and Trust Company, for London 9,055,100 1.72 7. CLP SEA Energy Limited 8,030,572 1.53 8. Social Security Office (Two-types) 6,716,500 1.28 9. State Street Bank and Trust Company for Australia 6,679,229 1.27

10. Chase Nominees Limited 73 6,377,200 1.21 Remarks /1 Excluding 51,990,730 shares under Thai NVDR which account for 9.87% of the total outstanding shares. Such NVDR holders do not have the right to vote at the shareholders’ meeting. Information of investors under Thai NVDR Co., Ltd. is shown on the website: www.set.or.th/nvdr/ Two major controlling shareholders are as follows. 1. Electricity Generating Authority of Thailand (“EGAT”): EGAT was incorporated under the criteria set forth in the State Enterprise Capital Act with the objectives to generate, purchase, transmit and distribute electricity. EGAT also provides the operation and maintenance services and invested in the electricity related business. As the major shareholder, EGAT has four representative directors of all 14 directors 2. OneEnergy (Thailand): OneEnergy (Thailand) is a a 50:50 joint venture between CLP Holding Limited and Mitsubishi Corporation. OneEnergy Limited has the objective to invest in power business in the Southeast Asia and Taiwan. As a major shareholder, OneEnergy (Thailand) has four representative directors in the Company.

8.3 Company’s dividend payment policy

In the absence of unforeseen circumstances, the Company has a policy to dividend approximately 40% of the net profit after taxation, or to increase the dividend amount in a


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steady manner, to the shareholders. This dividend policy may change in the light of investment opportunities that may become available to the Company or as a result of other economic or financial factors or when a dividend payment may have a significant impact on the normal operation of the Company”.

The controlling subsidiaries have a policy to dividend to their shareholders 100% of the net profit after taxation and legal reserve.

The details of the dividend payment for the past 5 years.

Approval Date

XD Date

Payment Date

Dividend (Baht/ Share)

Operation Period

August 24, 2009 September 8, 2009

September 17, 2009

2.50 January 1, 2009-June 30, 2009

February 23, 2009 March 10, 2009 May 6, 2009 2.50 July 1, 2008-December 31, 2008

August 28, 2008 September 1, 2008 September 11, 2008

2.50 January 1, 2008-June 30, 2008

February 25, 2008 April 1, 2008 May 7, 2008 2.50 July 1, 2007-December 31, 2007


2.25 January 1, 2007-June 30, 2007

February 26, 2007 March 28, 2007 May 8, 2007 2.00 July 1, 2006-December 31,2006


2.00 January 1, 2006-June 30, 2006

March 20, 2006 March 29, 2006 May 10, 2006 1.75 July 1, 2005-December 31, 2005


September 20, 2005

1.50 January 1, 2005-June 30, 2005


September 23, 2004

September 1, 2004

September 22, 2004

1.50 January 1, 2004-June 30, 2004



September 22, 2003

1.25 January 1, 2003-June 30, 2003

March 26, 2003 April 3, 2003 May 19, 2003 1.25 July 1, 2002-December 31, 2002


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REGCO and KEGCO have the policy to pay their dividend to their shareholders at 100% of the net profits after tax, legal reserve and other reserve accounts applied to terms and conditions of their credit facility documents. In addition, REGCO and KEGCO have to maintain their Debt Service Coverage Ratio for the previous six-month period not less than 1.2 and 1.1 respectively.

Part 2 Section 9 Management 2

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9. Management

9.1 Structure of the Board of Directors

• Electricity Generating Company Public Limited The Board of Directors has main responsibility to conduct business in a way that will benefit EGCO, shareholders and stakeholders including the employees and communities where EGCO operates its business. In this regard, the Board works with the Management in formulating EGCO’s vision and policy and to approve the corporate budget. Currently, the Board comprises 15 members:

• 14 non-executive directors (including six independent directors), and • President, the only one executive member.

The Board of Directors and their share ownership in EGCO as of December 31, 2009 are as listed below:

Name Position Appointment Date

No. of shares No. of SharesDecember

31, 2009 December

31, 2008 Increase

(Decrease)

1. Mr. Pornchai Rujiprapa Chairman January 1, 2009 - - - 2. Mr. Aswin Kongsiri Independent

Director / Vice Chairman

April 24, 2009 - - -

3. Mr. Chaipat Sahasakul

Independent Director

April 22, 2009 - - -

4. Police Lieutenant General Pijarn Jittirat


April 24, 2009 - - -

5. Mr. Thanapich Mulapruk Independent Director

April 23, 2007 - - -

6. Mr. Somphot Kanchanaporn


January 28, 2008 - - -

7. Mr. Phaiboon Siripanoosathien


September 9, 2008

- - -

8. Mr. Apichart Dilogsopol Director January 1, 2009 - - - 9. Mr. Somboon Arayaskul Director January 1, 2009 - - - 10. Mr. Wisudhi Srisuphan Director January 1, 2009 - - - 11. Mr. Peter Albert Littlewood Director April 21, 2008 - - - 12. Mr. Hideaki Tomiku Director April 23, 2007 - - - 13. Mr. Mark Jobling Director June 22, 2009 - - - 14. Mr. Shinji Tsuchiya Director June 22, 2009 - - - 15. Mr. Vinit Tangnoi President October 1, 2008 - - -


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The lists of directors who retired or resigned in 2009 together with their share ownership in EGCO are as shown below.

Name Position Retiring/ Resigning Date

No. of shares No. of Shares December

31, 2009 December

31, 2008 Increase

(Decrease) 1. Mr. Sombat Santijaree Director January 1, 2009 - - - 2 Mr. Narongsak Vichetpan Director January 1, 2009 - - - 3 Mr. Visit Akaravinak Director January 1, 2009 - - - 4 Mrs. Wattanee Phanachet Independent

Director April 24, 2009 - - -

5 Mr. Mark Takahashi Director June 22, 2009 - - - 6 Mr. Hideo Kuramochi Director June 22, 2009 - - -

Independent Directors The Board in the meeting no. 7/2008 on September 8, 2008 had early adopted the definition of independent directors to comply with the qualifications of independent directors stated in the notification of the Capital Market Supervisory Board no. 14/2008 re: “Filling for and Approval of Newly Issued Shares” before the effective date. Under such definition, EGCO independent director shall have the following qualifications.

1. Holding shares not more than 1% of the paid-up capital with the voting right of EGCO, parent company, subsidiary company, associated company or any legal entity that may have the conflict of interest (including the connected persons as stipulated in section 258 of securities laws)

2. Not being a director that takes part in the management (executive director, director who has the same responsibility as management except for the signature in transactions approved by the Board and the joint signing with other directors), employees, advisors who receive regular salary, and controlling person of EGCO, parent company, subsidiary company, associate company and fellow subsidiary (subsidiary of the same holding company) or any entity that may have a conflict of interest during the period of two years before his/her appointment.

3. Not being a person who is related by maternity and by registration as parents, spouse, brother, sister, and son and daughter including their spouses of the management, or major shareholders, controlling persons or persons who will be nominated to be the Management or controlling persons of EGCO or its subsidiaries.

4. Not having business relationship with and not being a major shareholder, non-independent director or management of EGCO, parent company, subsidiary company, associate company or any entity that may have a conflict of interest in a way that would affect the giving of independent opinions during the period of two years before the filing date.

5. Not being an auditor or a major shareholder, director, management or partner of the audit firm that provides auditing services to EGCO, parent company, subsidiary company, associate company or any entity that may have a conflict of interest during the period of two years before the filing date.

6. Not providing any professional service or being a major shareholder, non- independent director, management or partner of the company that provide professional service which include financial and legal advices with the fee higher than 2 million baht per year during the period of two years before the filing date.

7. Not being appointed as a representative to safeguard interests of EGCO director, majority shareholders or shareholders who are related to EGCO’s majority shareholders.


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

The Nomination and Remuneration Committee shall review the appropriateness of the independent director definition. Currently, there are 6 independent directors of all 15 directors who meet the above qualifications which accounts for more than one-third of all directors. Authorized Directors EGCO determines that the authorized directors comprise the President to sign and affix the company’s seal independently, or any two directors to sign jointly and affix the company’s seal. Such authorized directors shall exclude (1) independent directors to maintain their independence under the good corporate governance principle and (2) directors who are also directors of the financial institutions to avoid the limitation that such financial institutions cannot provide future financial service to EGCO. Appointment, Resignation, and Dismissal of Directors The Board of Directors, which comprises not less than five and not more than 15 directors, shall be elected by shareholders, provided that not less than half of them must reside in Thailand. If a directorship becomes vacant for any reason other than by rotation, the Board in the subsequent meeting shall elect a person who is qualified to fill in the vacancy by the votes of not less than three-forth (3/4) of the remaining directors. The director who fills in the vacancy shall retain the office for only the remaining term of office of the director whom s/he replaces. At every annual ordinary meeting, one-third of the directors shall retire from office. If the number of directors is not a multiple of three, the number nearest to one-third must retire from office. Additionally, any director who wishes to resign from office may do so by submitting a resignation letter to the company. Such resignation shall be effective from the date the resignation letter reaches EGCO. In voting for the dismissal of any directors from office before the expiration of his or her term of directorship, a four-fifth (4/5) vote of eligible shareholders present at the meeting shall be required. Board of Directors’ Duties and Responsibilities The duties and responsibilities of the Board of Directors are as prescribed below.

1. Duties to EGCO • To devote time to EGCO and conduct the business in compliance with the governance

principles and EGCO’s Code of Conduct. • To demonstrate independent judgment in overseeing EGCO business. • To have full ethical and legal responsibility towards shareholders while taking into account

the interests of other stakeholders. • To endeavor to recruit competent key management who will fully devote themselves for the

benefit of EGCO. • To monitor EGCO’s business and the compliance with the laws, rules, regulations and

contract provisions and will require the Management to submit report on EGCO’s significant matters to ensure effective corporate performance.

2. Duties to the Shareholders • To endeavor to ensure that EGCO is financially viable, properly managed and constantly improved so as

to protect and enhance the interests of the shareholders. • To endeavor to ensure that the information disclosure is materially correct, complete, transparent and

timely. • To endeavor to ensure that shareholders are treated on equitable basis.


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• Not to submit fault information and to ensure that true and accurate information regarding the operating results and financial position is reported in accordance with the disclosure requirements.

3. Duties to Creditors • To endeavor to ensure that EGCO complies with the loan provision and EGCO’s financial status is

correctly disclosed. • To seek professional advice in case of doubt about the likely impact on lenders such as when EGCO’s

financial position is uncertain or insolvency may be pending. 4. Duties to other Stakeholders • To endeavor to ensure that EGCO complies with the governing laws and regulations while taking into

account the impact on employees, other stakeholders, community, society and environment.

5. Due Diligence • To attend all Board meetings but where attendance at meetings is not possible, directors will

take appropriate step to obtain leave of absence. • To acquire knowledge about EGCO, the statutory and regulatory requirements affecting

directors in the discharge of their duties as EGCO director, and to be aware of the environment that has the impact on EGCO.

• To endeavor to ensure that necessary data are provided in advance to allow adequate time to analyze, make thorough judgment and so discharge the duties of care and diligence.

• To endeavor to ensure independent judgment and in case of dissent to any Board’s resolution, may request the record of objection in the Minutes of Meeting.

• To endeavor to ensure that the system is established within EGCO to provide the Board, on a regular and timely basis, with necessary data to enable directors to make a reasoned and careful judgment.

• To endeavor to make sure that relations between the Board and the auditors are open and that the auditor can work independently and efficiently with the full co-operation from management and the internal auditors.

• To strive to ensure that EGCO complies with the governing laws, rules, regulations and business standard and ethics.

• In any case of doubt in the capacity of directors and committee members, to seek advise from EGCO’s advisors who are experts in each areas and to engage independent advisors for the governance benefits such as legal advisors, financial advisors, HR advisors, other professional advisors on EGCO’s expenses.

Board of Directors’ Performance Appraisal The Board shall approve the self appraisal form which will be reviewed and endorsed by the Nomination and Remuneration Committee. In 2009, the Board adopted the same self appraisal form as 2008. Such form is based on the forms recommended by the New Zealand Institute of Directors and the forms adopted by other peer companies in the energy sector. The self appraisal form comprises two parts: collective appraisal form and individual appraisal form. The collective appraisal form comprises 14 sections, namely (1) shareholders, (2) stakeholders, (3) the Company, (4) legal/ethical duties, (5) monitoring performance and agenda setting, (6) size, composition and independence of the Board, (7) director orientation and development, (8) Board leadership and teamwork, (9) the CEO, (10) Board (and Committee) meetings, (11) individual Board member contributions, (12) director and Board evaluation and compensation, (13) management evaluation, compensation and ownership and (14) succession Planning.


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The individual appraisal form comprises 7 sections, namely (1) strategic thought, (2) good corporate governance, (3) competence, (4) independence, (5) preparedness as a director, (6) personal attributes and (7) awareness of stakeholders. Result of the appraisals as well as directors’ recommendations will be used to enhance the Board’s performance each year. 9.2 Standing Committees’ Structure The Board of Directors has appointed 4 standing committees to help scrutinize significant matters. The details of the standing committees are as follows. Audit Committee The Audit Committee comprises at least 3 independent directors for a 3-year term of service, with one year for this purpose meaning the period between the Annual General Meeting (“AGM”) of shareholders when s/he is appointed and the next succeeding AGM. As at December 31, 2009, the Audit Committee has three members as listed below:

No. Name Position Remarks 1 Mr. Chaipat Sahasakul

Chairman Independent director with finance and

accounting background 2 Mr. Somphot

Kanchanaporn Director Independent director

3 Mr. Thanapich Mulapruk Director Independent director The Audit Committee undertakes its responsibilities as described in the Audit Committee Charter, which is reviewed annually to be consistent with the changing internal and external environment. The responsibilities of the Audit Committee are detailed below. 1. Review the accuracy and adequacy of EGCO’s financial reporting. 2. Review the appropriateness and effectiveness of internal control systems, and internal audit functions

and determine the Internal Audit Division’s independence, as well as to approve the appointment, rotation and removal, and performance development and appraisal of the Chief Internal Audit. The Chief Internal Audit shall present the appointment, rotation, promotion, removal, and performance development as well as appraisal of internal audit staff to the Audit Committee to consider whether the motion of dissent would be raised.

3. Monitor EGCO’s compliance with Securities and Exchange Acts and Regulations of the SET, and any other laws relevant to EGCO’s business.

4. Recommend the Board of Directors an independent person to be EGCO’s auditor as well as the audit fees for appointment by the shareholders to audit EGCO’s financial statements.

5. Attend a non-management meeting with an auditor at least once a year. 6. Consider the connected transactions or any transactions that may cause conflict of interest complying

well as the audit fees for appointment by the shareholders to audit EGCO’s financial statements. 7. Review the Internal Audit Charter prior to submission to the Board of Directors for approval. 8. Approve the internal audit plan as well as budget and personnel. 9. Review the internal audit function, including: independence of internal audit division and reporting

obligation. 10. Review or modify code of conduct prior to submission to the Board of Directors for consideration. 11. Review with the Management to ensure that the Management will act as the role models in complying

with the code of conduct, and that the staffs comply with EGCO’s Code of Conduct. 12. Review with the Management the preparation of the Management’s Discussion and Analysis or MD&A

and its disclosure in the Annual Report. 13. Review with the Management the risk management policy, the practice compliance with such policy, as

well as EGCO’s risk management guidelines.


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14. Prepare a report that describes the Audit Committee’s activities and responsibilities. This report shall be signed by the Chairman of the Audit Committee and published in the annual report to the shareholders. The Audit Committee’s Report shall consist of at least the following information:

(a) an opinion on the accuracy, completeness and creditability of EGCO’s financial report, (b) an opinion on the adequacy of EGCO’s internal control system, (c) an opinion on the compliance with the law on securities and exchange, the Exchange’s regulations, or the laws relating to EGCO’s business, (d) an opinion on the suitability of an auditor,

(e) an opinion on the transactions that may lead to conflicts of interests, (f) the number of the Audit Committee meetings, and the attendance of such meetings by each

committee member, (g) an opinion or overview comment received by the Audit Committee from its performance of duties

in accordance with the charter, and (h) other transactions which, according to the Audit Committee’s opinion, should be known to the

shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Board of Directors.

15. Inspect any suspiciousness reported by EGCO’s auditor, that the President, the Management or any person responsible for EGCO’s operation commits an offence under the Securities and Exchange Act (No. 4) B.E. 2551 and report the result of preliminary inspection to the Office of the Securities and Exchange Commission and the auditor within thirty days after being informed by the auditor.

16. Review the Audit Committee Charter at least annually. 17. Perform any other act as assigned by the Board of Directors with approval of the Audit Committee.

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

The Audit Committee conducts the self-appraisal annually and reports the result to the Board. For 2009, the Audit Committee used the questionnaire which was adapted from the Booklet: “Audit Committee – Good practices for meeting market expectations – 2nd edition” which was studied by PricewaterhouseCoopers’ Global Corporate Reporting. There were 15 meetings in 2009 of which the attendance rate was 97.77%. Executive Committee The Executive Committee comprises 5 directors of which the office term is the same as their directorship. As at December 31, 2009, the Executive Committee comprises the following directors.

No. Name Position Remarks 1 Mr. Pornchai Rujiprapa Chairman Non-Executive Director 2 Mr. Apichart Dilogsopol Director Non-Executive Director 3 Mr. Mark Jobling Director Non-Executive Director 4 Mr. Hideaki Tomiku Director Non-Executive Director 5 Mr. Vinit Tangnoi Director Executive Director

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

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


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2. To consider and to approve investments and divestments of assets, credit, borrowings, debt restructuring, expenditures, other financing transactions and financial instruments, according to EGCO’s table of authority approved by the Board.

3. To formulate the overall investment strategy and investment policies in line with the EGCO’ s own policy, and to approve investment guidelines and investment requests in accordance with EGCO’s regulations.

4. To consider and take action on other important issues relating to EGCO’s operations.

5. To screen issues and make recommendations prior to their submission to the Board.

6. To propose the establishment and assessment of corporate KPI for approval by the Nomination and Remuneration Committee.

7. To propose/endorse the organizational structure, restructuring and governance of EGCO (Division level up)

8. To consider issues which are assigned by the Board. There were 12 meetings in 2009 of which the attendance rate was 96.66%.

Nomination and Remuneration Committee The Nomination and Remuneration Committee comprises 4 directors for a 3-year term of service with one year for this purpose meaning the period between the AGM of shareholders when s/he is appointed and the next succeeding AGM. In order to maintain continuity, members may be re-elected.

No.

Name Positon Remarks

1 Mr. Mark Jobling Chairman Non-Executive Director 2 Mr. Somboon Arayaskul Director Non-Executive Director 3 Mr. Aswin Kongsiri Director Independent Director 4 Mr. Phaiboon Siripanoosatien Director Independent Director

The mission of the Nomination and Remuneration Committee is detailed below. 1. To recommend the structure and composition of the Board and committees together with the

qualification of its members.

2. To recommend the list of nominees for the Board of Directors to be proposed to the shareholders’ annual general meeting in case of vacancies by rotation and to the board in case of casual vacancies.

3. To recommend committee members as well as directors to oversee the functions and participate as members in EGCO’s risk management committee.

4. To scrutinize the list of nominees for EGCO President in case of vacancy including the establishment of the succession plan for executives.

5. To approve the appointment, promotion, rotation and removal of the senior executives of EGCO (Executive Vice Presidents and Senior Executive Vice Presidents) and to nominate senior executives of subsidiary/joint venture companies that EGCO had the right to nominate for a position equivalent to EGCO’s EVP level and upward.

6. To nominate EGCO representatives to be directors of the subsidiary or associated companies according to equity proportion or shareholders’ agreement.

7. To endorse the performance evaluation of EGCO President.


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

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

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

11. To evaluate the corporate performance of EGCO to determine the bonus and annual salary increase across EGCO Group.

12. To recommend EGCO’s salary structure and other benefits.

There were 9 meetings in 2009 of which the attendance rate was 97.22%.

Corporate Social Responsibility Committee The Corporate Social Responsibility Committee (“CSR Committee”) comprises 5 directors with the President as the Chairman. Two of the CSR Committee members shall be directors/director nominees and the other two shall be Management. The term of office of each CSR director member is three years and can be re-elected. The term of CSR management member is as deemed appropriate by the Board of Directors but should not exceeding their service term. In order to maintain continuity, members may be re-elected.

No. Name Position Remarks 1 Mr. Vinit Tangnoi Chairman Executive Director 2 Dr. Chaiyod Bunyakidj Director Outside Director 3 Mr. Chankij Jearaphunt Director Management

The mission of the CSR Committee is detailed as follows. 1. To consider and endorse EGCO Group social and environment policies for Board’s approval. 2. To review and endorse Group’s strategies and activities to meet Group CSR goals and policies. 3. To endorse annual plan and budget for CSR activities for the Executive Committee and Board’s

approval. 4. To review and monitor progress of CSR activities and to appraise the achievements and the quality of

CSR projects.

There were 2 meetings in 2009 of which the attendance rate was 100%. 9.3 Management Structure The President acts as the head of the Management team which comprises 3 groups as shown below:

• Business Development and Management Group: This group is headed by Senior Executive Vice President (“SEVP”). Under the SEVP, there are three Executive Vice Presidents (EVP) who supervise the business development (international), business development (domestic) and asset management.

• Finance and Corporate Services Group: This group is headed by SEVP with two EVPs to supervise finance and corporate services performance.

• President’s Direct Report Group: This group comprises the strategy and corporate management group headed by an EVP. There are also three divisions which are under the President’s supervision


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namely Controller, Internal Audit and Corporate Secretary. The last two divisions report administratively to the President, but functionally to the Audit Committee and the Board of Directors, respectively.

President

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

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

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

• To ensure the implementation of the policies, plans, and budgets approved by the Board. In this respect, the President is allowed to delegate his authority to other employees but is still accountable for the decision of his delegates. Management Team

The list of the Management team and their share ownership in EGCO as at December 31, 2008 is as follows.

Name Title No. of Shares No. of Shares

December 31, 2009

December 31, 2008

Increase (Decrease)

1 Mr. Vinit Tangnoi President - - - 2 Mrs. Pikul Srisastra Senior Executive Vice

President-Finance & Corporate Services

- - -

3 Mr. John Palumbo Senior Executive Vice President-Business Development & Management

- - -

4 Mr. Chumsak Desudjit

Director – Rayong Power Plant

- - -

5 Mr. Chankij Jearaphunt

Managing Director of KEGCO

- - -

6 Mr. Rasda Pongpaew Managing Director of ESCO

- - -

7 Mrs. Ngamphis Chitphromphan

Executive Vice President -Finance

- - -

8 Mr. Piya Jetasanon First Senior Vice President –Finance Division

- - -

9 Mr. Suvapan Chomchalerm

Senior Vice President –Accounting and Budget Division

- - -


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Corporate Secretary The Board in the meeting no. 6/2008 appointed Ms. Busakorn Kakanumpornwong the Corporate Secretary effective August 18, 2008 with the duty and responsibility as prescribes in the Securities and Exchange Act (No. 4) B.E. 2551. Ms Busakorn also serves as the Board secretary to handle functions to assist the Board as well as to coordinate subsequent actions under the Board’s resolution. Management Committees EGCO has set up the following committees to ensure the appropriateness and efficiency of business management.

Group Business Committee:

The Board of Directors appoints the Group Business Committee which comprises outside professionals and executives of EGCO Group in the appropriate number. The Committee is chaired by the President. The term of office for the outside professionals is 1 year, with a year for this purpose meaning the period between the AGM of KEGCO and ESCO’s shareholders when s/he is appointed as a director and the next succeeding AGM. The term of office for the executives is the same as their executive terms.

Title Position

1. President Chairman

2. Senior Executive Vice President-Finance & Corporate Services Member

3. Director – Rayong Power Plant Member

4. Managing Director of KEGCO Member

5. Senior Executive Vice President and Managing Director of ESCO Member

6. Executive Vice President-Asset Management Member

7. Mr. Kwok Wing Ho Member (outside professional)

8. Mr. Nopporn Phansaengdao Member (outside professional)

9. Mrs. Wattanee Phanachet Member (outside professional)

10. Senior Vice President – Corporate Secretary Division Secretary

The Group Business Committee is accountable for the following responsibilities

1. To act as the Board of Directors of the 100% equity subsidiaries namely KEGCO and ESCO.

2. To oversee that the operating assets comply with laws, regulations, governing documents and company’s regulations.

3. To consider and endorse the business plan, annual budget and KPIs for the operating assets to the Executive Committee for its consideration.

4. To direct asset management function to comply with the corporate plan and budget and meet both the short-term and medium-term corporate targets.

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


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

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

The Group Business Committee’ meetings are called as necessary. In 2009, there were 9 meetings.

EGCO Management Committee: EGCO Management Committee is responsible for formulating business policy of EGCO Group, scrutinizing all proposals to be presented to the Board and standing committees and monitoring the operation of the Group.

Title Position



3. Senior Executive Vice President-Business Development & Management Member



6. Managing Director of ESCO Member

7. Executive Vice President-Strategy & Corporate Management Member

8. Senior Vice President-Corporate Secretary Secretary The EGCO Management Committee meetings are called as necessary. In 2009, the Committee held 14 meetings.

Good Governance Committee:

The President sets up the Good Governance Committee which currently comprises the following members.

Title Position






7. Executive Vice President-Strategy & Corporate Management Member

8. Senior Vice President-Legal Member

9. Senior Vice President-Corporate Communications Member

8. Senior Vice President-Human Resources Member

9. Senior-Vice President-Corporate Secretary Member and Secretary


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Title Position

10. Senior-Vice President-Internal Audit Member and Secretary

The Good Corporate Committee is in charge of the following responsibilities.

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

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

3. To revise the Code of Conduct to suit the business environment and convey it to all employees as well as providing cooperation to promote the practice in the Group.

The Good Corporate Governance Committee meets when necessary. In 2009, there were two meetings.

Risk Management Committee:

The President establishes the Risk Management Committee which comprises of the following members.

Titles Position




4. Director-Rayong Power Plant Member


6. Managing Director of ESCO Member

7. Executive Vice President – Strategy & Corporate Management Member

8. Senior Vice President-Internal Audit Member and Secretary

The Risk Management Committee meets when necessary and directly reports to the Audit Committee. Its responsibilities are as follows.

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

2. To determine the risk management evaluation and mitigation,

3. To monitor compliance with risk management framework

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

5. To report its performance to the Audit Committee and the Board of Director. In 2009, the Risk Management Committee held ten meetings.

Safety Health and Environment Committee:

Titles Position

1. Executive Vice President-Asset Management Chairman


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Titles Position

2. Vice President-Human Resources of Rayong Power Plant Member

3. Vice President-Safety of KEGCO Member

4. Vice President-Safety of ESCO Member

5. Power Plant Manager-EGCO Cogen Member

6. Power Plant Manager-Roi Et Green Member

7. Manager-Tap Water of Egcom Tara Member

8. Senior Vice President-Asset Management Memberand Secretary

9. Assistant Vice President-Asset Management Member and Assistant Secretary

The Safety Health and Environment Committee is in charge of the following responsibilities.

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

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

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

4. To improve and develop the SHE implementation of EGCO Group. In 2009, there were 3 Safety Health and Environment Committee meetings. 9.4 Director and Management Selection To ensure the appropriateness of director and management selection for efficient governance, EGCO sets up the following framework. Director Election and Appointment EGCO endeavors to select capable directors to govern the company, designate the corporate policies and sanction its business plans for the benefit of EGCO and shareholders. With respect to this, EGCO puts an emphasis on the director nomination and selection process taking into account the following qualifications and experiences in considering each individual candidates.

1. Legal requirement and regulations and notifications of SET and SEC regarding the directors’ qualifications,

2. Directors’ qualifications prescribed in Directors’ Code of Conduct namely honesty, virtue, initiative and achievement, excellence, accountability, justice, independence, equality of shareholder opportunity,

3. Knowledge and experiences beneficial to EGCO’s business, 4. Trainings and experience at the policy making level in corporate governance, 5. Willingness to represent the best interests of all shareholders, 6. Willingness to devote time and effort to contribute to EGCO’s development.

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


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individually approved at the shareholders’ meeting based on the voting guidelines in the Articles of Association as follows.

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

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

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

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

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

To ensure that shareholders have adequate information to make their selection, EGCO shall present details of a given nominee such as education background, occupation, directorship in other companies, relevant experiences, and illegal acts committed (if any) in the notice of shareholders’ meeting. In case of the re-election, the attendance records and performance during the past year shall also be presented. In the case of casual vacancies, the Nomination and Remuneration Committee will nominate a qualified candidate who does not possess any forbidden characteristics as stipulated under the Public Company Act for approval at the subsequent Board of Directors' meeting. The director who fills in the vacancy shall retain the office for only the remaining term of office of the director whom s/he replaces. The resolution of the Board of Directors in this respect shall consist of not less than three-fourth the votes of the remaining directors. Right of Minority Shareholders To ensure that EGCO treats shareholders equitably, the Board encourages minority shareholders to make recommendation on the director candidates with clear and transparent procedures as posted on EGCO website. Director Orientation and Training All new directors must participate in EGCO’s orientation program. This orientation will include presentations by senior management to familiarize new directors with EGCO’s significant issues, Directors’ Manual and EGCO’s Code of Conduct for Directors and Employees. Any sitting directors and other top management may attend the orientation program. The information of the directors’ manual comprises role, duty and responsibility, Securities’ Dealing by Directors, Notification of Personal Interest of Director, Meeting Management, Disclosure Policy, Contact with management, Board’s and Committees’ Remuneration and Fringe Benefits, Table of Authority and EGCO general information. EGCO encourages directors to attend both in-house and external courses to enhance their knowledge and understanding on good corporate governance. Directors can apply for the training courses at the Thai Institute of Directors or relevant organizations on EGCO’s expenses. Management Selection and Appointment The Board determines policies and principles for selection of the President and policies regarding succession in the event of an emergency or the retirement of the President taking into account educational


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background, experiences, capabilities, ethics and leadership. The Nomination and Remuneration Committee shall consider and propose the qualified candidates to the Board. The President is entrusted to select the knowledgeable, competent and experienced executives in accordance with the qualifications and selection process stated in EGCO Regulation on Human Resource Management B.E. 2550 and the resolution of the Board as follows. 1. The Nomination and Remuneration Committee shall approve the appointment of Senior Executive

Vice President, Executive Vice President, the subsidiaries’ Managing Director and Deputy Managing Director.

2. The President shall appoint the division and section managers. The appointment of Secretary to the Board and the Assistant Secretary to the Board shall be approved by the Board of Directors while the appointment of Division Manager of Internal Audit shall be endorsed by the Audit Committee.

9.5 Director and Management Remuneration EGCO sets the policy to reward directors and management with appropriate remuneration. In this respect, the Nomination and Remuneration Committee is entrusted to review the appropriate rate that takes into account the responsibility and the company’s financial status while being in line with the peer practices. Director Remuneration The guidelines for director remuneration are as follows. • The remuneration comprises monthly retainer fee, meeting allowance and bonus. • Directors who serve as committee members will be entitled to extra remuneration to match the

increased in responsibilities. • The Management who serve as directors and committee members shall refrain from remuneration. In 2009, the Shareholders’ Meeting resolved that the directors’ remuneration comprised the monthly retainer fee and meeting allowance to reflect the liabilities, time devotion and meeting attendance of each director. On the other hand, the bonus payment was tied with the company’s achievement. In conclusion, directors’ remuneration in 2009 comprised the following:

1. Monthly retainer fee of 30,000 baht and meeting allowance of 10,000 baht each. In case of director resignation, retainer fee would be paid to each director/ committee member in proportion of the service time in the month. Members who did not attend the meeting would not receive the allowance, which would also affect the bonus remuneration. Chairman of the Board received 25% additional remuneration for both the retainer fee and the meeting allowance.

2. Bonus of 17.5 million baht taking into account the success of governing the operating assets, the progress of new projects and the recognition on good corporate governance. The allocation would be at the Board’s discretion. The absolute amount of directors’ bonus was 2.5 million baht lower than the 2007’s approved amount of 20 million baht.

The overall directors’ remuneration for 2009 is summarized below.


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No. Name Appoinment

Date

No. of months

in service

Meeting Attendance

(9 Times/Year)

Total Remuneration in 2009

Total Remunerati

on

(Monthly Retainer, Meeting Allowance)

Bonus /2

2009 2008 Director Standing

Committee /1

1. Mr. Pornchai Rujiprapa

January 1, 2009 12 - 8/8 548,500.00 550,000.00 - 1,098,500.00

2. Mr. Aswin Kongsiri April 24, 2009 12 12 6/8 449,700.00 288,000.00 1,243,340.00 1,981,040.00

3. Mr. Chaipat Sahasakul April 21, 2008 12 12 7/8 430,000.00 637,500.00 1,243,340.00 2,310,840.00

4. Police Lieutenant General Pijarn Jittirat

April 24, 2009 8 - 6/8 297,000.00 - - 297,000.00

5. Mr. Thanapich Mulapruk April 23, 2007 12 12 6/8 420,000.00 490,000.00 1,243,340.00 2,153,340.00

6. Mr. Somphot Kanchanaporn

January 28, 2008 12 12 8/8 440,000.00 510,000.00 1,153,550.00 2,103,550.00

7. Mr. Phaiboon Siripanoosatien

September 9, 2008

12 4 8/8 440,000.00 288,000.00 390,270.00 1,118,270.00

8. Mr. Apichart Dilogsopol January 1, 2009 12 - 8/8 440,000.00 480,000.00 - 920,000.00

9. Mr. Somboon Arayaskul January 1, 2009 12 - 7/8 430,000.00 288,000.00 - 718,000.00

10. Mr. Wisudhi Srisuphan January 1, 2009 12 - 8/8 440,000.00 - - 440,000.00

11. Mr. Peter Albert Littlewood April 21, 2008 12 12 7/8 430,000.00 - 1,243,340.00 1,673,340.00

12. Mr. Hideaki Tomiku April 23, 2007 12 12 8/8 440,000.00 480,000.00 1,243,340.00 2,163,340.00

13. Mr. Mark Jobling June 22, 2009 7 - 4/4 229,000.00 429,000.00 - 658,000.0014. Mr. Shinji

Tsuchiya June 22, 2009 7 - 4/4 229,000.00 - - 229,000.00

15. Mr. Vinit Tangnoi April 21, 2008 12 9 8/8 - - 552,585.00 552,585.00


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The summary of remuneration of Retired and resigned directors during 2008-2009 is as shown below

No. Name Retired/ Resigned

Date

No. of

months in service

Meeting

Attendance

(9 Times/

Year)

Total Remuneration in 2009

Total Remunerati

on

(Monthly Retainer, Meeting Allowance)

Bonus /2

2009 2008 Director Standing

Committee /1

1. Mr. Chareon Prajumtan

April 21, 2008 - 4 - - - 379,910.00 379,910.00

2. Mr. Richard McIndoe

April 21, 2008 - 4 - - - 379,910.00 379,910.00

3. Mr. Chumnong Wongsawarng

April 21, 2008 - 4 - - - 379,910.00 379,910.00

4. Mr. Witoon Simachokedee

August 1, 2008 - 4 - - - 345,370.00 345,370.00

5. Mrs. Wattanee Phanachet

April 24, 2009 4 12 2/2 134,000.00 174,000.00 1,243,340.00 1,551,340.00

6. Mr. Mark Takahashi

June 22, 2009 6 12 201,000.00 371,000.00 1,243,340.00 1,815,340.00

7. Mr. Hideo Kuramochi June 22, 2008 6 9 4/4 211,000.00 - 863,430.00 1,074,430.00

Total 6,209,200.00 4,985,500.00 13,148,315.00

24,343,015.0

0

/1 Standing Committee are 1. Executive Committee, 2. Audit Committee, 3. Nomination and Remuneration Committee and 4. Corporate Social Responsibility Committee /2 Bonus for Board of Directors in 2008 was paid in May 2009, as resolved by the Shareholders in the Annual General Meeting No.1/2009 on April 24, 2009 Management’s Remuneration The Management’s remuneration which comprises both salary and bonus are designed in a way that will reflect the corporate and individual achievement based on the remuneration structure approved by the Board. EGCO periodically conducts the survey of the executive remuneration to ensure that the rate is comparable to their work and those of the peer companies. The summary of the Management’s remuneration for 2009 was as shown below.

(Unit : Baht)

2009 Remuneration Executive

Director (1 Person) /1

Management (6 Persons) /2

Total Remuneration

Total Salary - 17,650,840.00 17,650,840.00Bonus/3 - 4,007,737.26 4,007,737.26Meeting Allowance

- - -


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Total - 21,658,577.26 21,658,577.26

/1 Executive Director is defined as director who is also management of EGCO. In this regard, the President is the executive director. He is not entitled to the retainer fee or meeting allowance as member of the standing committees.

/2 These included 6 management namely the President, Senior Executive Vice President –Business Development and Management, Senior Executive Vice President –Finance & Corporate Services, Director-Rayong Power Plant, two Senior Executive Vice Presidents who are seconded to be the Managing Directors of KEGCO and ESCO. Since the salaries of MDs of KEGCO and ESCO are paid by those companies. EGCO is responsible for the remuneration of only four managements.

/3 The 2008 Bonus was paid in January 2009.

Total Remuneration of Core Subsidiaries’ Management

The remuneration of the Management of core subsidiaries (subsidiaries of which the revenue account for more than 10% of the consolidated revenue (KEGCO and EGCO Cogen) in 2009 is detailed below.

(Unit: Baht) Year 2009

KEGCO EGCO Cogen Remuneration Directors

(9 Persons)

Management (7 Persons)

Total Remuneration

Directors (5

Persons)

Management (1 Person) /3

Total Remuneration

Salary - 14,610,192.00 14,610,192.00 - 1,416,000.00 1,416,000.00

Bonus /1 - 6,696,338.00 6,696,338.00 - 552,004.00 552,004.00Meeting Allowance /2

- - - - - -

Total - 21,306,530.00 21,306,530.00 - 1,968,004.00 1,968,004.00 /1 The 2008 bonus was paid in January 2009. /2 EGCO was responsible for the meeting allowance of KEGCO Board. /3 EGCO COGEN Management was assigned from EGCO under the Service Agreement between EGCO and EGCO COGEN.

Other Remuneration

In 2009, EGCO and its core subsidiaries contributed their parts to the provident fund for their respective Managements as follows. (Unit : Baht)

Company Year 2009

Members Provident fund EGCO 4 1,229,274.00 KEGCO 7 1,461,019.20 EGCO Cogen 1 141,600.00


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9.6 Employees EGCO As at December 31, 2009, EGCO has 267 headcounts which include the President, five Senior Executive Vice Presidents and 261 staffs. The number of staffs in each reporting line is as show below:

Key Areas Members (Persons)

1. President 24 2. Business Development and Management 27 3. Finance and Corporate Services 51 4. Strategic and Corporate Management 155. Rayong Power Plant - Operation 69 - Maintenance 46 - Others 35 Total 267

Core Subsidiaries A. KEGCO

Employees Total (person)KEGCO

1. Operation 76 2. Maintenance 54 3. Others 25 Total 155 B. EGCO Cogen There are three permanent staff members who serve EGCO Cogen. The general manager is assigned from EGCO under the service agreement between EGCO and EGCO Cogen. The Operation and Maintenance staffs of 31 headcounts are ESCO employees who work under the O&M service agreement between ESCO and EGCO Cogen. There has been no significant turnover and no illegal labor dispute during the past three years. Employee Remuneration EGCO has the policy that the employees in the Group have fair remuneration which is comparable to the peer companies. Remuneration of employees of EGCO and core subsidiaries in 2009 is as shown below:

(Unit: Baht)

Remuneration Amount

EGCO/1 KEGCO EGCO Cogen/2

Total Salary 222,545,433.33 131,054,424.00 2,633,000.00 Bonus /3 83,822,436.38 60,066,611.00 1,033,426.85 Provident Fund 20,588,420.40 13,079,720.40 2,271,50.00

Total 326,956,289.85 204,200,755.40 3,893,576.85

/1 Include salary and bonus of the executives on one year contract


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/2 Include the salary and bonus of the General Manager who is seconded by EGCO and three permanent employees.

/3 The 2008 bonus was paid in January 2009.

Human Resource Development Policy

EGCO Group believes in the value of our human resources and will strive to be the employer of choice by promoting the participative management with equal opportunity for career advancement. Employees are encouraged to enter the development program to enhance their capabilities to bring out their highest working potentials to undertake tasks in competent manner and maintain our leadership in the business. EGCO Group puts high priority on continuous development of the employee's ability and proficiencies which includes core, functional, and managerial/leadership competencies. In this regard, various projects and training courses have been developed covering individual studies, training with experts or resource persons, and sharing of experiences among peers. As a result, we can develop our employees in all dimensions including intelligence quotient (“IQ”), emotional quotient (“EQ”), moral quotient (“MQ”), and adversity quotient (“AQ”).

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


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The training roadmap for 2009 for core and managerial competencies is as shown below:

- The Manager

- Management Development Program

- 6 Thinking Hats

Senior executives and representative directors in Group

companies

To add new perspectives on duty, responsibilities and knowledge

To develop successors for key positions To support networking

Senior Executives

To add new perspectives on how to create a cutting edges

To support networking

Managers To create awareness on significant issues To develop management competencies To enhance business knowledge

- TLCA Executive Development Program - Great Coach

- NIDA-Wharton Executive Leadership Program - Public Economics Management - Executive Program for Senior Management (EX PSM)

- Director Certificate Program (DCP) - Executive MBA (EMBA)

Middle Managers

To develop a visionary leader with management knowledge and proficiency

To support networking

- Awake @Work (Emergenetics® Brain Based Self-Assessment Tool)

- 7 habits

Officers To develop knowledge on themselves To promote teamwork


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Apart from the above training roadmap, a 5-year human resources development plan (2010-2015) is also formulated to ensure that the employees will be developed in a way that is aligned with the corporate direction and will be successful in meeting both internal and external business challenges.

EGCO Group Human Resource Management Model for 2010-2014

Transformation

Execution People

Vision focus to maximize efficiency and effectiveness

Working environment that - Add value to employees - Promote quality of life - Develop leadership for

จาํนวนชัว่งโมงการฝึกอบรมต่อคนต่อปี ประจาํปี 2552

27.19

39.44

98.22

22.1

0

20

40

60

80

100

120

เอก็โก บฟร. บฟข. เอสโก

2009 training hours/person/year


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Human Resource Training Course for 2010 under Transformation, Execution and People concept

Other information related to the Board of Directors and Management

In 2009, there were no director and management who were recorded to be prosecuted by the following cases.

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

• Bankruptcy or receivership.

9.7 Corporate Governance Report for 2009 The Board of Directors (“Board”) intends to conduct the business under the Good Corporate Governance Principles issued by the Stock Exchange of Thailand (“SET”) and the Best Practices for Directors of Listed Company issued by the Securities and Exchange Commission (“SEC”) to ensure efficient governance and sustainable business growth. 9.7.1 Rights of Shareholders EGCO realizes the importance of Good Corporate Governance and respects the shareholders’ rights as an investor and an owner of EGCO based on acceptable and reliable standard. EGCO encourages the shareholders to exercise their rights including legal basic rights. Examples are the right to share in the profit, the right to receive adequate information, and the right to attend and vote for significant matters at the shareholders’ meeting such as appointment or removal of directors, remuneration of directors, appointment of auditor, auditors’ remuneration and other significant issues which impact on EGCO.


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Beyond such basic rights, EGCO endeavors to provide significant information to shareholders via the website, newsletters and shareholders’ site visit. A. Corporate Governance Policies The Board has established the written corporate governance policies as guidelines for directors, management and employees. The Policies include the statutory rights of shareholders as well as the Best Practices issued by SET. The good corporate governance policies are comprised of 7 principles.

1. Structure and Responsibilities of the Board of Directors 2. Guiding Business Principles 3. Rights and Equitable Treatment of Shareholders 4. Rights of Stakeholders 5. Disclosure and Transparency 6. Internal Control, Risk Management and Code of Conduct 7. Conflict of Interest

The Board annually reviews the good corporate governance policies. In 2009, the Board revised the Good Corporate Governance Policy as follows: • To add policy on directorship holding in other companies to comply with the best practices

recommended by the SET that a director should not serve more than 4 companies if being executive director and 6 companies if being non-executive director except for appropriate case,

• To clearly spell out the principle for considering the director remuneration to be in line with SET’s recommendation on best practices,

• To add the practice that the Vice Chairman would work with the Chairman in reviewing the content of the meeting agenda to comply with the Board’s resolution in appointing the Vice Chairman,

• To add policy on duties to creditors on the section of “rights of stakeholders”, • To add the policy on disclosure of Directors and Management’s Interest in EGCO’s Business to comply

with the Securities and Exchange Act’s requirement, the notification of the Capital Market Supervisory Board and the Board’s resolution in the meeting no. 9/2009.

B. Shareholders’ Meeting The Board ensures that the processes and procedures of the Shareholders’ Annual General Meeting (“AGM”) accommodate the shareholders to take part in EGCO’s governance. With respect to this, the AGM Checklist issued by the Thai Investors Association, Listed Companies Association and SEC is used as the guidelines. Details are as follows. Before the Shareholders’ Meeting EGCO prepares and delivers the notice of the meeting as well as supporting document in advance so that shareholders will have adequate information to support their judgments. The Board also encourages shareholders to attend the meeting either in persons or by proxy. The practices in 2009 were as follows. • EGCO disclosed the schedule and the agenda of the AGM via the SET’s Community Portal system and

EGCO website on February 23, 2009, which was 62 days before the shareholder meeting date. • EGCO delivered the notices of the meeting as well as the agenda document on March 24, 2008, which

was 30 days before the AGM. The notices included the objectives, Board’s opinions, and conditions to attend the meeting. All relevant information was posted on EGCO’s website to facilitate shareholders to study the information in advance before receiving the hard copies. Contact phone number was also provided for any relating inquiries.


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• EGCO joined hands with the Thailand Securities Depository Co., Ltd (“TSD”) to invite shareholders to notify the intention to attend the shareholder’s annual general meeting in advance via IVR system so that EGCO would provide adequate facilities to accommodate shareholders.

• EGCO encouraged shareholders to forward their questions with regard to the meeting agenda in advance to [email protected] or facsimile number 0-2995-0956 in order that the shareholders could gain the utmost benefits from the meeting and that their rights would be fully observed.

On Shareholders’ Meeting Date EGCO ensures that the meeting is conducted in a way that is convenient and transparent as well as encouraging shareholders for open discussion on EGCO business. The practices in 2009 were as follows: • Directors, Management and the external auditor were encouraged to attend the shareholders’ meeting

and answer shareholders’ questions. Fourteen directors which included the Chairman attended the meeting which accounted for 93.33% of the Board members. The chairman and members of each standing committee also presented information to shareholders and answer shareholders’ questions.

• Services to facilitate shareholders who attended the meeting were provided. Map for meeting venue was attached in the notice to the AGM. There were adequate registration counters and refreshments were provided. Mini-exhibition was displayed in front of the meeting hall to provide information about EGCO business.

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

• The barcode system was implemented for the third year to facilitate shareholders’ registration process. • The shareholders who came late were allowed to vote for the ongoing agenda item and the remaining

agenda items • The Chairman convened the meeting in accordance with the priority notified in the agenda document.

Presentation for each agenda item included the background, supporting rationale and proposal. • The meeting was broadcasted via closed circuit television so that shareholders who were outside the

meeting room could follow up the meeting proceedings. • Shareholders were treated equitably and were allowed adequate time to address their concerns at the

meeting. The Chairman paid attention to clarify all shareholders’ inquiries which would be recorded in the minutes of meeting.

• PricewaterhouseCoopers Legal & Tax Consultants Ltd., (“PwCLT”) were engaged as the inspectors to look over registration documents, meeting quorum, compliance of the voting procedure with EGCO Articles of Association and the Chairman’s notification, voting card collection and vote counting. In this regard, PwCLT reported that the meeting and the voting procedure of 2009 AGM was transparent and in compliance with the governing laws and the Articles of Association.

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

In AGM 2009, there were 456 and 681 shareholders attending the meeting in person and by proxy, respectively, representing 412,805,276 shares which accounted for 78.411% of the total units of shares. The attendance rate was better than 2008 AGM in which 298 and 529 shareholders attended the meeting in person and by proxy, respectively, representing 397,459,277 shares which accounted for 75.496% of the total units of shares. After the Shareholders’ Meeting


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• After the AGM no. 1/2009 on April 24, 2009, EGCO posted the draft minutes of the meeting for shareholders’ review on EGCO website www.egco.com on May 7, 2009 which was within 14 days after the meeting date as required by SET. The minutes of meeting had included the significant matter of each agenda items, shareholders’ inquiries and answers by the Board including the resolution and the voting for each proposal. The minutes of meeting was duly filed for future reference.

• EGCO broadcasted on its web site that shareholders who could not attend the meeting could request for VDO tape of the meeting for free of charge.

• EGCO notified the meeting resolution on dividend payment via SET’s portal. EGCO also coordinated with the registrar to ensure that all the shareholders would receive the dividend.

• EGCO took all the recommendations of the shareholders for consideration and improvement of the AGM.

As a result of the above efforts, EGCO was honored as an excellent showcase for AGM of listed companies with the full score of 100. Such score was higher than the score in 2008 of 105 from the full score of 110. C. Shareholders’ Visit The Board sets the principle that shareholders will be invited to visit the Company and meet the management to better understand EGCO business and monitor EGCO’s performance. In 2009, there are 3 shareholders’ visits as follows: • Shareholders’ visit to Kang Khoi 2 Power Plant in Saraburi province • Shareholders’ and investors’ visit to Kang Khoi 2 Power Plant organized by the Thai Investors

Association • Investors’ and analysts’ visit to Nam Theun 2 Power Plant. 9.7.2 Equitable Treatment of Shareholders A. Fair Treatment The Board regularly reviews the governance structure and framework to ensure that the shareholders, including minority and foreign shareholders, are treated equitably and that EGCO procedures do not make it unduly difficult or expensive to observe shareholders’ rights. The Board encourages shareholders to take part in EGCO’s governance and ensures that they are well informed about the significant decisions of EGCO as prescribed by laws and the Articles of Association. • EGCO strictly follows its policy not to raise any agenda items which had not been submitted to the

shareholders in advance, to make sure that other shareholders would have a great deal of time to study relevant information before making their decision. Every shareholder has a right to cast vote according to their numbers of shares on “a one share one vote” basis. EGCO has never granted a privilege for some specific shares which limits the rights of other shareholders.

• To adhere to the best practice as recommended by the SET regarding the right of minority shareholders, EGCO announced via EGCO’s website and the SET’s portal the clear and transparent procedures for shareholders to recommend AGM agenda and to nominate director candidates to the Board during the period of December 17, 2008-January 31, 2009. The shareholders who would like to propose the agenda or director candidates should hold not less than 100,000 shares which are lower than the SET’s recommended practice of holding not less than 0.5% of the total voting rights of the company. In 2009, no minor shareholders recommended AGM agenda nor nominate director candidates in advance.


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

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

• Since most of the shareholders attending the meeting were Thai, the meeting was conducted in Thai. However, to facilitate foreign shareholders, EGCO prepared the notice of meeting in both Thai and English. English interpreting service was also provided at the meeting room.

• With the awareness that some shareholders might not be able to read the minutes of meeting on the SET’s and EGCO’s website, a hard copy of the minutes of meeting no. 1/2009 were delivered to each shareholder for review.

B. Prohibition of Abusive Conduct by Insiders EGCO has set up the written guidelines in the Code of Conduct for Directors and employees to prohibit improper insider trading and abusive conduct by insiders to ensure fairness to all shareholders. Directors • Directors must not make improper use of information acquired by virtue of the directors’ position. • Directors must not disclose matters such as trade secrets, or sensitive business information to outsiders. • Directors must not buy or sell shares as a director of EGCO while in possession of information, which,

if disclosed publicly, would be likely to materially affect EGCO share price. • Directors must not provide to anyone any information which is not publicly available and which would

have a material effect on the price or value of EGCO’s securities. Employees • Employees shall at all times observe the rules and regulations issued by the SET, the SEC and other

governing laws which include the equitable disclosure to shareholders and the public. • Any information disclosure to the public that will affect the business and EGCO’s stock must be

approved by the President. Only the President or the assigned staff member is authorized to disclose such information.

• The Corporate Communications Division, the Corporate Secretary Division and the Investor Relations Section are responsible for disclosing EGCO information to the public while it is the responsibility of the information owner to provide the fact sheets.

EGCO has put the internal control system in place to prevent the leakage of any information before the public disclosure. Such measure was a part of significant risk management. Supervisors also have the responsibility to ensure that the measure to safeguard inside information is effective. Using inside information for own or other benefits of security trading when that information has not made public is considered violating the Code of Conduct. C. Disclosure of Directors and Management’s Interest in EGCO’s Business The Board sets the guidelines that directors and Management discloses to the Board whether they have a material interest in any transaction or matter affecting EGCO to ensure transparency and to prevent conflicts of interest. • Directors will promptly notify EGCO when they or their family member is a partner or shareholder of

any entity which may incur benefits or conflicts of interest with EGCO, acquire a direct or indirect


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interest in any contract made with EGCO or hold shares or debentures of EGCO or any affiliate. Directors or management with potential conflict of interest shall refrain from discussing and voting on such agenda item.

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

In 2009, the Board also set the policy for directors and management including related persons to report their interest in the Company to comply with the Notification of the Capital Market Supervisory Board no. Tor Jor 2/2009 as follows: 1. Directors and executives should submit the form to report their interest to the Corporate Secretary on a

quarterly basis. 2. In case of any change during the quarter, the updated form should be submitted to the Corporate

Secretary as soon as possible. 3. The Corporate Secretary shall submit the form to the Chairman and the Chairman of the Audit

Committee within 7 days after getting such report. In 2009, the Board did not get any complaints for not respecting shareholders’ rights or any accusation regarding director’ and Management’s insider trading. This shows the efficient control of the Board on such matter. 9.7.3 Role of Stakeholders A. Rights of Stakeholders Apart from observing the rights of the shareholders, the Board takes due regard of and deal fairly with various stakeholders and encourages active cooperation with them which include both business and corporate social responsibility matters. The Board has set up the guidelines to respond to the requirements of each stakeholder in the Corporate Governance Principle and “EGCO Group’s Code of Conduct” with the expectations that directors, Management and employees shall be guided by those principles in discharging their duties. Employees A. Rights of the Employees EGCO believes in the value of its human resources and will strive to be the employer of choice. This is achieved by promoting the participative management, supporting the employees’ professional development and providing fair remuneration and suitable benefit scheme. B. Observation of Human Rights It is prescribed in the Code of Conduct that EGCO will treat our employees with respect and honor. At the same time, employees must also refrain from any deliberate discrimination or harassment in word or action against others based on the basis of race, gender, religion, age, and physical or mental disability. EGCO also set clear guidelines for labor engagement of the Company and its business partners to strictly comply with the Labor Act such as no engagement of child labor or abusive hiring. In addition, the working system is designed to put priority on safety and occupational health. There has never been any report on the violation of human rights by EGCO.


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It should be noted that during the past year, there was no legal dispute between the employees and EGCO. In addition, there was no disabling injury in all subsidiaries. EGCO is proud to announce that the Rayong Electricity Generating Co., Ltd. (“REGCO”) and the Khanom Electricity Generating Co., Ltd. (“KEGCO”) have been certified the OHSAS 18001: 1999 (Occupational Health and Safety Assessment Series) by RWTUV (Thailand) and KEGCO has been honored the National Distinguished Workplace in terms of Safety, Occupational Health and Environment for 10 years consecutively. Customers EGCO always commits to provide good quality and reliable services in accordance with the agreements with EGAT and all customers. To ensure consistent quality service, the ISO 9001:2000 has been implemented at REGCO, KEGCO, Roi-Et Green Co., Ltd. and Egcom Tara Co., Ltd. During the past year, EGCO and its subsidiaries could generate the contracted electricity with higher equivalent availability factors (“EAF”) than the value stipulated in the power purchase agreement. REGCO also made a superior record in being awarded the EAF bonus for 13 years consecutively. EGCO also prepared our power plant to meet any system emergency. It was notable that Rayong Power Plant’s ability could quickly execute the restoration plan in case of brown out using black start emergency diesel in order to power up the eastern region. As such, it is put in the restoration plan of the Electricity Generating Authority of Thailand, the Provincial Electricity Authority and the Metropolitan Electricity Authority. The testing of the restoration plan is carried in each region every year. Creditors EGCO will endeavor to ensure that it complies with the loan provision and that the company financial status is correctly disclosed. The Company will endeavor to solve the problem in case of doubt about the likely impact on lenders such as when the company’s financial position is uncertain or insolvency may be pending. Suppliers and Contractors EGCO will treat suppliers and contractors fairly and would not seek undue benefit from them. EGCO will comply with the conditions in the agreements. In addition, EGCO aims at developing and securing sustainable relationship with suppliers and contractors on the bases of value for money, technical conformance and mutual trust. Competitors EGCO will conduct its business on a fair play basis. We will not use a disgraceful approach such as bribery in order to get competitors’ sensitive confidential information. EGCO will also refrain from attacking the competitors with false allegations. Community, Society and Environment EGCO has a policy to operate the business with commitment to social contribution and environment conservation. In this regard, EGCO will foster the corporate culture that employees at all levels will be fully responsible for any social and environment impact when discharging their duties. EGCO also sets guidelines in the Code of Conduct that employees must deliver their duties in a safe manner to avoid any impact on themselves as well as people living and working in communities near our facilities, and the environment. Our employees will strive to comply with relevant laws, prevent accident and pollution, and will use the natural resources in an efficient and environmentally responsible manner. In addition, EGCO has implemented the social projects which cover the followings:


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• Promotion and Development of Community's “Quality of Life”: EGCO Group will put the prime

focus on the quality of life of the surrounding communities both at the head office and at the power plants. In this regard, EGCO has initiated and provided supports to projects relating to education, villagers’ occupation and environment.

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

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

In 2009, there was no claim against EGCO from the stakeholders. Detailed information on Corporate Social Responsibility is presented in the Sustainability Report on page xx. B. Channel to Direct Corporate Issues to the Board of Directors and Corporate Secretary To increase the corporate value, the stakeholders can direct their recommendations and concerns on corporate issues to EGCO at the following address. Electronic mail Telephone numbers Board of Directors [email protected] - Audit Committee [email protected] - Corporate Secretary [email protected] 0-2998-5021-5 Corporate Communications [email protected] 0-2998-5131-3 Investor Relations [email protected] 0-2998-5145-7 The mailing address is Electricity Generating Public Company Limited, EGCO Tower, 222 Moo 5, Vibhavadi Rangsit Road, Tungsonghong, Laksi, Bangkok 10210. The Corporate Secretary will be responsible for forwarding communications directed to the Board to the standing committee or relating directors. The Corporate Secretary will summarize all directors’ communications received during the most recent quarter to the Board, except for mails addressed to the Audit Committee which would be directly forwarded to the Audit Committee without screening. C. Whistleblower System and Whistleblower Protection The Board has set the channels for whistle blower programs at both management and director levels. For management channel, the report on any suspected violation or crime shall be made to the supervisor and the Good Corporate Governance Committee. For the Board’s channel, such report can be directed to either the Board or the Audit Committee. The procedure to protect the whistleblower is also put in place. For example, information will be kept confidential and will be known only among responsible parties. The whistleblowers can identify themselves or can keep their identities anonymous. However, they must provide adequate information for the Company to investigate the claims. D. Sustainable Development EGCO Group endeavors to optimize the usage of natural resources, taking into account the impacts on the environment. In this regard, EGCO has monitored the situation and set the measures to alleviate such impacts. In addition, REGCO and KEGCO have implemented the Occupational Health and Safety


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Management System TIS 18001:1999 & OHSAS 18001. EGCO Group also factors in the following activities to ensure that EGCO business has taken into account the social and environment issues for sustainable development.

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

Investing in renewable projects to alleviate global warming and decrease the fossil fuel import. Operating business with environment concern and strict adherence to relevant laws and regulations

including the regulations of local administrative agencies. Supporting economic and social development while respecting the local tradition and culture. EGCO

will support the government policy and take a good care of communities surrounding the power plants so that they will not only be protected from the negative impact of EGCO business, but will also have a better quality of life.

EGCO set up a Corporate Social Responsibility (“CSR”) Committee to oversee the management of environment and society with a focus on impacts to shareholders and stakeholders. In 2009, EGCO set CSR plans and activities covering safety, health and working environment along with social responsibility plans to foster environment conservation, community learning, and quality of life. Details are presented in Sustainability Report. In 2009, EGCO was selected a candidate for CSR Award in the 2009 SET Awards for the second year. In addition, Group companies also won the following awards. • KEGCO won the EIA monitoring Awards for 7 consecutive years, National Safety Awards for 2009”

for the 10 consecutive years and Outstanding Achievement on Labor Relations and Welfare” for 3 consecutive years.

• Roi Et Green Co., Ltd won the Provincial Safety Award” for 2 consecutive years • EGCO Engineering and Services Co., Ltd. (“ESCO”) was awarded the Gold Certificate for HIV/AIDS

and TB Prevention and Management in the Workplace by Ministry of Labor and Ministry of Public Health.

• EGCOM Tara Co., Ltd. was presented the Certificate for Quality of Drinking Water for 7 consecutive years, Certificate audit for Environment Management System: EMS Stage I and excellent healthy workplace for 3 consecutive years.

9.7.4 Disclosure and Transparency A. Information Disclosure Being aware of the impact of EGCO’s information on the decision of investors and stakeholders, the Board set a policy to disclose the information via the SET’s Community Portal system and the Company’s web site at www.egco.com as well as the annual report and the annual registration statement. The disclosed information includes roles and responsibility of the Board and standing committees, directors’ meeting attendance, and remuneration policy for Directors and top management. Only the President or the assigned staff member is authorized to disclose the Company’s information. EGCO has established a Disclosure Committee comprising President, Senior Executive Vice President-Finance and Corporate Services, Senior Executive Vice President-Business Development and Management, Senior Vice President-Corporate Secretary, Senior Vice President- Corporate Communication and Vice-President-Investor Relations. The meetings are called on quarterly basis in order to set communication plan, review disclosure policy, and prepare significant disclosure to ensure that the information is correct and efficiently communicated.


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Investor Relations Investor Relations is responsible for communication with institutional and individual investors, and analysts on an equitable basis. In this regard, annual Investor relations plan is prepared. EGCO puts priority on sharing information via investor relations activities. Senior management always takes parts in providing information to investors and analysts to create understanding on the Company, promote the relationship, and encourage them to provide the feedback to the Company. Significant activities in 2009 included meeting investors in SET in the City in Bangkok, Nakorn Rachasima and Chiang Mai. Two trips were arranged for investors’ and shareholders’ visits to Kang Khoi 2 Power Plant and one trip for investors’ and analysts’ visit to Nam Theun 2 Power Plant. Besides, there were four analyst meetings in Thailand and three overseas road shows to the United States, Hong Kong and Singapore. On top of the above mentioned, there are also newsletters and electronic mails. For those that cannot join the investor relations activities, EGCO has posted the presentations, operating results, financial statements and notice to the SET on our web sites. Corporate Communications The Corporate Communications Division is responsible for communicating the movement of the Company to media for public disclosures. Major events in 2009 included 3 press conferences on corporate results and directions, 4 media trips, 20 executive Interview and 30 pieces of press releases. Corporate Secretary The Corporate Secretary discloses information as required by the SET and SEC on a correct and transparent basis. In 2009, 11 notifications were made to the SET. EGCO always updates the information on EGCO website. Quality of the disclosure was assessed after every meeting with shareholders, investors and analysts for future improvement. In addition, EGCO also attached the feedback form for shareholders to provide feedback on the quality of the annual report, additional document required, and questions for the President to answer in the next AGM in the annual report and the notice to the AGM. Such feedback form was well received by shareholders. B. Financial Statement Preparation EGCO aims at fostering the stakeholders’ confidence that EGCO’s financial reports are accurate, complete and transparent in line with the generally accepted accounting standards to protect EGCO assets against fraud or abnormalities. In this regard, the Board has entrusted the Audit Committee to assume key duties and responsibilities of reviewing the financial statements to ensure its correctness and adequacy and compliance with the accounting standards and relevant regulation. The Audit Committee sets the policy to have a non-management meeting with the auditor at least once a year to ask questions and discuss with them about various significant issues. Apart from disclosing the Auditor Report in the annual report, the Board also prepares the report on Board of Directors’ Responsibilities on Financial Statements which covers important topics as prescribed in the SET’s Best Practices for Directors of Listed Companies. In 2009, EGCO appointed auditors from PricewaterhouseCoopers ABAS Limited as the Company’s auditor given that they had professional knowledge and had no conflicts of interest to defect their independent judgment. This was aimed at fostering the Board’s and shareholders’ trust that EGCO’s financial statements truly reflected the actual financial status and operating result. EGCO also prepares the report on Management Discussion and Analysis to provide analytic information on the Company’s financial status, operating results and major changes to investors and analysts on a quarterly basis. Such report is submitted via SET’s portal along with the Company’s financial statements.


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It should be noted that SEC has never informed EGCO to re-state the financial statements. In addition, the quarterly and annual financial statements are disclosed before the deadline. On top of that, EGCO is honored the Certificate of Excellence from IR Magazine, Singapore and also the Certificate on Distinguish Exhibition Booth on information provision from the 2009 SET in the City in November, 2009. 9.7.5 Responsibilities of the Board A. Board’s structure Structure and Composition Currently, the Board comprises not less than 5 directors and not more than 15 directors as stipulated in the Articles of Associations. The number of the directors will be reviewed periodically. The change in number of directors requires the shareholders’ approval with the four-fifth majority votes of shareholders who attend the meeting and have the rights to vote. As at January 31, 2009, the Board comprised 15 directors, 14 of whom were outside directors which accounted for 93% of the Board. From these outside directors, 6 were qualified as independent directors which accounted for 40% of the total directors. The Nomination and Remuneration Committee is entrusted to select and recommend prospective nominees, whether they are to become the shareholders’ representatives or independent directors. The Nomination and Remuneration Committee is also responsible for assessing the appropriate mix of skills and characteristics required of Board members in the context of the needs of the Board at a given point in time and shall periodically review and update the criteria as deemed necessary. The Board views that the existing structure and composition of the Board which comprises directors with the background in engineering, economics and finance, and laws and political science at the ratio of 46.67%, 26.67%, and 26.67% respectively, was appropriate with useful mix of skills and experience and an appropriate balance of power. Term and Age Limit One third of the directors shall retire by rotation at the AGM as prescribed in the Public Limited Company Act. The Board views that there should not be limit on the number of terms a director may serve. Term limits may cause the loss of experience and expertise important to the optimal operation of the Board. However, to ensure that the Board remains composed of high functioning members able to keep the commitments to Board service, the Nomination and Remuneration Committee will evaluate the qualifications and performance of each incumbent director before recommending the nomination of that director for an additional term. On the other hand, the age limit policy is imposed that director candidates can not stand for election after age 72. Given such age limit on the election date, directors will be able to serve on the Board until the expiry of their terms. Chairman The Board elected Mr. Pornchai Rujiprapa, a representative director of EGAT, as the Chairman because of his knowledge in energy sector together with his leadership to lead EGCO to achieve the corporate vision and mission. Although the Chairman is not an independent director, the Board remains independent and objective due to the following mechanisms:

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


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Management via the President. The Board will not intervene with any routine activities under the President’s responsibilities;

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

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

4. The Board has appointed the Vice Chairman who is an independent director to work with the Chairman in setting and scrutinizing the meeting agenda and the time allocation for each agenda item; and

5. The Board has assigned Board committees to oversee tasks where there may be a potential for conflict of interest and to balance the need of each stakeholder. With respect to this, the Audit Committee is entrusted for oversight of the integrity of financial and non-financial reporting and review and management of related party transaction. The Nomination and Remuneration Committee is assigned to take care of selection of Board members and key executives and their remuneration.

The result of the Board’s performance appraisal in 2009 indicates that the Chairman is effective in leading the meeting and encouraging directors to participate in the debate around the Board table. Independent Director There are six independent directors on Board which is larger than one/third of the whole Board. Independent directors set up the policy to call meetings as needed. In 2009, there were 2 independent director meetings to discuss and exchange their views regarding the corporate governance and interesting issues without the Management and the result was reported to the Board. (Please see the definition of independent director in the article “Shareholding and Management Structure”.) Policy and the Procedure for Other Positions of Directors and Management To ensure that the Board will be able to devote time for the efficient governance of EGCO, the Board agrees that a director should not serve more than 4 companies if being executive director and 6 companies if being non-executive director. Currently, there is one director who serves more than 6 companies. However, such positions do not have any impact on discharging his duty for EGCO as he regularly attends the meeting and provide useful information to the Company. The Board has already taken into account his meeting attendance as one of the criteria for his re-election. As regards themanagement, each of them should not hold directorship in more than 3 companies excluding the wholly owned subsidiaries to ensure sufficient time for their governance. Corporate Secretary The Board has appointed Ms. Busakorn Kakanumpornwong as the Corporate Secretary with the duty and responsibility as prescribes in the Securities and Exchange Act (No. 4) B.E. 2551. Ms. Busakorn also serves as the Board secretary to handle functions to assist the Board as well as to coordinate subsequent actions under the Board’s resolution. • To provide primary advice pertaining to EGCO’s regulations and Articles of Associations, and to

monitor to ensure regulatory compliance on a regular basis, and report any significant changes to the directors,


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• To arrange meetings of shareholders and the Board in accordance with the laws and regulations, including EGCO’s articles of associations and procedures,

• To prepare meeting minutes of shareholders and the Board of Directors, and to monitor to ensure compliance with resolutions of shareholders’ and Board meetings,

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

• To inform general shareholders of their legitimate rights including EGCO’s news, • To facilitate the Board activities including director orientation, • To file and keep record of EGCO’s paper such as directors’ registration, notice to the meeting, minutes

of meetings, annual reports, notice to shareholders’ meetings, shareholders’ minutes of meetings and reports on directors’ and management’ interest.

B. Board’s Standing Committees With the objective to enhance the governance efficiency, the Board assigns directors with knowledge and expertise to be the members of the Board committees namely Audit Committee, Executive Committee, Nomination and Remuneration Committee, and Corporate Social Responsibility Committee. Each Board committee has its own charter which prescribes functions, composition, term of office, responsibilities and meeting conduct. The committee’s charter, which is approved by the Board, will be reviewed as deemed appropriate. Each committee can retain outside counsels, experts and professional advisors, as deems appropriate at EGCO’s expense. The committees will report their meeting results to the Board. The Audit Committee comprises 3 independent directors. The Audit Committee’s mission covers the review of the financial statements, legal compliance, risk management policy, internal control and appointment of auditor. The Audit Committee also reviews the connected transaction or transaction with conflicts of interest to ensure that such transaction is in compliant with the SET’s requirement, well grounded and will be for the best interest of EGCO. The Nomination and Remuneration Committee comprises 4 non-executive directors, two of whom are independent. The Nomination and Remuneration Committee members appointed Mr. Mark Jobling, a representative director from OneEnergy as the Chairman of the Committee as he has a wealth of experience in policy implementation, human resources management and governance management. The Board trusts that regardless of whom the Committee Chairman is represented, the Nomination and Remuneration Committee has the appropriate process and mechanisms to mandate transparent procedure of (1) recruitment of directors and Management in line with the best practices taking into account the recommendations from all shareholders; and (2) transparent and clear guidelines for remunerating directors and Management at a rate comparable to those of the peer companies and aligned with the long term benefit of EGCO and the shareholders. The Executive Committee comprises 5 directors and has the responsibility to screen and endorse for the Board’s consideration the Management’s proposals especially on the investments, funding and relating activities. Exception is made for medium and small sized investment where the Executive Committee can approve business decision with subsequent acknowledgement by the Board. Since this Committee is delegated to approve business decision within its delegated authority, the Chairman of the Board is appointed the Chairman of the Executive Committee. He has proven to be efficient chairman who conducts the meeting efficiently and be attentive to other members’ recommendations both at the Board’s and the committee’s meeting. The Board is considering the revision of the Executive Committee Charter to reflect the actual responsibilities.


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The Corporate Social Responsibility Committee comprises 5 members with the President as the Chairman of the Committee. Two of the CSR members shall be directors/nominees and the other two shall be Management. The Corporate Social Responsibility Committee has the responsibility to oversee EGCO’s positions and practices on issues of corporate social responsibilities, principally in relation to social and environmental matters that affect shareholders and other key stakeholders. The structure and duties and responsibilities of each Board committee as well as the number of meetings are reported in the other article on “Shareholding and Management Structure”.

C. Role and Responsibility of the Board of Directors Duty and Responsibilities The Board members well understand their role and responsibilities including the business of the Company. They well serve the Company with honesty and prudent judgments for the utmost benefit of the Company and the fairness to all shareholders. The Board has exercised independent judgment and devoted time in discharging their duties in accordance with the Corporate Governance Principle as follows. • To set the corporate vision, target and business strategy including risk management policy, annual

budget and business plan as well as setting the corporate performance targets while monitoring the implementation, the result, significant investment cost, acquisition and disposal of the assets;

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

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

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

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

• To monitor the information disclosure and communications; and • To direct self - appraisal annually and declare in the annual report how well they carry out their duties

and oversee EGCO. Leadership and Vision The Board works with the Management in setting the vision, mission, strategies, goals and business plans both over a short and long term. The corporate KPIs are designated for each key area being growth, finance and organization excellence. The Board also endeavors to ensure that the significant working system such as the internal control and risk management are in place. Management performance is also monitored through the President’s report which is prepared on a monthly basis to ensure that EGCO business is carried out in an efficient manner. Code of Conduct To maintain high ethical standards, EGCO has set up a Code of Conduct as a guideline so that directors, Management and employees perform their duties with regard to ethical values. Directors’ Code of Conduct focuses on business ethics, ethics for directors, directors’ commitment, duties and responsibilities, conflicts of interest and use of information. Employees’ Code of Conduct covers 1. Guiding principles, 2. Making the system work, 3. Compliance with laws and regulations, 4. Business ethics, 5. Human resources, 6. Safety, health and environment and 7. Accountability. EGCO continuously conducts the training on adherence to the Code of Conduct for the employees as well as provides clarification on their frequently asked questions. Directors, Management and employees must obey and respect the spirit of the Code of Conduct. Managers at all levels are required to promote the compliance with the Code of Conduct and act as role models. Employees at senior vice president level and


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upward shall review their compliance with the Code of Conduct before signing and submitting the Code of Conduct Compliance Statement to their immediate boss annually. Internal Control and Internal Audit Realizing the importance of having sufficient and suitable internal control at all levels, EGCO clearly determines responsibilities and authority of Management and employees in writing, taking into account segregation of duties, check and balance, and control of Company’s assets. EGCO also set a correct and timely financial report system. Apart from this, EGCO sets up an Internal Audit division which directly reports to the Audit Committee in order to make sure of its transparent auditing process. The Audit Committee has a responsibility to approve internal audit plan, and to consider and review the independence and the performance report of the Internal Audit Division.

The Board sets the policy to annually review EGCO’s internal control system using the questionnaires that were developed in line with the guidelines of the SET and the Committee of Sponsoring Organization of the Treadway Commission (“COSO”). Employees from section managers and upward are assigned to evaluate the quality of the internal control of which the result will be proposed to each subsidiary’s Board of Directors, the Audit Committee and EGCO Board of Directors, respectively. The evaluation result in 2009 showed that EGCO and its subsidiaries had sufficient and appropriate internal control system. The details are presented in Internal Control in this annual report on page xx. To ensure compliance with internal control systems, and rules and regulations, employees of EGCO and subsidiaries at senior vice president level and upward are required to thoroughly review their 2008 work practices before signing the General Representation Letter to their managers up to the President. The President also signed the General Representation Letter addressed to the Chairman of the Board.

EGCO emphasizes on developing the capabilities of internal auditors by self development, experience

sharing and attending inside and outside seminar. The Internal Auditor Division also provides consultation to relevant units to reduce the weaknesses in the system under the proactive audit plan.

Risk Management The Board of Directors entrusts the Audit Committee to review with the Management the risk management policy, implementation and guidelines. The Audit Committee reports the update on risk management issues to the Board twice a year to consider the adequacy and effectiveness of risk management system with focus on early warning system and irregularities so that the strategies, plan and measures can be adjusted or put in place at an appropriate timing. In 2009, EGCO had engaged an advisor to review the Group’s risk management system and to provide recommendations to enhance the practices which include key risk indicators, risk appetite and enterprise risk management. To implement enterprise risk management, the following measures are implemented: • EGCO Risk Management Committee is shored up comprising top management of the Group

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

• Risk Management Section was also set up under Internal Audit Division to be fully responsible and coordinating for risk management.

• Risk management process is embedded into the working process. Management and employees are encouraged to take part in the process and to efficiently use the resources to identify, appraise and manage risks.

• Risk management is implanted into the corporate culture.


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EGCO has adopted the risk management policy and risk management manuals as guidelines since 2001. Risk Management implementation is also included as one of the elements for internal control assessment. The result of such assessment in 2009 indicated that EGCO Group has appropriately implemented risk management system. Conflicts of Interest EGCO has set the policy in the Code of Conduct for directors and employees to avoid the conflicts between the personal interest and the corporate interest as follows. Directors and employees shall not be engaged as directors or advisors of other companies,

organizations, and associations that may conflict with the interest and the business of EGCO. Acknowledgment by the Board must be sought before taking such engagement;

Directors will promptly notify the Board when any of the conflict of interest occurs and must consider whether to refrain from participating in the debate and/or voting on the matter, whether to be absent from discussion of the matter, whether to arrange that the relevant board papers are not sent, or, in an extreme case, whether to resign from the Board;

The list of major shareholders is disclosed. Directors and designated Management will report the change in their security holding to the regulatory body. The Corporate Secretary is assigned to report the security holdings of directors and Management to the Board at every meeting;

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

Transaction that may induce the conflict of interest shall be reported to the Board for consideration. The details of such transaction such as transaction price, contractors, and rationale are to be disclosed in compliance with the requirements of the SEC and SET. The Corporate Secretary will identify the type of transaction and the approval body and will submit the reports on connected transactions and any conflict of interests to the Audit Committee for acknowledgement twice a year and disclose the information in the annual report and annual registration form (Form 56-1).

To foster trust among all concerned parties that the connection transactions are aimed at optimizing the benefits of EGCO and the shareholders, the Audit Committee is assigned to review the information and provide comment with regard to the connected transaction that needs to be approved by the Board and the shareholders and to ensure that the disclosure is adequate. Fraud Risk Management With a view that fraud risk was significant, the Board set a measure to manage fraud risk as follows. • Preventive Measures: The organization is well designed for the purpose of governing and managing

business. The Code of Conduct is prepared in writing and the compliance with the Code is promoted. The internal control system is established and appraised. The whistleblower program is in place.

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

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

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

In 2009, there is no claim or any fraud found in EGCO Group due to the above efficient preventive measures.


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D. Board Meeting To ensure that the Board takes full responsibility to meet the expectations of the shareholders, the Board reviews significant business policy and corporate calendar. In this regard, it is determined that the Board meeting will be held at least once every two months. Extra Meeting can be called if there is any major unplanned event that needs the Board’s consideration. The Board can also authorize the committees to scrutinize or approve the management’s activities within the delegated authority during the meeting interval. The Board also instructed management to provide monthly performance report so that the Board can follow up the business progress despite not having the Board meeting. To facilitate the directors, EGCO plans the meeting dates and the agenda for the whole year in advance. The Chairman and President fix the agenda for the Board’s meeting. Each director can propose the agenda to the Chairman and can deliver their independent judgment. The Corporate Secretary delivers the notice, agenda, and meeting document to the directors for consideration at least one week in advance. Agenda is prioritized in terms of significance i.e., Matter Arising, Matter for Consideration, Matter for Information to ensure that items that need the most careful deliberation are given adequate time. The Chairman allocates adequate time for Management to present their issues and to permit directors to conduct extensive discussion of agenda items and other topics of interest. The minutes of meeting are drafted for the Board’s review within 14 days after the meeting prior to the adoption at the next meeting. The Board had called 8 meetings in 2009 comprising 7 scheduled and 1 extra meeting. Each meeting took approximately 2 hours and a half. The average attendance rate is 92.49%. Since EGCO has a number of directors who do not reside in Thailand, EGCO has set the policy to allow those directors to attend the meeting by teleconference so that EGCO and the Board will benefit from their opinion and recommendation. Such attendance is not considered the meeting quorum and those who attend the meeting by teleconference do not have the right to vote. The Board encourages the President to invite top Management being the senior executive vice presidents to attend all the Board’s meeting. Other Managements are invited to join the meeting as deemed necessary to provide additional insights into the items being discussed because of personal involvement in those areas. Managers with future potential are given exposure to the Board to support the consideration of the succession planning. The Board can request for additional necessary information from the President or the Corporate Secretary or other assigned management within the extent of the established policy. The Board can also engaged independent advisor for the benefits of the business on EGCO’s expenses. Details of directors’ attendance in 2009 are illustrated in Table 1. The Board set up a policy for non executive directors to call a meeting at least once a year. There are three meetings in 2009. The agenda items cover board of directors’ meetings, risk management, structure, roles and responsibilities of directors and management, good corporate governance, President’s performance appraisal and human resource management. E. Board Self Assessment The Board regularly conducts self assessment for future improvement. In 2009, the Board agreed to use the 2008 self appraisal form based on the forms recommended by the New Zealand Institute of Directors and the forms adopted by other peer companies in the energy sector. There are two parts, the collective appraisal form and the individual appraisal form. The grading code is “excellent” for the score of 85 and above, “very good” for the score of 75 and above, good for the score of 65 and above, “fair” for the score of 50 and above and “poor” for the score below 50. The result of the appraisal is concluded as follows. Collective Self appraisal


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The collective self appraisal form comprised 14 sections, namely (1) shareholders, (2) stakeholders, (3) the Company, (4) legal/ethical duties, (5) monitoring performance and agenda setting, (6) size, composition and independence of the Board, (7) director orientation and development, (8) Board leadership and teamwork, (9) the President, (10) Board (and Committee) meetings, (11) individual Board member contributions, (12) director and Board evaluation and compensation, (13) management evaluation, compensation and ownership and (14) succession Planning. The result can be concluded that the Board protected the benefits of shareholders, stakeholders and EGCO and that EGCO had good corporate governance. The average score was 85% which was in the excellent level. The highlights were as follows: • EGCO’s objectives reflect shareholders’ expectation and full and accurate reporting on EGCO affair

had been made; • The Board understands who the key stakeholders are and have good relationship with them; • The strategic plan is carried out of sufficient quality and content and is well reflected at operational level

with key performance indicators; • The Board communicates proper ethical and legal responsibilities to its members and ensures ethical

behavior and proper compliance standards throughout the organization. The Board is sufficiently independent of the Management. The Board has leadership and effectively managed the conduct of Board business as a team.

• New directors are provided with adequate information about the Company and the Board. Director receives proper training in corporate governance.

• The job description of the President is clearly defined. The Board works well with the President and other managers to create an open culture that encourages frank discussion. The Board avoids excessive intrusion in the President and/or management’s responsibility.

• The Board and committee meeting are productive. • The Chairman carries out the role satisfactory and encourages director participation in a debate; • The Board regularly evaluates the performance of the President and creates an appropriately designed

management compensation plan; • The Board has a company wide succession plan in place; and • The Board has a working knowledge of competitors in the sector and plays a role in public service. Despite an excellent score, the Board viewed that plan should be made to ensure that the succession planning is perfect. Individual Self Appraisal The individual appraisal form comprised 7 sections, namely strategic thought, good corporate governance, competence, independence, preparedness as a director, personal attributes and awareness of stakeholders. From the individual self appraisals, most of the scores were higher than 90% which could be concluded that the directors had appropriate deliberations and contributions in accordance with the recommended best practices. Audit Committee Self Appraisal Apart from the Board, the Audit Committee also appraises themselves annually. The result of the self appraisal in 2009 indicates that the composition, qualifications and roles and responsibilities of the Audit Committee are still in line with the Audit Committee’s Charter B.E. 2551 and the international best practices. F. Performance Appraisal of President and Top Executives All the non-executive directors will appraise the President performance against the corporate and individual achievement. Indicators include the following:


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• Qualitative indicators being leadership, relationship with the Board, risk management and internal control, human resources management, good corporate governance and Code of Conduct.

• Corporate achievements based on the committed Key Performance Indicators • Capabilities to enhance business development The Nomination and Remuneration Committee is responsible for endorsing the performance appraisal of the senior executive vice presidents and executive vice presidents based on the individual achievement of each executive. G. Remuneration for Directors and Management EGCO set the directors’ remuneration at the appropriate rate which is comparable to that of the leading companies in the same sector. The remuneration comprises monthly retainer fee, meeting allowance and bonus which is paid once a year and is tied with EGCO’s achievement. The Nomination and Remuneration Committee shall recommend the remuneration framework to be endorsed by the Board before proposing to the shareholders. EGCO has a policy to disclose the remuneration of each director for transparency. Directors that also serve as committee members will be entitled to extra remuneration to match the increase in responsibilities. Management who serve as directors and committee members shall refrain from taking director remuneration. The non-executive directors shall set the remuneration of the President taking into account the performance appraisal and the peer payment. The Board also approves the pay structure of the Company. EGCO periodically conducts the survey of the executive remuneration to ensure that the rate is comparable to that of the peer companies and adequate to attract and motivate the qualified executives. The remuneration of directors and management is disclosed under the topic of shareholding and management structure in this annual report. H. Board and Management Training The Board pays attention to continuous development of directors and management. In 2009, The following development plan was implemented to ensure efficiency and effectiveness. Director Development Continued development is encouraged for all directors: New Directors: Directors’ orientation is arranged where directors will have a chance to meeting with Management. Directors’ manual is updated to equip incoming directors with knowledge about EGCO. Directors are also encouraged to attend training programs at the Institute of Thai Directors (“IOD”). Existing Directors: The Board encourages continued development covering in-house training and outside training at the IOD or other relating academic institutes. In 2009, EGCO’s in-house training programs for directors were risk management and fraud risk management, and new accounting principles and the Company’s governance. The seminar on an overview of industry, business characteristics of the Group companies, current and future plans were also provided to the Board. EGCO also arranged a Board visit to Rayong Power Plant, Khanom Power Plant, BLCP Power Plant, Nam Theun 2 Power Plant in Laos PDR and site visits to wind farm and gas fired power plant in Australia to educate our directors on power business and future trend. Management Development and Succession Plan EGCO supports the executive development program to enhance Management capacities and skills to be suitable to perform their duties and to assign the suitable and challenging job.


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The Board determines policies and principles for selection of the President and his successor in the event of an emergency or the retirement of the President taking into account educational background, experience, capabilities, ethics and leadership. The selection process is fair and transparent. The Nomination and Remuneration Committee shall consider and propose the qualified candidates to the Board. The President is entrusted to select the knowledgeable, competent and experienced executives in accordance with the qualifications endorsed by the Nomination and Remuneration Committee. The approval of the candidates shall be as stated in the Company’s Regulation on Human Resource Management B.E. 2550 and the resolution of the Board as follows. The Nomination and Remuneration Committee shall approve the appointment of Senior Executive

Vice President, Executive Vice President, and nominate senior executives of subsidiary/joint venture companies that EGCO has the right to nominate for a position equivalent to EGCO’s EVP level and upward.

The President shall appoint the division and section managers. The appointment of Corporate Secretary shall be by the Board while the appointment of Division

Manager of Internal Audit shall be endorsed by the Audit Committee. The Nomination and Remuneration Committee has assigned the Management to prepare the succession plan for 17 key positions along with the executive development plan to ensure that qualified employees would be selected under the D-R-I-V-E people attributes as follows: Dynamic Full of energy and committed to take action proactively while striving for

creating opportunities continuously to move EGCO Group forward. Relationship Committed to work cooperatively with diverse team across EGCO Group

and other stakeholders and sustain integrity and clean environment with caring and harmonizing to achieve synergized superior goal.

Initiatives Committed to challenge existing ways of doing things and thing outside the box in light of better business results

Vision Focus Committed to strive for accomplishment of EGCO Group vision through decision making, planning and communication in accordance with business strategies, objectives and goals.

Excellence Committed to dedicate ourselves to keep abreast of best practices in professionalism and apply our in-depth of expertise based on calculated cost – benefits optimization to provide reliable deliverables with fully met customers and stakeholders’ delight.

The Management development plan is prepared to focus on development of core, managerial/leadership competencies and functional competencies. Key courses and numbers of trainees for each course are as shown below: Courses No. of participants Executive Leadership Program (ELP-NIDA Wharton) 8 Director Certification Program 14 Senior Management Training by Capital Market Academy 4 Senior Management training for globalization 1 The Board is committed to safeguard the benefits of the Company and the shareholders. The Board of Directors consists of knowledgeable, capable, and experienced professionals from diverse related fields,


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thereby enabling EGCO to perform efficiently. This is evidenced as EGCO Board is honored as the Board of the Year for Distinctive Practices for year 2008-2009 and the Board of the Year for Consistent Practices. 9.7.6 Good Governance: Continuous Improvement The Good Corporate Governance report as detailed above reflects the commitment and devotion of the Board to create value to EGCO through management, good corporate governance and corporate social responsibility. EGCO has provided information to relevant parties for the benefit of enhancing the good corporate governance in Thailand such as the project to survey the director remuneration, the hearing on qualifications of independent directors and connected transactions. EGCO will continue to study and adopt the appropriate best practices to enhance EGCO’s and shareholders’ value and to maintain the reputation of Thai industrial sector.

No. Name Meeting (time) Board Meeting

8 times/year Audit

Committee 15

times/year

Executive Committee

12 times/year

Nomination and

Remuneration Committee 9 times/year

Corporate Social Responsibility

Committee 1 time/year

1 Mr. Pornchai Rujiprapa Chairman

8/8 11/12

2 Mr. Aswin Kongsiri Vice Chairman Independent Director

6/8 8/9

3 Mr. Chaipat Sahasakul Independent Director

7/8 15/15

4 Mr. Thanapich Mulapruek Independent Director

6/8 14/15

5 Mr. Somphot Kanchanaporn Independent Director

8/8 15/15

6 Mrs. Wattanee Phanachet 1 Independent Director

2/2 6/6

7 Police Lieutenant General Pijarn Jittirat2

5/6

8 Mr. Phaiboon Siripanoosatien Independent Director

8/8 9/9

9 Mr. Somboon Arayaskul Director

7/8 9/9

10 Mr. Wisudhi Srisuphan Director

8/8

11 Mr. Apichart Dilogsopon Director

8/8 12/12

12 Mr. Peter Albert Littlewood Director

7/8

13 Mr. Hideaki Tomiko Director

8/8 12/12

14 Mr. Mark Takahashi3 Director

3/4 5/6 5/5

15 Mr. Hideo Kuramochi4 4/4


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No. Name Meeting (time) Board Meeting

8 times/year Audit

Committee 15

times/year

Executive Committee

12 times/year

Nomination and

Remuneration Committee 9 times/year

Corporate Social Responsibility

Committee 1 time/year

Director

16 Mr. Shinji Tsuchiya5 Director

4/4

17 Mr. Mark Jobling6 Director

4/4 6/6 4/4

18 Mr. Vinit Tangnoi Director and President

8/8 12/12 2/2

1 Retired by rotation in Shareholders’ Annual General Meeting no. 1/2009 on April 24 2 Being appointed director in Shareholders’ Annual General Meeting no. 1/2009 on April 24 3 Resigned on June 22, 2009 4 Resigned on June 22, 2009 5 Being appointed director on June 22, 2009

6 Being appointed director on June 22, 2009

Note: 4 members in Audit Committee comprising no. 3, 4, 5, 6 5 members in Executive Committee comprising no. 1,9,13,14,17

7 members in Nomination and Remuneration Committee comprising no. 2,8,10,14

4 members in Corporate Social Responsibility Committee comprising 2 members no.18


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

Directors

Courses

Chairman 2000

Directors’ Certification

Program

The Role of

Chairman Program

Audit Committee

Program

Raising the Awareness

of Corporate Fraud in Thailand

Accounting for non-

accounting Audit

Committee

Finance for Non-Finance

Directors

Director Accreditation

Program (DAP)

The Role of the Compensation

Committee Program

IFRS Risk It all

1. Mr. Pornchai Rujiprapa Chairman

√ √

2. Mr. Aswin Kongsiri Vice Chairman Independent Director

√ √ √ √

3. Mr. Chaipat Sahasakul ndependent Director

√ √ √ √

4. Mr. Thanapich Mulapruek Independent Director √ √

5. Mr. Somphot Kanchanaporn Independent Director √ √ √ √

6. Mr. Phaiboon Siripanoosatien Independent Director

√ √

7. Police Lieutenant General Pijarn Jittirat Independent Director

√

√

8.Mr. Somboon Arayaskul Director

√ √ √

9. Mr. Wisudhi Srisuphan Director √ √ √

10.Mr.Apichart Dilogsopon Director √ √

11. Mr. Peter Albert Littlewood Director √

12. Mr. Hideaki Tomiko Director

√


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Directors

Courses

Chairman 2000

Directors’ Certification

Program

The Role of

Chairman Program

Audit Committee

Program

Raising the Awareness

of Corporate Fraud in Thailand

Accounting for non-

accounting Audit

Committee

Finance for Non-Finance

Directors

Director Accreditation

Program (DAP)

The Role of the Compensation

Committee Program

IFRS Risk It all

13. Mr. Shinji Tsuchiya Director

√

14. Mr. Mark Jobling Director

√

15. Mr. Vinit Tangnoi Director and President

√ √ √

Part 2 Section 10 Internal Control

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10 Controlling System and Internal Audit The Board of Directors is responsible for ascertaining that EGCO and its subsidiaries have in place an efficient internal control system which is in line with the guidelines of The Stock Exchange of Thailand’s (SET) and the internal control framework of The Committee of Sponsoring Organizations of the Treadway Commission (COSO). In this respect, the Board has entrusted the Audit Committee the responsibility to review the appropriateness and effectiveness of the internal control system and the internal audit. EGCO’s internal control covers management control, operational control, financial control, and compliance control.

The Board set out the duties and responsibilities of the Internal Audit division in the Internal Audit Charter which was reviewed by the Audit Committee and approved by the Board. The Internal Audit division independently discharges its duties and functionally reports to the Audit Committee. The administrative tasks of the Internal Audit division are reported to the President. The internal audit scopes of EGCO and its subsidiaries are financial audit, operational audit, compliance audit, information system audit, and management audit.

EGCO has had in place the internal controls which is consistent with the guidelines of SET and COSO. Our control framework and how we operate are described as follows: Control Environment - The Board carefully sets up clear and measurable business objectives and policies to be a guideline

for the management and employees. The operation is periodically reviewed to ensure conformity with the business objectives taking into account the fair treatment to stakeholders for long – term benefit of EGCO.

- The organization structure including approval authority has been adjusted to support operation efficiency.

- The written Code of Conduct is reviewed periodically. The Management will give the written Code of Conduct to employees and advise them to understand their responsibilities to uphold the Code of Conduct which includes the measure to avoid the conflict of interest. . Failure to observe the Code of Conduct may result in a range of disciplinary actions

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

Risk Management The details of Risk Management of EGCO and subsidiaries are disclosed under section “ Risk Factors”.

Control Activities To ensure efficient control of operation including accounting and finance, the following activities are implemented. - Transactions and approval amount of management are set forth in the Table of Authority. - Duty to approve the transaction, operation or accounting record is segregated from the duty to,

safeguard assets. - The Asset Management division is responsible for regularly monitoring the operation results of

EGCO’s subsidiaries and joint ventures. - Process to approve and monitor connected transactions is set out clearly. Such transactions must be

approved by those who have no conflict of interests and will be carried out in a way that will provide the utmost benefits to EGCO.


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- The Corporate Secretary is entrusted to ensure that EGCO and the Board’s practices are in compliance with the Securities and Exchange Acts, the notification and regulation of the SET, Securities and Exchange Commission (SEC), and other related laws and regulations.

- The compliance database is developed for reference and tracking. The Legal division is responsible for updating the compliance database and providing recommendations to employees.

- The Internal Audit Division is responsible for regularly reviewing adequacy and appropriateness of internal control system.

Information and Communication EGCO has established information system and communication channels as follows: - For internal communication, all employees will receive information about the company’s policies,

regulations and instructions via intranet and different level of meetings. Employees are encouraged to give comments on the improvement of operations efficiency in the meetings.

- For external communication, EGCO’s information is disclosed via the SET’s Community Portal system and EGCO’s web site at www.egco.com as well as the quarterly analyst meeting, EGCO newsletters, and press conference.

- The meetings among the Audit Committee, external auditors and concerned Management are held to review the financial accounting complying with the General Accepted Accounting Principles and International Accounting Standards.

- Management information are recorded and maintained in a complete, correct, timely and adequate manner to support the decision making. Information such as power plant operation data along with information on accounting, budgeting and finance are recorded and maintained in the Management Reporting System. This reporting system is regularly updated and secured against unauthorized use.

- Accounting records and supporting documents which will be used to support the financial statements preparation are kept completely and in orderly manner. There is no deficiency in those documents informed by the auditor.

- The Board of Directors receives invitation letters, meeting agendas and supporting documents in advance of the meeting. Discussion, remarks and recommendations of the Board and standing committees including resolutions are recorded in the minutes of meetings for future reference or auditing.

- Communication channel is provided for employees to report suspected violations of EGCO’s Code of Conduct to the Management or to the Board of Directors (whistleblower). The message providers are well protected by the company.

Monitoring To ensure that the established internal control system is sufficient and appropriate, the following activities are implemented. - The responsible unit is assigned to follow up, monitor and set appraisal criteria to benchmark the

corporate performance against the plan. Gap analysis is carried out and scheduled reports are submitted to the Management and the Board.

- The Internal Audit division is entrusted to review the internal control system to ensure that the company’s practices are in compliance with the established internal control system, the Securities and Exchange Acts and other related laws and regulations. The Internal Audit division prepares audit result reports to be submitted to the Audit Committee. Such report includes recommendations to improve the internal control efficiency together with the Management’s actions responding to such recommendations.

- External auditors are independent. They regularly report their findings to the Audit Committee. - EGCO and its subsidiaries’ internal controls have been evaluated annually. The evaluation form

has been designed following SEC’s and SET’s internal control guidelines as well as COSO’s internal control framework. The evaluation results have been reported to the Audit Committee and


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the Board of Directors by the Internal Audit division. The 2009 evaluation results can be concluded that the internal control of EGCO and its subsidiaries are sufficient and appropriate.

- To ensure the compliance with rules, regulations and Code of Conduct, employees from Senior Vice President and upwards of EGCO and its subsidiaries are required to thoroughly review their 2009 work practices before signing the Code of Conduct Compliance Statement and the General Representation Letter to his/her managers up to the President. EGCO’s President and the Managing Directors of EGCO’s subsidiaries also signed the Code of Conduct Compliance Statement and the General Representation Letter addressed to the Chairman of the Board of each company.

- In reviewing the financial statements, the auditor has also reviewed internal control on accounting and finance to define the audit approach, work duration and scope of work. In 2009, no significant finding, regarding the improvement on internal control systems, has been found.

- EGCO recognizes the importance of risk management. The Board of Directors has focused on the likelihood of the irregularities, risk mitigation and early warning systems. The Board entrusts the Audit Committee to review with the Management the risk management policy and the practice compliance with such policy. The management set up the Risk Management Committee comprising EGCO’s top executives and the Managing Directors of EGCO’s subsidiaries as members and EGCO’s President as the chairman.

The Audit Committee reviews the internal control system and risk management regularly and reports the result to the Board of Directors. As a consequence, the Board agrees with the Audit Committee that the internal control system of EGCO and its subsidiaries is appropriate and that it sufficiently safeguards EGCO’s assets from misuse or unauthorized use. The Audit Committee and the Board have not received significant deficiency report on the internal control system from external auditors and Internal Audit division. In addition, the 2009 Audit Committee’s Report is attached to this Report in attachment 3

Part 2 Section 11 Connected Transactions

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11. Related Transactions

In conducting the normal business courses, there are related transactions between EGCO or its subsidiaries and persons who may have potential conflict of interest. EGCO endeavors to ensure that these transactions are justified and in compliance with the Stock Exchange of Thailand (“SET”) and the Capital Market Supervisory Board’s rules and regulations. Apart from designating the authorized persons to approve the transaction in accordance with the Table of Authority, the Audit Committee is entrusted to review the related transactions that need to be approved by the Board of Directors. The details of the related transactions are disclosed under item xx and xx of the Notes to 2009 Financial Statements for the period ended December 31, 2009. Procedure to Approve the Related Transactions EGCO lives by the following policies and guidelines in treating and approving the related transactions. o In case of entering into any contracts or any related transactions between EGCO,

subsidiaries, joint venture companies, associated companies and/or outside parties, EGCO will consider the necessity and justification of such transactions for the best interest of the Company. Transaction prices are charged at fair market price like the transactions with other outside parties (Arm’s Length Basis). If there is no such price, EGCO will apply the price of similar market transactions. EGCO may also compare the price with the one recommended by independent appraiser to ensure that such price is reasonable to maximize the Company’s benefits.

o Related transactions that are considered connected transactions in accordance with the SET’s regulation will be treated in accordance with the requirements of the SET’s and Securities & Exchange Commission (“SEC”) and must be reviewed by the Audit Committee in case such transaction must be approved by the Board of Directors.

o Financial assistance or guarantee provided to Group companies or connected persons will be conducted prudently to ensure the utmost benefits of the Group companies. Fee will be charged using the market rate as at the transaction date.

o The summary of transactions with commercial term that an ordinary person will agree to deal with the counterparty under similar circumstances, on the basis of commercial negotiation and without any dependent interest resulted from the status of the director, executive or related person, as the case may be, shall be reported to the Audit Committee on the quarterly basis. This is aimed to ensure that such transaction is well grounded and provide optimal benefit to the Company and in line with the approved process.

o In a case that a shareholders’ approval is needed, the major shareholder who is the connected person can attend the meeting in order to constitute a quorum but will not have a voting right. Since the voting will be based on the number of shareholders who are eligible for voting, this criterion does not have the negative impact on the quorum or the voting.

o Directors with potential conflict of interest will not be allowed to vote or attend the meeting Related Transactions in 2009 EGCO’s related transactions in 2009 were normal business transactions with no objective to siphon profits between EGCO or its subsidiaries and parties with potential conflict of interest. Each transaction was duly approved under the transparent process and the persons with potential conflict of interests were not involved in the decision making. Such transactions were well justified that they were carried out for the best interest of the Company like the transactions


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with the third parties. The system to follow up and review the transactions was also in place to ensure that they are carried out in line with the established process. Details of related transactions in 2009 are as summarized below. 1. Related Transactions with Electricity Generating Authority of Thailand In carrying out the EGCO Group’s business, there were related transactions relating to the power sale and maintenance services between the Group companies and the Electricity Generating Authority of Thailand (“EGAT”), a major shareholder which owns 25.41 stake in EGCO and has 4 representative directors on EGCO Board. However, all the transactions followed the established process and in line with the disclosure and other requirements of the SET and SEC. 1.1 Power Sold to EGAT EGCO and four subsidiaries being Rayong Electricity Generating Company Limited (“REGCO”), Khanom Electricity Generating Company Limited (“KEGCO”), EGCO Cogeneration Company Limited (“EGCO Cogen”) and Roi-Et Green Company Limited (“Roi Et Green”) entered into the Power Purchase Agreement (“PPA”) with EGAT. The PPA terms for the first and second power plants are twenty years and fifteen years while the terms for the third and the fourth power plants are twenty one years each. (It should be noted that REGCO had transferred its entire business to EGCO on October 1, 2009) Such transactions are justified as power generation is EGCO Group’s core business and EGAT is the single wholesale buyer. In addition, the pricing and conditions of those transactions are in accordance with the standard contracts which have been endorsed by relevant government agencies.

Companies Relationship Transaction value for the period ended December 31, 2009 (million baht)Sale Revenue Traded Receivable

EGCO 928.65 664.60REGCO Subsidiaries 2,793.44 -KEGCO 2,317.81 368.00EGCO Cogen 1,164.29 202.92Roi Et Green 298.94 53.25 The value of the related transactions between joint venture companies with EGAT are as shown in the following table. Since EGCO has recorded the share of profit from joint venture companies using equity method, the value of such transactions is not shown on the consolidated financial statements.

Companies Relationship Transaction value for the period ended December 31, 2009 (million baht)

Sale Revenue Traded ReceivablesGEC(including subsidiaries) Joint Venture 14,225.65 2,188.38BLCP 9,870.79 969.55


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1.2 Maintenance Service to EGAT

EGCO Engineering and Services Co., Ltd. (“ESCO”), EGCO’s subsidiary which is an O&M service provider, has entered into a Maintenance Agreements with EGAT to provide major maintenance work including other administrative and relating services to the power plants.

Such transaction is justified as the price is charged on a “cost plus basis” with the annual CPI escalation which is the same standard as the price charged to the third parties. The agreement is effective for a period of eight years commencing September 24, 2007.

Companies Relationship Transaction value for the period ended December 31, 2008

(million baht) Maintenance Fee Traded Receivables

ESCO Subsidiary 49.45 12.18

1.3 Maintenance Service by EGAT

EGCO Group companies have entered into the operation and maintenance agreements with EGAT which are defined as the transactions to support normal business of which the general trading terms and conditions are applied and the agreed price can be calculated from the assets or the referenced price in accordance with SET’s guidelines.

• EGCO, REGCO and KEGCO has entered into the Major Maintenance Agreement (“MMA”) with EGAT for the latter to provide major maintenance services, repair services, administrative services, and additional services to their power plants. The service fees are charged on a “cost plus basis” with the annual CPI escalation. The contracts have been extended for another 8 years for REGCO with the execution date on December 7, 2006 and 6 years for KEGCO with the execution date on June 19, 2002.

• ESCO enters into the long term agreement with EGAT with the term starting from January 2005-December 2020. However, EGAT started providing the service under the agreement on May 23, 2007. The service fees are charged on a “cost plus basis” with the annual escalation of 3%.


(million baht) O&M Fee Account Payables

EGCO 52.65 22.09 REGCO Subsidiary 71.04 - KEGCO 21.27 7.60 ESCO 9.14 0.80

• GEC has engaged EGAT as advisor for maintenance work. The fee is charged in accordance with the agreed price.


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Companies Relationship Transaction value for the period ended December 31, 2008 (million baht)

Maintenance Advisory Fee

Account Payables

GEC Joint Venture 15.53 0.78 2. Related Transactions with CLP Holdings Limited CLP Holdings Limited indirectly holds 12.74% in EGCO through its group of companies as follow: • CLP Holdings Limited holds 50% stake in ONEENERGY THAILAND LTD

(“OneEnergy”) while OneEnergy holds 22.42% stake in EGCO. OneEnergy has four representative directors in EGCO Board of Directors.

• CLP Holdings Limited holds 100% stake in CLP SEA Energy Limited while CLP SEA Energy Limited holds 1.53% stake in EGCO with no representative director.

In 2009, EGCO purchased 50% of the ordinary shares of Power Generation Services Company Limited (“PGS”) from CLP Power (Southeast Asia) Operation Limited (“CLP-SEA”). PGS is the company providing operation and maintenance services to BLCP power plant according to Operations & Maintenance Agreement (“the O&M Agreement”). Based on the O&M Agreement, PGS is entitled to service revenues for the BLCP power plant operation for a period of 25 years under the PPA between BLCP and EGAT which ends 31 January 2032. BLCP is equally held by EGCO and Banpu Public Company Limited (“BANPU”). CLP-SEA, a connected party of EGCO, holds 60% stake in PGS while, on the other hand, it does not directly hold stake in BLCP. Such shareholding structure may lead to the potential conflict of interests. EGCO, therefore, entered into this connected transaction to prevent such potential conflict of interests. EGCO appointed KTB Advisory Co., Ltd. (“KTBA”), a company which is on the list of SEC’s qualified financial advisors, to be the Independent Financial Advisor for this transaction. The opinion of the Independent Financial Advisor could be summarized that the total value of transaction price of 554,843,750 baht was deemed appropriate. Considering such transaction, the Audit Committee and the Board of Directors shared the same view that this connected transaction was transparent, fair, and beneficial to the Company. Such connected transaction helped prevent the potential conflict of interests, and created value to BLCP administration. EGCO would also receive higher return on investment through BLCP after conducting an entire business transfer and dissolve PGS. The Board of Directors, therefore, resolved to approve this connected transaction. CLP Holdings Limited’s representative directors who had conflict of interests being Mr. Peter Littlewood, Mr. Mark Jobling, Mr. Hideaki Tomiku and Mr. Shinji Tsuchiya did not attend the Board of Directors’ meeting and had no voting rights. The connected transaction size of 1.14% of EGCO’s net tangible assets as of 30 September 2009 was considered significant. As such, the Company was required to seek approval from the Board of Directors and disclose information to the SET. EGCO then disclosed the information to the SET on December 17, 2009.


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3. Related Transaction between EGCO and Subsidiaries

EGCO has entered into three agreements with subsidiaries and joint venture companies, which EGCO is a major shareholder and EGCO executives sit on their boards.

1. Agreements to provide office space and building services for 6 companies being REGCO, KEGCO, ESCO, EGCO Cogen, Roi Et Greenj and EGCOM Tara. The space and service scope was specified in the contract with a one-year term.

Such transaction was considered justified as it helped maximize the building space usage and the fee was charged at the market rate which was the same rate charged to the third party.

2. Agreements to provide management services to the above companies of which the scope covers internal audit, legal counseling, Board’s secretarial work, technology, public and community relations and financial work (exclude ESCO and EGCOM Tara) and agreements to dispatch employees to NTPC and BLCP.

Such transactions are well grounded because those Group companies do not have internal staff to take care of such work while EGCO has the capability to provide the services. The management service fee is charged in accordance with the actual operating hours based on the cost plus basis.


(million baht)

REGCO Subsidiaries 19.65 KEGCO 24.64 ESCO 10.26 EGCO Cogen 7.93 EGCO Green 0.83

Roi Et Green 7.30 EGCOM Tara 2.50 EGCO BVI 0.54 Total for subsidiaries 73.65NTPC Joint

Ventures

9.19BLCP 12.00Total for joint ventures 21.19

4. Financial Support

EGCO provides financial support to subsidiaries and joint ventures in accordance with its ownership in such respective companies. Such supports are normal business practices and are aimed at optimizing shareholders’ return. They are duly approved by the Board in accordance with the Table of Authority and disclosed in the notes to financial statements as at December 31, 2009.


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4.1 Inter-company Loan

ESCO On 22 November 2006, EGCO entered into an agreement to provide loan to ESCO in the amount of 780 million baht. Principal payment of 45,882,350 baht each is scheduled annually commencing December 2009 to December 2025. The interest rate is set in accordance with the market rate for long term loan at MLR minus a certain margin and payable on a semi-annual basis. The outstanding loan amount as at December 31, 2009 was 734.12 million baht NED On 25 September 2009, EGCO entered into an agreement to provide loan to NED in the amount of 32 million baht with the bullet payment within 1 year after the loan drawdown. Such loan was provided in accordance with EGCO’s ownership in such companies and on the same conditions as the other two shareholders in those companies being CLP Thailand Renewables Limited (“CLP”) and Diamond Generating Asia, Limited (“DGM”). The interest rate is set in accordance with the market rate for short term loan which is a fixed rate. The outstanding loan amount as at December 31, 2009 was 32 million baht

4.2 Guarantee

EGCO provided the loan guarantee under the Sponsor Support Agreement to subsidiary, joint venture and associated companies. Significant information is as follows.

4.2.1 Contingent Liabilities

EGCO Cogen As of December 31, 2009, EGCO Cogen’s sponsors had a commitment to provide the loan to EGCO Cogen if it has any financial liquidity problem and cannot service debt and expenditures in accordance with the conditions in the contract in the amount not exceeding 200 million baht. Since EGCO holds an 80% stake in EGCO Cogen, its guarantee portion was not exceeding 160 million baht. This agreement is justified as it is the condition in the loan agreement and the financial support is provided on a pro-rata basis in accordance with the ownership in the company. Roi-Et Green EGCO had a commitment to provide the loan guarantee in the amount not exceeding the total outstanding loan and interest payment. As at December 31, 2009, the total commitment amounted to 676.31 million yen equivalent to 247.27 million baht.

This agreement is justified as it is the condition in the loan agreement and the project development condition.

4.2.2 Letter of Guarantee

EGCO has the commitment to the banks under the Counter Guarantee and Standby Letter of Credit (“SBLC”) issued on behalf of EGCO for the subsidiaries and joint ventures. Details of the transaction are as shown below.


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KEGCO EGCO requested HSBC to issue the SBLC to guarantee the release of cash in the KEGCO’s US dollar and baht Debt Service Reserve Accounts. As at December 31, 2009, the value of the SBLC was 476.62 million baht. This transaction was justified as it enables EGCO to release the cash trapped in KEGCO reseve. NTPC The Nam Theun II project’s finance was structured in a way that would allow sponsors who invested in Lao PDR to inject equity on a back-end basis while lenders would allow loan drawn down during the first phase. As such, lenders requested the banks on behalf of the sponsors to issue the SBLC to guarantee future capital injection. The face value of the SBLC will reduce in accordance with each capital injection. With respect to the above, EGCO requested Mizuho Corporate Bank to issue SBLC under the Shareholders’ Support Agreement. As at December 31, 2009, the guarantee value was US 25 million dollar (equivalent to 837.92 million baht). Such transaction is well grounded as EGCO has to comply with loan conditions and the guarantee is made on a pro-rata basis in accordance with the ownership in NTPC. QPL EGCO requested HSBC to issue the SBLC for the purpose of providing a guarantee for the reserve for principle and interest payment of Quezon project. As at December 31, 2009, the guarantee value was US 9.48 million dollar (equivalent to 317.81 million baht). With respect to this, EGCO purchased a bill of exchange (“B/E”) with the face value of 450 million baht and pledged that B/E in favor of HSBC as SBLC security until its expiring date. Such transaction is justified as EGCO has to comply with loan conditions and the guarantee is made on a pro rata basis in accordance with the ownership in QPL. Guidelines for Treating Future Related Transactions Most of the existing related transactions will continue in the future. EGCO will seek to ensure that all of the related transactions are transparent, fair and beneficial to the Company. The Board will entrust the Audit Committee, the auditor or independent consultants to review and recommend the appropriate pricing and the justification of those transactions. In addition, material information about such transactions which includes types, value and the reasons for entering into those transactions will be disclosed to the shareholders in accordance with the regulations of the SET and SEC. EGCO will also provide the updated information, rules and regulation with regard to the related transaction to relevant parties to foster understanding which will lead to full compliance, transparency and the benefit of the shareholders.

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12. Financial Position and Operational Performance

Financial statements

1. Auditor’s report The Management prepares the consolidated and company’s financial statements for the year ended December 31, 2009 in compliance with the Generally Accepted Accounting Principles under the Accounting Profession Act B.E. 2547, appropriate accounting policies and consistencies with adequate disclosure of significant information in the notes of the financial statements.

The Board of Directors has also issued the Company’s regulation on accounting, finance and budgeting B.E. 2550 to which the Management must adhere. In addition, the Audit Committee has been entrusted to ensure that the Company’s financial statements have been prepared in a justified and prudent manner in compliance with such rules and regulations. The appropriate accounting policies were consistently applied. Also, the Audit Committee has reviewed the Company’s internal control systems to ensure its adequacy and effectiveness as a means to safeguard the company’s assets from unauthorized persons and reveal the weakness to prevent unlawful conduct and abnormalities.

The Management has prepared both consolidated and Company financial statements for the year ended 31 December 2009 in compliance with the Thai Generally Accepted Accounting Principles under the Accounting Profession Act B.E. 2547. The appropriate accounting policies were consistently applied and the financial statements were prepared in a prudent and justified manner with adequate disclosure of significant information in the notes of the financial statements.

The Board of Directors is of the opinion that both the consolidated and company financial statements for the year 2009, present the company’s financial position, operating results, changes in shareholders’ equity and cash flows in a correct and reliable manner and that such statements are in compliance with the Generally Accepted Accounting Principles and all governing rules and regulations.

126

2. Summary of Financial Statements Balance Sheets (Please see details in the Annual Report)

127

Balance Sheets (Con’t)

128

Consolidated Balance Sheet (Please see details in the Annual Report)

129

Consolidated Balance Sheet (Con’t)

130

Profit and Loss (Please see details in the Annual Report)

131

Consolidated Profit and Loss (Please see details in the Annual Report)

132

Change in Equity (Please see details in the Annual Report)

133

Consolidated Change in Equity (Please see details in the Annual Report)

134

Cash Flow (Please see details in the Annual Report)

135

Consolidated Cash Flow (Please see details in the Annual Report)

136

12.2 Explanation and analysis of financial position and oeprational performance 12.2.1 Management Discussion and Analysis

1. Executive Summary The Electricity Generating Public Company Limited (EGCO) is structured as a holding

company which invests in subsidiaries and interests in joint ventures. In 2008, the sale of shares in Amata-EGCO Power Ltd. (AEP), Amata Power (Bangpakong) Ltd. (APBP) and Amata Power-ESCO Service Co., Ltd. (AMESCO) as well as the purchase of shares in Quezon Power (Philippines) Limited Co. (Quezon) were made. In 2009, EGCO’s significant events are summarized as follows:

i. The additional purchase of 2.60% stake in Quezon, which owns, operates and maintain a 502.50 MW (installed capacity) coal-fired power plant, was made in March 2009.

ii. The investment in Natural Energy Development Co., Ltd. (NED), with the total stake of 33.33%, was made in July 2009. NED is the renewable energy developing company which is currently studying solar and wind power projects in Thailand.

iii. The acquisition of entire business of Rayong Electricity Generating Co., Ltd. (REGCO) occurred in October 2009. This created two periods of operating results : 1) January–September 2009 operating results was included in REGCO’s financial statements. 2) October–December 2009 operating results was included in EGCO’s financial statements. Both periods of the operating results were included in the consolidated financial statements, which hereinafter referred to Rayong power plant.

iv. The purchase of the ordinary shares of Power Generation Services Co., Ltd. (PGS), which provides operation and maintenance services to BLCP Power Limited (BLCP), with the total stake of 50% was made in December 2009.

EGCO businesses can be categorized into four investment groups as follows: 1. Independent Power Producer (IPP) consists of Rayong power plant, Khanom

Electricity Generating Co., Ltd. (KEGCO), BLCP Power Limited (BLCP) and Gulf Power Generation Co., Ltd (GPG), which is a subsidiary of Gulf Electric Public Company Limited (GEC).

2. Small Power Producer (SPP) consists of EGCO Cogeneration Co., Ltd. (EGCO Cogen) and Roi-Et Green Co., Ltd. (Roi-Et Green) and four subsidiaries of GEC, which are Gulf Cogeneration Co., Ltd. (GCC), Nong Khae Cogeneration Co. Ltd., (NKCC), Samutprakarn Cogeneration Co., Ltd. (SCC) and Gulf Yala Green Co., Ltd. (GYG).

3. Overseas consists of Conal Holdings Corporation (Conal), Nam Theun 2 Power Co., Ltd. (NTPC) and Quezon.

4. Other Business consists of EGCO Engineering & Service Co., Ltd. (ESCO), Egcom Tara Co., Ltd. (ET) and NED.

EGCO, Subsidiaries and Interests in Joint Ventures entities, hereinafter collectively referred

to as EGCO Group1, owns 13 operating plants, totaling 3,980.70 equity MW at present, an increase of 13.10 MW compared to the total equity MW at the end of 2008. This was caused by the additional purchase of 2.60% stake in Quezon (leading to a total stake of 26%).

EGCO Group’s consolidated net profit for 2009 ended December 31, 2009 was Baht 7,936 million, an increase of Baht 1,009 million or 15% compared to last year. Excluding the gain on foreign exchange rate, which was mostly a translation transaction to be shown in accordance with

1 Subsidiaries: REGCO, KEGCO, EGCO Cogen, Roi-Et Green, ESCO and ET Interests in joint ventures: BLCP, GPG, GCC, NKCC, SCC, GYG, Conal, NTPC, Quezon and NED

137

the Thai Accounting Standard, EGCO Group’s profit was Baht 7,505 million, an increase of Baht 14 million or 0.19%. This is mainly due to the higher share of profit from Quezon’s operating result and the increase of GPG’s electricity sales as well as the increase in other income of NTPC. Meanwhile, electricity sales of Rayong power plant, KEGCO and BLCP decreased.

2. Business Expansion Analysis EGCO Group is the first IPP in Thailand established on May 12, 1992, structured as a

holding company with a number of subsidiaries and joint ventures. Our vision is “To be the leading Thai integrated electric power company with comprehensive energy services in Thailand and in the ASEAN region, with full commitment to environment protection and social development support”.

Our core business is to produce and supply electricity to Electricity Generating Authority of Thailand (EGAT) under long-term power purchase agreements (PPAs). EGCO focuses its investment on pursuing opportunities in power generation in Thailand and also seeks to expand its business in ASEAN countries with the aim to provide optimum returns to shareholders by improving the profitability of our existing assets and acquiring new projects with acceptable risk and reasonable return profile.

As of December 31, 2009, Thailand’s total installed capacity was reported at 29,212 MW1. During the year 2009, the peak demand reached 22,045 MW2 on April 24, 2009, which was 2.32% lower than the peak demand in April 2008.

Due to the economic crisis during the year 2009, the demand for electricity dropped continuously, especially during the beginning of the year. The Energy Policy and Planning Office (EPPO) has to adjust the Power Development Plan (PDP) in order to reflect the current situation and it is expected to be completed by January 2010 and to implement in April 2010. The new PDP will be an improvement of PDP 2007 (2nd revision). After the new PDP is completed, EPPO will organize a public hearing before submitting to the National Energy Policy Council.

Currently, the four new IPPs with the total capacity of 4,200 MW are having the problem of construction delay caused by the requirement of conducting the Health Impact Assessment (HIA) to comply with the constitution. Such delay would not impact the national power supply over a short term as the power consumption growth in the year 2010 is projected at 4% while the reserve margin is higher than 20%.

To maintain EGCO Group’s market share and strength in the energy sector, EGCO’s business strategy will place more emphasis on expanding investment opportunities in the ASEAN market, fuel-related projects, and prospective domestic projects using renewable energy.

As of December 31, 2009, EGCO Group has 13 operating plants with capacity totaling 3,980.70 equity MW, of which 3,599.60 equity MW is dispatched to EGAT under long-term PPAs representing 12.32% of Thailand’s total installed capacity, 29,212 MW.

EGCO also invests in Nam Theun 2 project which is currently under construction and set to commence Commercial Operation in early 2010, postponed from the previous COD targeted in mid December 2009. This project represents an additional 271.70 equity MW in EGCO’s portfolio. The project is a 1,086.80 MW (installed capacity) hydroelectric power plant located in the Lao PDR. EGCO holds a 25% ownership in the project company; NTPC. EGAT is contracted to take off 995 MW and the remaining MW will be sold to the Lao PDR. At the end of December 2009, the overall project progress was 99.87% complete.

The company has a policy to dividend 40% of the consolidated net profit after taxation, or to increase the dividend amount in a steady manner, to the shareholders. This dividend policy may change in the light of investment opportunities that may become available to the company or

1 Source: EGAT

138

Remarks: - Profits before FX separate out foreign exchange impact from EGCO, subsidiaries and joint ventures.- IPP : Rayong power plant, KEGCO, BLCP, GPG - SPP : EGCO Cogen, Roi-Et Green, GCC, NKCC, SCC, GYG, APBP, AEP

- Overseas : Conal, NTPC, Quezon - Others : ESCO, ET, NED and AMESCO - APBP, AEP and AMESCO were sold in May 2008; Quezon and NED was acquired in November 2008 and July 2009, respectively.

SPP6%

Overseas9% Others

2%

IPP83%

as a result of other economic or financial factors or when a dividend payment may have a significant impact on the normal operation of the company. The dividend declaration shall not exceed the retained earnings of the company financial statements.

3. Report and Analysis of the Operating Results This report contains the analysis of the financial statements of EGCO, subsidiaries and

interests in joint ventures as follows:

3.1 Operational Results

Unit : Million Baht

EGCO Group’s profit before the effect of foreign exchange rate for 2009 ended December 31, 2009 was Baht 7,505 million, representing an increase of Baht 14 million or 0.19% compared to last year. This is mainly due to the higher share of profit from Quezon’s operating result and the increase of GPG’s electricity sales due to the Kaeng Khoi 2 (KK2) unit 2 which achieved its Commercial Operating Date (COD) on February 27, 2008, as well as the increase in other income of NTPC from the liquidated damages charged to the head contractor due to the project delay. Meanwhile, electricity sales of Rayong power plant, KEGCO and BLCP decreased due to lower in the capacity rate.

If including the gain on foreign exchange rate from Baht appreciation of Baht 430 million, EGCO Group’s profit for 2009 was Baht 7,936 million, an increase of Baht 1,009 million or 15%, while in 2008 it recorded a foreign exchange loss of Baht 564 million. This creates a difference caused by foreign exchange rate of Baht 994 million. The gain (loss) on foreign exchange rate is mostly a translation transaction to be shown in accordance with the Thai Accounting Standard. It incurs from the difference of the translation of the net debt denominated in foreign currency into the Thai Baht equivalent using the foreign exchange rate at the end of this accounting period (December 31, 2009) and the previous period (December 31, 2008). The gain on foreign exchange rate of 2009 in the amount of Baht 430 million can be explained as follows:

i. The gain on foreign exchange rate of EGCO and subsidiaries of Baht 33 million, an increase of Baht 58 million compared to the previous year which recorded the loss from foreign exchange rate of Baht 25 million.

1 Profit before FX shown in the table is different from profit before FX calculated from the consolidated financial statements because the consolidated financial statements show currency exchange gains (losses) of EGCO and Subsidiaries, but not those of joint ventures. The share of profit (loss) from interests in joint ventures is a figure net of currency exchange gains (losses).

2009 2008 Before FX After FX Before

FX After FX

EGCO (550) (550) (598) (565)IPP 6,680 7,169 7,195 6,707SPP 516 634 599 452Overseas 693 523 21 57Other Business 166 160 274 275 Total 7,5051 7,936 7,4911 6,927

Profit before FX – 2009

139

ii. The gain on foreign exchange rate of joint ventures of Baht 398 million, an increase of Baht 936 million compared to the previous year which showed the loss from foreign exchange rate of Baht 539 million.

Gain (Loss) on FX from Joint Ventures: Unit : Million Baht 2009 2008

BLCP 296 (231)GPG 197 (287)GCC, NKCC, SCC and GYG 75 (61)APBP and AEP * - 6

Conal 0.38 53NTPC (180) (8)Quezon 9 (10)

Total Gain (Loss) from FX 398 (539)

* APBP and AEP were sold in May 2008

The earnings before finance costs, tax, depreciation and amortization (EBITDA) for 2009 was Baht 15,864 million, representing an increase of Baht 432 million or 3% as compared to 2008, in which the EBITDA was Baht 15,432 million.

The gross profit of EGCO and subsidiaries was reported at Baht 3,734 million, down by Baht 714 million or 16%, as a result of lower contracted electricity sales of KEGCO and Rayong power plant. The same reason caused the operating profit of EGCO and subsidiaries to fall to Baht 2,965 million, a decrease of Baht 770 million or 21%.

Important Profitability Ratios for 2009 operating results were as follows:

- Gross Profit Ratio was 40.83% - Operating Profit Ratio was 32.42% - Net Profit Ratio was 50.33% - Net Profit Ratio (excluding the effect of foreign exchange of EGCO and subsidiaries)

was 50.12% - Earnings per share (EPS) was Baht 15.07 - Earnings (excluding the effect of foreign exchange of EGCO and subsidiaries) per share

(EPS) was Baht 15.01 - Return on Equity (ROE) was 16.60%

The gross profit margin (excluding the share of profit from joint ventures) of 40.83% was lower than the previous year’s margin of 43.10% due to lower electricity sales of KEGCO and Rayong power plant; whereas the net profit ratio (excluding the effect of foreign exchange of EGCO and subsidiaries) was reported at 50.12%, higher than 2008 ratio of 45.39% mainly due to an increase in the share of profit from GPG and the recognition of the share of profit from Quezon.

3.2 Income, Expense and Share of Profits from Joint Ventures Analysis

The 2009 operating results, excluding FX of EGCO Group and profit attributable to minorities (MI), are as follows:

- Total revenues were Baht 9,495 million, a decrease of Baht 1,218 million or 11%. - Total expenses were Baht 7,751 million, a decrease of Baht 542 million or 7%. - The share of profits from joint ventures before FX was Baht 5,876 million, an increase

of Baht 718 million or 14%. The details according to their groups of business are as follows:

Total Revenues, Total Expenses and Share of Profits (Losses) from JVEs before FX: Unit : Million Baht

140

EGCO IPP SPP Overseas Others Total

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Total Revenues 242 249 6,124 7,195 2,237 2,234 - - 891 1,034 9,495 10,712

Total Expenses 792 847 4,312 4,767 1,972 1,961 - - 674 717 7,751 8,293Profits bf Share of Profits (Losses) from JVEs

(550) (598) 1,812 2,428 265 273 - - 217 317 1,744 2,419

Share of Profits (Losses) from JVEs bf FX - - 4,869 4,767 325 365 693 21 (11) 4 5,876 5,157

Net Profit bf FX and MI (550) (598) 6,681 7,195 590 638 693 21 206 321 7,620 7,576

1) EGCO’s total revenues for 2009, amounting to Baht 242 million decreased by Baht 7 million or 3% mostly from a decrease of interest income by Baht 44 million due to lower interest rate. Meanwhile, dividend income from Eastern Water Resources Development and Management Public Company Limited (EASTW) increased by Baht 31 million.

Total expenses of EGCO were Baht 792 million, a decrease of Baht 56 million or 7%. This resulted mainly from a decrease in administrative expenses amounting to Baht 128 million due to lower development expenses and advertising expenses, meanwhile, finance costs increased by Baht 52 million from the interest on the disbursement of revolving loan of Baht 3,500 million in November 2008 and of long-term loan totaling Baht 4,000 million in September 2009.

2) IPP’s total revenues were Baht 6,124 million, a decrease of Baht 1,071 million or 15%. The total expenses were Baht 4,312 million, down by Baht 455 million or 10%. The share of profits from joint ventures before FX was reported at Baht 4,869 million, an increase by Baht 101 million or 2%. The details are as follows:

Total Revenues, Total Expenses and Share of Profits (Losses) from JVEs before FX of IPP: Unit : Million Baht

Rayong power plant

KEGCO BLCP GPG Total

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 %Chg

Total revenues 3,787 3,952 2,337 3,243

- - - - 6,124 7,195 (15%)

Total expenses 2,406 2,448 1,906 2,319

- - - - 4,312 4,767 (10%)

Profits bf Share of Profits (Losses) from JVEs

1,380 1,504 431 924 - - - - 1,812 2,428 (25%)

Share of Profits (Losses) from JVEs bf FX

- - - - 2,930 3,200 1,939 1,567 4,869 4,767 2%

Net Profit bf FX and MI 1,380 1,504 431 924 2,930 3,200 1,939 1,567 6,681 7,195 (7%)

• Sales of electricity of IPP were Baht 6,040 million, representing a decrease of Baht 1,065 million or 15%. The decrease was a result of KEGCO’s lower electricity sales by Baht 893 million to register Baht 2,318 million, caused by a decrease in the Base Availability Credit for KEGCO. Moreover, Rayong power plant’s electricity sales decreased by Baht 172 million to register Baht 3,722 million from a decrease in the Capacity Rate. These changes were in accordance with the capacity payment formula calculated on a "Cost Plus Basis" under the PPAs and in line with the company's projection.

141

Sales of Electricity – IPP:

2009 2008 %Changes

Rayong power plant 3,722 3,894 (4%)KEGCO 2,318 3,211 (28%) Total Sales of Electricity – IPP 6,040 7,105 (15%)

The PPAs cover the full amount of the projected fixed costs, debt financing charges and major maintenance charges, which are used in calculating the electricity tariff for each period. Moreover, the calculation of the capacity payment is adjusted to include compensation for the exchange rate effect from debt services and expenses of major maintenance parts denominated in US Dollar. Rayong power plant and KEGCO receive the compensation monthly for each billing period. They receive higher capacity charge than that stated in the original PPAs before the inclusion of foreign exchange indexation if the exchange rate is above Baht 28 per US Dollar and vice versa.

For 2009, Rayong power plant and KEGCO received compensation for the exchange rate effect of Baht 214 million.

• Interest income and others amounted to Baht 84 million, a decrease of Baht 6 million or 7%, mainly from a decrease of KEGCO’s interest income by Baht 21 million due to lower deposit amount and interest rate. Meanwhile, other income of Rayong power plant increased by Baht 13 million due to an environmental management fee.

• Cost of sales totaled Baht 3,052 million, a decrease of Baht 382 million or 11% from a decrease of KEGCO’s cost of sales totaling Baht 238 million due to lower major maintenance expenses and heavy oil cost caused by EGAT’s dispatch order and Rayong power plant’s cost of sales totaling Baht 145 million due to lower major maintenance expenses.

Cost of Sales – IPP:

2009 2008 %Changes

Rayong power plant 1,690 1,835 (8%)KEGCO 1,361 1,599 (15%) Total Cost of Sales – IPP 3,052 3,434 (11%)

• Administrative expenses and income taxes were Baht 1,032 million, an increase of Baht 41 million or 4%, mainly from the increase of provision for devaluation inventory of Rayong power plant by Baht 133 million. Meanwhile, Rayong power plant’s tax payment decreased by Baht 50 million due to lower revenues. The corporate tax reduction BOI privilege for Rayong power plant ended on April 19, 2008. Moreover, tax payment at KEGCO decreased by Baht 67 million due to lower revenues. KEGCO’s 50% corporate tax reduction BOI privilege on profits from power generation already ended on September 25, 2009.

• Finance costs were Baht 229 million, a decrease of Baht 114 million or 33%, resulting from KEGCO’s lower principal amounts of debentures and KEGCO’s completion of overseas loan repayment in June 2008.

• Share of profits from joint ventures before FX, BLCP and GPG, was recognised in the amount of Baht 4,869 million, an increase by Baht 101 million or 2% that resulted from an increase of GPG’s electricity sales due to the Kaeng Khoi 2 (KK2) unit 2 achieved its Commercial Operating Date (COD) on February 27, 2008. Meanwhile, BLCP’s electricity sales decreased due to lower in the Base Availability Credit.

Unit : Million Baht

Unit : Million Baht

142

3) SPP’s total revenues were reported at Baht 2,237 million, an increase of Baht 3 million or 0.14%. The total expenses were Baht 1,972 million, an increase of Baht 11 million or 1%. The share of profits from joint ventures before FX was reported at Baht 325 million, down by Baht 40 million or 11%. The details are as follows:

Total Revenues, Total Expenses and Share of Profits (Losses) from JVEs before FX of SPP: Unit : Million Baht EGCO

Cogen Roi-Et Green

GCC, NKCC,

SCC, GYG

APBP and AEP*

Total

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 % Chg

Total revenues 1,933 1,947 305 287 - - - - 2,237 2,234 0.14%

Total expenses 1,814 1,804 158 157 - - - - 1,972 1,961 1%

Profits bf Share of Profits (Losses) from JVEs

119 143 147 130 - - - - 265 273 (3%)

Share of Profits (Losses) from JVEs bf FX - - - - 325 324 - 41 325 365 (11%)

Net Profit bf FX and MI 119 143 147 130 325 324 - 41 590 638 (8%)

* APBP and AEP were sold in May 2008

• Sales of electricity of SPP were Baht 2,226 million, representing an increase of Baht 11 million or 0.49%, mainly from Roi-Et Green’s electricity sales that increased by Baht 18 million due to higher Energy Charge from higher fuel oil price, which was in accordance with the tariff formula. Meanwhile, EGCO Cogen’s electricity sales decreased by Baht 7 million due to lower steam sales.

Sales of Electricity – SPP:

2009 2008 %Changes

EGCO Cogen 1,927 1,935 (0.40%)Roi-Et Green 299 281 7% Total Sales of Electricity – SPP 2,226 2,216 0.49%

• Interest income and others amounted to Baht 11 million, a decrease of Baht 8 million or 42%, mainly from the lower interest income of EGCO Cogen.

• Cost of Sales of SPP was reported at Baht 1,847 million, an increase of Baht 11 million or 1%. This was substantially driven by an increase in cost of sales of EGCO Cogen in the amount of Baht 7 million as a result of major maintenance expenses. Cost of Sales – SPP :

2009 2008 %Changes

EGCO Cogen 1,705 1,698 0.40%Roi-Et Green 142 138 3% Total Cost of Sales – SPP 1,847 1,836 1%

• Administrative expenses and income taxes were Baht 39 million, up by Baht 1 million or 2%.

• Finance costs were Baht 86 million, a decrease of Baht 1 million or 1%. • Share of profits from joint ventures before FX, GCC, NKCC, SCC and GYG, totaled

Baht 325 million, a decrease of Baht 40 million or 11% from the disposal of APBP and AEP in May 2008.

Unit : Million Baht

Unit : Million Baht

143

4) Overseas’ share of profits from joint ventures before FX, Conal, NTPC and Quezon, was reported at Baht 693 million, an increase of Baht 672 million mainly from the recognition of Quezon’s share of profit from acquiring 23.40% in December 2008 and 2.60% in March 2009, and an increase of NTPC’s other income from the liquidated damages charged to the head contractor due to the project delay.

5) Other Business’ total revenues were Baht 891 million, a decrease of Baht 142 million or 14%; and total expenses were Baht 674 million, a decrease of Baht 43 million or 6%. Share of losses from the joint ventures before FX were Baht 11 million when compared to the previous

Total Revenues, Total Expenses and Share of Profits (Losses) from JVEs before FX of Other Business:

Unit : Million Baht ESCO * ET NED Total

2009 2008 2009 2008 2009 2008 2009 2008 % Chg

Total revenues 621 796 270 238 - - 891 1,034 (14%)

Total expenses 545 641 129 76 - - 674 717 (6%)

Profits bf Share of Profits (Losses) from JVEs 76 155 141 162 - - 217 317 (32%)

Share of Profits (Losses) from JVEs bf FX - 4 - - (11) - (11) 4 N.A.

Net Profit bf FX and MI 76 159 141 162 (11) - 206 321 (36%)

* AMESCO was sold in May 2008

• Service income from ESCO amounted to Baht 611 million, down by Baht 158 million or 21%, resulting mostly from lower maintenance service income and spare parts sale to overseas power plants.

• Sales of water from ET, were Baht 267 million, up by Baht 38 million, or 17%, thanks to the increase of the tariff and minimum take under the long-term Water Purchase Agreement with Provincial Waterworks Authority.

• Interest income and others amounted to Baht 13 million, down by Baht 22 million or 64% due to a gain on the sale of AMESCO totaling Baht 15 million in 2008.

• Cost of services was Baht 435 million, a decrease of Baht 96 million or 18% which was in accordance with the decrease in service income.

• Cost of water sales of ET was Baht 77 million, an increase of Baht 6 million or 9%. • Administrative expenses and income taxes totaled Baht 162 million, an increase of

Baht 47 million or 40% as a result of ESCO’s fine from defaulting on rice husk power plant construction amounted to Baht 37 million as well as from higher tax payment of ET in the amount of Baht 46 million due to the end of corporate tax reduction on February 2009. Meanwhile, ESCO’s corporate tax decreased by Baht 38 million from lower revenues.

• Share of losses from joint ventures before FX totaled Baht 11 million from the acquisition of NED, natural energy developing in Thailand, in July 2009. Compared to the previous year, a share of profit of ESCO was Baht 4 million from AMESCO, which was sold in May 2008.

Part 2 Section 12 Financial Position and Operational Performance

Page 142

4. Report and Analysis of Financial Position 4.1 Asset Analysis

As at December 31, 2009, total assets of EGCO, its subsidiaries and interests in joint ventures amounted to Baht 62,920 million, an increase of Baht 4,590 million or 8% from December 31, 2008. The important details are as follows:

62,920

7,923

947

28,529

15,06810,452

1,1666,032

58,330

24,494

17,041

9,596

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Total Assets Cash,ST & LT

Investment

ST & LT

Investment as

Collateral

Inv. in Subs.

&Interests in JVEs

Property, Plant

and Equip (net)

Others

2009 2008

1) Cash and deposits at financial institutions, and short-term and long-term marketable securities were Baht 7,923 million or 13% of the total assets, up Baht 1,891 million or 31%. This resulted mainly from EGCO’s drawn down of a long-term loan amounting to Baht 4,000 million, dividends from joint ventures totaling Baht 3,563 million, dividend of Baht 109 million received from EASTW, higher market price of EASTW by Baht 511 million and net cash receipts from operating activities of Baht 4,165 million. Meanwhile, dividend payment to shareholders amounted to Baht 2,708 million, an investment in joint ventures was Baht 2,549 million, a short-term investment in financial institutions was Baht 556 million and principal repayment and interest payment totaled Baht 5,088 million.

2) Short-term and long-term investments used as collateral were Baht 947 million or 2% of the total assets, down Baht 219 million or 19%. This increase mainly came from the principal repayment and interest payment of KEGCO.

3) Investment in subsidiaries and interests in joint ventures recorded under the equity method in the consolidated financial statements as at December 31, 2009 amounted to Baht 28,529 million or 45% of the total assets, up Baht 4,035 million or 16%. The major change can be defined as follows:

3.1) An increase in share of profit from investment according to the equity method amounting to Baht 6,323 million.

3.2) An increase in share capital of a joint venture, Quezon and PGS, totaling Baht 1,038 million.

3.3) The transfer of net liabilities to interests in joint ventures, NTPC, totaling Baht 1,361 million.

3.4) Dividends received from BLCP, GEC, Conal and Quezon by Baht 4,428 million.

Unit : Million Baht


Page 143

3.5) Loss from the translation of foreign currencies to Thai Baht on the net investment in foreign joint ventures, Conal and Quezon, totaling Baht 259 million.

For the company financial statements, the original cost was applied for recording the investment in subsidiaries and interests in joint ventures at the beginning; the book value as at December 31, 2009 was Baht 32,219 million, down Baht 2,105 million, mainly due to transferring REGCO to EGCO.

4) Property, plant and equipment (net) totaled Baht 15,068 million or 24% of the total assets. They were down Baht 1,973 million or 12% due to the decrease in property, plant and equipment from the depreciation of EGCO and subsidiaries’ assets totaling Baht 2,214 million and the reclassification of unutilised capital spare parts from property, plant and equipment to spare parts and supplies at Rayong power plant, EGCO Cogen and KEGCO totaling Baht 216 million. Meanwhile, there was a recording of capital spare parts as property, plant and equipment following the major maintenance at Rayong power plant, EGCO Cogen and KEGCO in the amount of Baht 273 million and net purchase of property, plant and equipment totaled Baht 184 million.

5) Other assets were Baht 10,452 million or 17% of the total assets, up Baht 856 million or 9% mainly from higher dividends receivable from joint ventures by Baht 865 million.

4.2 Liability Analysis

As at December 31, 2009, the EGCO Group's total liabilities were Baht 11,826 million, which was Baht 962 million or 8% lower than the amount as at December 31, 2008. The total liabilities consist of the following:

1) Short-term loans of Baht 3,500 million were repaid in October 2009.

2) Long-term loans and debentures totaled Baht 10,716 million, or 91% of total liabilities, up Baht 2,946 million or 38%. This mainly came from EGCO’s drawn down of a long-term loan amounting to Baht 4,000 million. Meanwhile, KEGCO, EGCO Cogen and Roi-Et Green repaid the principal of debentures and long-term loans. The details are as follows:

- USD loans in the amount of USD 16 million - Yen loans in the amount of Yen 671 million - Baht loans in the amount of Baht 8,555 million - Baht debentures in the amount of Baht 1,410 million

Maturity of long-term loans and debentures as of December 31, 2009 Unit : Million Baht

EGCO KEGCO EGCO Cogen

Roi-Et Green

Within 1 Year - 914 168 761- 5 Years 4,000 497 894 150> 5 Years 4,000 - - 57Total 8,000 1,410 1,062 243

USD

5%JPY

2%

THB

80%

THB

Debenture

13%


Page 144

Long-term loans and debentures are secured liabilities over land, buildings, power plants and equipments of subsidiaries. The subsidiaries have to maintain cash reserves as at December 31, 2009 totaling Baht 223 million for the purpose of payment of principal and interest due within one year.

3) Other liabilities amounted to Baht 1,110 million or 9% of total liabilities, representing a decrease of Baht 408 million or 27% which mostly resulted from the decrease in Rayong power plant, KEGCO and ESCO’s income tax payable.

4.3 Shareholders' Equity Analysis

As at December 31, 2009, Shareholders' Equity amounted to Baht 51,093 million, which was Baht 5,551 million or 12% higher than the amount as at December 31, 2008. This was mainly from 3 factors as follows:

1. The net profit in the consolidated financial statements amounted to Baht 7,936 million, while appropriated dividend totaled Baht 2,619 million made the increasing of retained earnings by Baht 5,317 million.

2. The market price of available-for-sale investment in EASTW increased by Baht 511 million.

3. Loss from the translation of foreign currencies to Thai Baht on the net investment in foreign joint ventures, Conal, NTPC and Quezon, totaling Baht 322 million.

The analysis of the company's capital structure as at December 31, 2009 can be summarized as follows:

Shareholders' equity was Baht 51,093 million or 81.20%.

Liabilities were Baht 11,826 million or 18.80%.

Important financial ratios were as follows:

- Debt to equity ratio was 0.23 times, lower than 0.28 times at the end of 2008.

- Book value per share was Baht 96.06, higher than Baht 85.60 at the end of 2008.

5. Report and Analysis of Cash Flow Position Cash Flow Statement shows the change in cash flows from operating activities, investing activities, and financing activities at the end of the accounting period, and indicates the ending balance of the cash and the cash equivalents. As at December 31, 2009, the ending balance of the cash and the cash equivalent was Baht 5,855 million, which was Baht 876 million higher than the amount as at December 31, 2008. The details of the sources and uses of funds are as follows:

-Net cash received from operating activities totaled Baht 4,165 million. This was cash received from operating activities of Baht 5,211 million. Whereas cash payment for corporate income tax was Baht 653 million and cash payment for working capital was Baht 393 million..

-Net cash received from investing activities was Baht 508 million mainly due to dividend received from joint ventures and EASTW amounting to Baht 3,563 million and

Equity

81.20%

Debt

18.80%


Page 145

Baht 109 million, respectively. Meanwhile, an investment in joint ventures was Baht 2,549 million and a short-term investment in financial institutions was Baht 556 million.

-Net cash payment for financing activities was Baht 3,797 million mainly due to the dividend payment to shareholders amounting to Baht 2,708 million and principal repayment and interest payment of EGCO, KEGCO, EGCO Cogen and Roi-Et Green totaling Baht 5,088 million. Meanwhile, EGCO drew down a long-term loan amounting to Baht 4,000 million.

In 2009, the analysis of the company’s liquidity ratios is as follows:

- Current ratio was 8.30 times, compared to 2.58 times in 2008. - Quick ratio was 4.35 times, compared to 1.34 times in 2008.

Both ratios were higher than the ratios in 2008 due to the repayment of short-term loan of EGCO amounting to Baht 3,500 million.

Audit Fee

Audit Fee

In 2009, the Company and its subsidiaries paid the audit fee of Baht 3,470,000 to the Office of the Auditors, comprising the Company’s audit fee of Baht 1,280,000 and subsidiaries’ audit fee of Baht 2,190,000. No audit fee had been paid to the auditors or other related parties to the auditors and the Auditors’ office.

Non-Audit Fee

The following non-audit fee was paid by the Company and its subsidiaries.

1. Payment to the Office of the Auditors:

In 2009, its subsidiaries paid non-audit fee of Baht 46,000 to the Office of the Auditors for the special purpose review. In additional, the Company and its subsidiaries would also be responsible for the expenses of undelivered work of Baht 1,850,000 to the Office of the Auditors for advice service on IFRS.

2. Payment to Other Related Parties of the Auditors’ Office:

In 2009, the Company and its subsidiaries paid non-audit fee of Baht 8,103,822 to other related parties of the Auditors’ office for the special purpose review and advice service on enterprise risk management and there is no outstanding amount for the undelivered work.

The engagements of the office of the Auditors and other related parties of the Auditors’ office to provide the non-audit work were reported to the Audit Committee to be not involved the


Page 146

conflict of interest or the review of their own work which would contaminate the independence judgment of the auditors.

Part 2 Section 13 Others

Page 147

13. Others As at December 31, 2009, there is no information which may significant impact to investors’ decision making.


Page

Part 3

The Certification of Information

We, the Executive Committee or the highest ranking management in Accounting, have thoroughly reviewed all information in this annual registration statement and hereby certify that all information is true, accurate and not misleading nor does it fail to disclose material facts that should be stated therein which may cause damage to the purchasers of securities. In addition, we certified that:

(1) The financial statement and the financial information in this annual registration statement has accurately disclosed the financial status, the performance, and the cash flow of the company and its subsidiaries.

(2) We account for providing the good disclosure system to ensure that the company and its subsidiaries have disclosed the accurate information as well as overseeing the compliance with such system.

(3) We account for providing the good internal control system as well as overseeing the compliance with such system. In addition, we have already disclosed the information on the internal control appraisal to the auditor and the company’s audit committee on January 13, 2553. The information consists the deficiency and significant change of the internal control as well as the incorrect practice that may affect the preparation of the financial statement of the company and its subsidiaries.

To certify that all documents are the same paper as we had certified correctness; we, hereby assigned Ms. Busakorn Kakanumpornwong to affix her signature on every single page of all same certified series. If any page is not signed by Ms. Busakorn Kakanumpornwong, we assume that such information is not certified.

Name Position Signature

1. Mr. Vinit Tangnoi C President ____________________

2. Mrs Pikul Srisastra. Senior Executive Vice President - Finance

____________________


Appointee Ms. Busakorn Kakanumpornwong

Senior Vice President-Corporate Secretary

________________________


Page

The Certification of Information

We have thoroughly reviewed all information in this annual registration statement and hereby certify that all information is true, accurate and not misleading nor does it fail to disclose material facts that should be stated therein.

To certify that all information are the same as I had reviewed and having no inquiries that such information are incomplete, false, and misleading or failing to disclose material facts that should be stated therein; I, hereby assigned Ms. Busakorn Kakanumpornwong to affix her signature on every single page of all same certified series. If any page is not signed by Ms. Busakorn Kakanumpornwong, we assume that such information is not certified.


Mr. Pornchai Rujiprapa Chairman ________________________


Appointee Mrs. Busakorn Kakanumpornwong


________________________


Page

The Certification of Information We have thoroughly reviewed all information in this annual registration statement and hereby certify that all information is true, accurate and not misleading nor does it fail to disclose material facts that should be stated therein.



Mr. Chaipat Sakasakul Director ________________________




________________________


Page




Mr. Aswin Kongsiri Director ________________________




________________________


Page




Mr. Somphot Kanchanaporn Director ________________________




________________________


Page




Mr. Phaiboon Siripanoosatien Director ________________________




________________________


Page




Police Lieutenant General Pijarn Jitttirat

Director ________________________




________________________


Page




Mr. Wisudhi Srisuphan Director ________________________




________________________


Page




Mr. Apichart Dilogsopon Director ________________________




________________________


Page




Mr. Somboon Dilogsopon Director ________________________




________________________


Page




Mr. Hideaki Tomiku Director ________________________




________________________


Page




Mr. Peter Albert Littlewood Director ________________________




________________________


Page




Mr. Shinji Tsuchiya Director ________________________




________________________


Page




Mr.Mark Jobling Director ________________________




________________________


Page




Mr. Vinit Tangnoi President ________________________




________________________

The positions of EGCO’s Board of Directors as of December 31, 2009

Name and Position Age Education Dispute Family Relationship

between the management

Amount of Shares (%)

Working Experience

Year Position Company

1. Mr. Pornchai Rujiprapa ♦ Chairman ♦ Chairman, Executive

Committee

57 - Ph.D. (Regional Economics.), University of Pennsylvania, USA

- M.Sc. (Regional Economics.), from University of Pennsylvania, USA

- M.P.A. (Programming Planning Administration) from National Institute of Development Administration (NIDA)

- B.Sc. (Agro-Industry) from Kasetsart University

- Certificate of Executive Program, Class 7, Capital Market Academy

- Certificate of Directors Accreditation Program, Thai Institute of Directors Association

- National Defense Course (Class of 41), National Defense College

- - 0.000 October 2006-Present 2006-Present December 2006-2008 2005 - 2009 2003-2006 1999-2003

Chairman Permanent Secretary, Ministry of Energy Director Chairman Deputy Permanent Secretary, Ministry of Energy Deputy Secretary –General, The National Economic and Social Development Board (NESBD)

Electricity Generating Authority of Thailand Ministry of Energy PTT Public Company Limited PTT Chemical Public Company Limited Ministry of Energy Office of the Prime Ministry

2. Mr. Aswin Kongsiri • Independent Director • Vice Chairman of the Board of

Directors • Nomination and Remuneration

Committee Member

64 - Bachelor’s Degree ( Honours) in Philosophy, Politics and Economics, Oxford University, England

- Banff School of Advanced Management, Alberta, Canada

- National Defense College, The National Defense Course for the

- - 0.000 January 2009-Present October 2007-Present 2005 – Present

2005 – Present

Director and Member of Audit Committee Chairman Director and Chairman of Risk Management Committee Director, Executive Director and Chairman of Risk Management

Thoresen Thai Agencies Public Company Limited Ch. Karnchang Public Company Limited Bangkok Aviation Fuel Services Public Company Limited Krung Thai Bank Public Co., Ltd.

Joint State-Private Sectors, Class 6 - Certificate of Chairman 2000

Program, Thai Institute of Directors Association

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

1999 – Present

1993 – Present

2003 – November 20081992 – March 2006 1981 - Present

Committee Director and Chairman of Audit Committee Director, Audit Committee Member And Nomination Committee Member Director and Audit Committee Member Director Director, Audit Committee Member and Nomination and Remuneration Committee Member

The OHTL Public Company Limited (Mandarin Oriental Hotel) Thai Reinsurance Public Company Limited Thai Rating and Information Services Company Limited Muang Thai Life Assurance Company Limited Padaeng Industry Public Company Limited

3. Mr. Chaipat Sahasakul • Independent Director • Chairman, Audit Committee

55 - Ph.D. in Economics, University of Rochester, USA

- M.A. in Economics, Thammasat University

- B.A. in Economics, Thammasat University


- - 0.000 May 2009-Present July 2005-Present 2001 – March 2009 2005 - 2006 1998 – 2001 1991 – 1996 1989 - 1991

Chairman, University Research policy Committee Independent Director, Audit Committee Member Secretary - General Director, Audit Committee Member and Chairman of Risk Management Committee Senior Executive Vice President Senior Vice President and Spokesman Executive Vice President

Bangkok University Pylon Public Company Limited Agricultural Futures Trading Commission Government Housing Bank MFC Asset Management Public Company Limited Stock Exchange of Thailand Morgan Grenfell Thai Co., Ltd.

4. Mr. Thanapich Mulapruk • Independent Director • Audit Committee Member

60 - National Defence College, 1998 (Class 41)

- LL.B., Chulalongkorn University

- - 0.000 February 2009-Present

April 2008-

Director Director

The Airports of Thailand Public Company Limited The Port Authority of Thailand

- Thai Bar Certificate, Thai Barrister at law of Thailand

- LL.M., Chulalongkorn University - Certificate of Directors

Certification Program (class 78) , Thai Institute of Directors Association


Present October 2005-

Present April 2008-

October 2008 October 2007-February 2008

November 2008-Present

October, 2009-Present

December 2006 – September 2009 2006 2004-2006

2003-2004

Director Director Director Spokesperson Director General of Department of Special Litigation Director General of Department of Economic Crime Litigation Director General of Department of Administrative Litigation Deputy Director General of Department of Administrative Litigation Executive Director of Office of Economic Crime Litigation 1

The Transport Company Limited The Bangkok Mass Transit Authority The Marketing Organization for Farmers, Ministry of Agriculture and Cooperatives Office of Attorney-General Office of Attorney -General Office of Attorney-General Office of Attorney-General Office of Attorney-General Office of Attorney-General Office of Attorney-General

5. Mrs. Wattanee Phanachet • Independent Director • Audit Committee Member (Vacating the office by rotation in AGM on April 24, 2009)

72 - M.A. Degree in Accounting, University of Alabama, USA

- Bachelor Degree in Accounting, Chulalongkorn University, Bangkok, Thailand

- Certified Public Accountant (CPA), Thailand License No. 1091


- - 0.000 October 2007-Present 1999 – Present 1999 – Present 1999 – 2006 2006 – 2007

Independent Director and Audit Committee Member Director and Audit Committee Member Independent Director and Audit Committee Member Independent Director and Audit Committee Member Committee on Curriculum Quality Guarantee, Faculty of Commerce and

ESSO (Thailand) Public Company Limited Thai Poly Acrylic Public Company Limited Capital Nomura Securities Delta Electronics (Thailand) Public Company Limited Chulalongkorn University

2005 – 2007

Accountancy Head, Sub-Committee on Certified Public Accountant’s Qualification, appointed by the Federation of Accounting Professions

Federation of Accounting Professions

6. Police Lieutenant General Pijarn Jittirat • Independent Director

61 - Master of Public Administration, Chulalongkorn University

- Bachelor of Public Administration, Police Cadet Academy

- Advanced Course in Administration, Class 29, Institute of Administration Development

- Advanced Course in Police Administration, Class 13

- National Defense College Class 44

- - 0.000 2006-2008 2005-2006

2004-2005

2002-2004

Deputy Inspector-General Commissioner, Office of Legal and Investigation Deputy Commissioner, Office of Human Resources Assistant Commissioner, Office of Human Resources

Royal Thai Police

7. Mr. Somphot Kanchanaporn • Independent Director • Audit Committee Member

63 - MBA, National Institute of Development Administration (NIDA)

- B.S. (Police Science and Administration), California State University at Los Angeles

- Certificate of Directors Accreditation Program (DAP), Thai Institute of Directors Association

- National Defense College, (Class 41st)


- - 0.000 January 2009-Present 2008-Present 2008-April 2009 2007 October 2006-2008 December 2006-2008 November 2003-November

Director Chairman of the Inspector General Committee Independent Director Independent Director Member Chairman of Standing Committee on Energy Deputy Director (Executive Level 10)

B N B Inter Group Public Company Limited Ministry of Energy PTT Aromatics and Refining Public Company Limited Aromatics (Thailand) Public Company Limited The National Legislative Assembly The National Legislative Assembly The National Intelligence Agency

2005 August-November 2003

Deputy Secretary-General

The Office of the National Security Council

8. Mr. Phaiboon Siripanoosatien • Independent Director • Nomination and Remuneration

Committee Member

46 - Master of Political Science, Sukhuthai Thammathirat University

- Bachelor of Engineering, Chulalongkorn University


- Certificate of Public Law and Management, Class 1, King Prajadhipok’s Institute

- Certificate of Democratic Politics and Governance for High-Level Administrators, Class 7, King Prajadhipok Institute

- Certificate of Management of Public Economy, Class 1, King Prajdhipok’s Institute


2009-Present 2009-Present 2008-Present 2008-Present 1998-Present

Director Independent Director Independent Director and Audit Committee Member Independent Director Managing Director

Government Saving Bank Asia Credit Securities Company Limited Finansia Syrus Securities Public Company Limited Metrostar Property Public Company Limited Trinity Plus Company Limited

9. Mr. Wisudhi Srisuphan • Director (Authorized Director)

60 - M.A.A. Business Economics, Thammasart University

- M.E. (C.E.) Lamar University , U.S.A.

- LLB. (Second Class Honour), Ramkhamhaeng University

- B.Eng.in Civil Engineering, Chulalongkorn University

- National Defense Course (Class 38), National Defense College

- Politics and Governance in Democratic Systems for Executive Course (Class 6), King Prajadhipok’s Institute

- CMA (Class 6), Capital Market Academy

- Certificate of Role of Chairman Program, Thai Institute of Directors Association


- - 0.000 December 2009-Present

October 2008-Present

July 2008-Present

October 2006-Present

August 2004-Present 2009

2008-2009 2007-2008

2007

2006-2009 2006-2009

2006-2008

2005-2006 2003-2007

2002-2006

2002-2003 2000-2006 2000-2005 1999-2002

Chairman of the Board Director Duty Chairman Director Chairman of the Board Director-General Deputy Permanent Secretary Director-General Director-General Chairman of the Board Director Chairman of the Board Chairman of the Board Director-General Director Director-General Chairman of the Board Director Comptroller-General

Siam City Bank Public Company Limited The Electricity Generating Authority of Thailand Dhipaya Insurance Public Company Limited Office of the Council of State Real Estate Information Center The Custom Department, Ministry of Finance Ministry of Finance The Custom Department, Ministry of Finance The Excise Department, Ministry of Finance The Government Saving Bank Thai Airways International Public Company Limited Thailand of Tobacco Monopoly, Ministry of Finance CAT Telecom Public Company Limited The Treasury Department, Ministry of Finance PTT Exploration and Production Public Company Limited Fiscal Policy Office, Ministry of Finance The Government Saving Bank PTT Public Company Limited The Comptroller’s Department, Ministry of

Finance

10. Mr. Apichart Dilogsopon • Director • Executive Committee Member (Authorized Director)

60 - Master of Business Administration, Kasetsart University

- Bachelor of Engineering (Civil Engineering), Chulalongkorn University


- - 0.000 October 2009-Present

October 2007-September 2008 October 2006-

December 2007 October 2005-September 2006

October 2004-

September 2005

Deputy Governor to Office of the Governor Deputy Governor-System Control Deputy Governor-Administration and Acting EGAT Spokesman Assistant Chief Executive Officer-Services

Assistant Governor-Demand Side

Management

Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand

11. Mr. Somboon Arayaskul • Director • Nomination and Remuneration

Committee Member • Corporate Social

Responsibility Committee Member

(Authorized Director)

56 - Master of Engineering (Mechanical Engineering), Villanova University, U.S.A. - Bachelor of Engineering (Mechanical Engineering), Mapua Institute of Technology, Philippines


- Certificate of the General Manager Program, Harvard Business School

- - 0.000 December 2007-Present

October 2006-December 2007

April 2008-January 2009

Deputy Governor- Development Vice President - Thermal Power Plant Construction Director

Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand Ratchaburi Electricity Generating Holding Public Company Limited

12. Mr. Peter Albert Littlewood • Director (Authorized Director)

58 MA (1st Class Honours), Cambridge University, UK

- - 0.000 2003 – Present

2001-Present 2000 - 2005

Executive Director and Chief Operating Officer Director Director

CLP Power Asia Limited, Hong Kong BLCP Power Limited Rayong Electricity Generating Co., Ltd.

2000 - 2005 2000 - 2005 1999 – 2003

1998

Director Director Project Manager for CLP’s generating plant projects General Manager for CLP’s generation business group and later for CLP strategic development

Khanom Electricity Generating Co., Ltd. EGCO Engineering & Service Co., Ltd. CLP Group CLP Group

13. Mr. Hideaki Tomiku • Director • Executive Committee Member (Authorized Director)

52 International Law, Tokyo University - - 0.00 May 2009-Present

2006 –Present 2003 – 2006 2001 –2003

Chief Executive Officer Director and Executive Vice President Deputy General Manager, Head of International IPP Assistant General Manager, Power, Generation & Marketing for Japanese Market

Diamond Generating Asia, Limited OneEnergy Limited Mitsubishi Corporation Mitsubishi Corporation

14. Mr. Mark Takahashi • Director • Executive Committee Member • Chairman, Nomination and

Remuneration (Authorized Director) (Vacating the office by resignation on June 22, 2009)

51 - MBA, Wharton School, University of Pennsylvania, USA

- BSc. (civil engineering) from the University of Colorado, USA

- - 0.00 April 2009-Present

October 2006-April 2009 July 2006

December 2003-

July 2006 1995-2003

CLP Group CFO Managing Director Group Director – Corporate Development Director of Group Treasury Regional Finance VP/Corporate Treasurer

CLP Holdings Limited OneEnergy Limited CLP Holdings Limited CLP Holdings Limited Intergen (Hong Kong) Intergen, Boston, USA

15. Mr. Hideo Kuramochi • Director (Authorized Director) (Vacating the office by resignation

47 - B.Sc. (Electronics and Telecommunication), Waseda University, Tokyo

- - 0.00 2008

Deputy General Manager and Head of Southeast Asia IPP, Power Generation and Marketing International Unit, Member of Executive Committee

Mitsubishi Corporation OneEnergy Limited

on June 22, 2009)

2007

2006

2002

Head of Southeast Asia IPP, Power Generation and Marketing International Unit Head of International IPP, Power Generation and Marketing International Unit Power Generation and Marketing International Unit

Mitsubishi Corporation

16. Mr. Mark Jobling • Director • Executive Committee Member • Chairman, Nomination and

Remuneration (Authorized Director)

38 - Bachelor of Economic, Monash University

- Bachelor of Laws (Honours), Monash University

- Barrister and Solicitor (Victoria) - Solicitor (Hong Kong)

- - 0.00 2009-Present 2006-2009

2003-2006

Managing Director-Southeast Asia Senior Vice President –Business Development General Counsel

CLP Holding OneEnergy CLP Power Asia

17. Mr. Shinji Tsuchiya • Director (Authorized Director)

39 - Bachelor of Engineering (Mechanical Engineering), Keio University

- - 0.00 April 2009-Present November 2005 – March 2009

November 2005

Head of Southeast Asia IPP Manager Commercial Director

Power Generation and Marketing Internatinal Unit of Mitsubishi Corporation Power Generation and Marketing Internatinal Unit of Mitsubishi Corporation Electricidad Aguila de Tuxpan (co.) Elctricidad Sol de Tuxpan

18. Mr. Vinit Tangnoi • Director • Executive Committee Member • Chairman, Risk Management

Committee • Chairman, Group Business

Committee • Chairman, Good Corporate

Governance Committee • Chairman, Corporate Social

58 • Master of Science (Industrial Engineering), University of Texas at Arlington, U.S.A.

• B.Eng. (Mechanical), Kasetsart University

• Certificate of Advance Management Program, Harvard Business School, Harvard University, U.SA.

• Certificate of Senior Executive

- - 0.000 August 2009-Present


October , 2008-September 2009 January , 2009-

Chairman Chairman Chairman Director

Natural Energy Development Co., Ltd. Khanom Electricity Generating Company Limited EGCO Engineering and Service Company Limited Rayong Electricity Generating Company Limited Gulf Electric Company Limited

Responsibility Committee


Program, Sasin Graduate Institute of Business Administration of Chulalongkorn University

• Certificate of Army War College Regular Program, Institute of Army Academics

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

• Certificate of Leader Program, Capital Market Academy

Present October , 2008-

Present December

2007- September,2008

2006-2008 March 31, 2006

October 1, 2005

June 24, 2005

October 1, 2004

October 1, 2003

Director Deputy Governor-Generation Director Deputy Governor-System Control Senior Executive Vice President- System Control Assistant Chief Executive Officer-Planning Assistant Governor-Policy and Planning Assistant Governor-Fuel Management

BLCP Power Company Limited Electricity Generating Authority of Thailand EGAT International Co., Ltd. Ratchaburi Electricity Generating Holding Public Company Limited Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand

The positions of the Management and the Control Persons as of December 31, 2009

Name and Position Age Education Dispute

Family Relationship between the management


Working Experience


1. Mr. Vinit Tangnoi - Director - Executive Committee Member - Chairman, Risk Management

Committee - Chairman, Group Business

Committee - Chairman, Good Corporate

Governance Committee - Chairman, Corporate Social

Responsibility Committee


58 • Master of Science (Industrial Engineering), University of Texas at Arlington, U.S.A.

• B.Eng. (Mechanical), Kasetsart University

• Certificate of Advance Management Program, Harvard Business School, Harvard University, U.SA.

• Certificate of Senior Executive Program, Sasin Graduate Institute of Business Administration of Chulalongkorn University

• Certificate of Army War College Regular Program, Institute of Army Academics

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

• Certificate of Leader Program,



October , 2008-September 2009 January , 2009-Present

October , 2008-Present

December 2007- September,

2008 2006-2008

March 31, 2006

October 1, 2005

Chairman Chairman Chairman Director Director Deputy Governor-Generation Director Deputy Governor-System Control Senior Executive Vice President-

Natural Energy Development Co., Ltd. Khanom Electricity Generating Company Limited EGCO Engineering and Service Company Limited Rayong Electricity Generating Company Limited Gulf Electric Company Limited BLCP Power Company Limited Electricity Generating Authority of Thailand EGAT International Co., Ltd. Ratchaburi Electricity Generating Holding Public Company Limited Electricity Generating Authority of Thailand Electricity Generating Authority of




Working Experience


Capital Market Academy

•

June 24, 2005

October 1, 2004

October 1, 2003

System Control Assistant Chief Executive Officer-Planning Assistant Governor-Policy and Planning Assistant Governor-Fuel Management

Thailand Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand Electricity Generating Authority of Thailand

2. Mr. John M. Palumbo

♦ Senior Executive Vice President -Business Development

♦ Risk Management Committee Member

♦ Good Corporate Governance Committee Member

45 - Bachelor of Science in Mechanical Engineering (Honors), Columbia - University, School of Engineering and Applied Science, New York.

- - 0.000 August 2009-Present 2004 – Present

2005-May 2008

2004 – April 2007

30 Jan 07-November 08 2003 – 2004

2003 - 2004

2003

Director Director Director Director Director Independent Consultant to the Managing Director and the Head of the Southeast Asia Business Team Leader & Infrastructure Specialist, Independent Consultant to Chief

Natural Energy Development Company Limited Gulf Electric Public Company Limited

EGCO Joint Ventures & Development Company Limited Nam Theun 2 Power Company Limited

BLCP Power Company Limited China Light & Power Group (Hong Kong) ADB Technical Assistance Program International Power PLC.




Working Experience


1995 – 2003

Executive Officer Principal and Managing Director

Delta Associates (Thailand) Limited

3. Mr. Sakda Sreesangkom

♦ Senior Executive Vice President – Finance


♦ Group Business Committee Member


♦ Corporate Social Responsibility Committee Member

(Vacating the office by resignation on August 24, 2009)

47 - M.A. (Economics), Keio University, Japan

- B.A. (Economics), Thammasat University

- - 0.000 April 2008-August 2009

30 Jan 07-August 2009

2004- Present 2002 – August

17,2009 2002 – August 17, 2009 2002 – August 17, 2009 2002 – August 2009 2002 – April

2007 2005- April 2006 2002 – 2005 2002-April 2007 2002-2003

Director Director Director Director Director Director Director Director Chairman Director Director Director

Nam Theun 2 Power Company Limited BLCP Power Company Limited Gulf Electric Public Company Limited Rayong Electricity Generating Company Limited Khanom Electricity Generating Company Limited EGCO Engineering & Service Company Limited EGCO International (BVI) Limited EGCO Joint Ventures & Development Company Limited

Egcom Tara Company Limited Egcom Tara Company Limited Amata-EGCO Power Company Limited Amata Power (Bangpakong) Company Limited




Working Experience


4. Ms. Pikul Srisastra

♦ Senior Executive Vice President – Finance and Corporate Services


♦ Group Business Committee Member


♦ Corporate Social Responsibility Committee Member

58 - B.Sc. (Accounting), Chulalongkorn University

- Certificate of Senior Executive Program, Sasin Graduate Institute of Business Administration of Chulalongkorn University


- Executive Leadership Program (ELP-NIDA Wharton)


2007-August 2009 2007

2006

2002-2005 2002-2005

2002-2003 2002-2003

2001-2002

2001

Director Executive Vice President –Finance Director Executive Vice President –Controller Executive Vice President –Finance Deputy Managing Director - Finance & Administration Director Director Deputy Managing Director - Finance & Administration Director

Gulf Electric Public Company Limited Khanom Electricity Generating Company Limited EGCO Engineering & Service Company Limited

BLCP Power Company Limited EGCO International (BVI) Limited

Electricity Generating Public Company Limited EGCO Joint Ventures & Development Company Limited Electricity Generating Public Company Limited Rayong Electricity Generating Company Limited Gulf Electric Public Company Limited EGCO Joint Ventures Development Company Limited Khanom Electricity Generating Company Limited Amata-EGCO Power Company Limited




Working Experience


5. Mr. Chumsak Desudjit ♦ Senior Executive Vice President ♦ Director-Rayong Power Plant ♦ Risk Management Committee

Member


55 - B. Eng. (Mechanical Engineering), Chulalongkorn University


- Certificate in Executive Leadership Program, Joint Program NIDA-Wharton, University of Pennsylvania

- Graduate Diploma in Management of Public Economy(MPE-7) , King Prajadhipok’s Institute

- - 0.000 2008 – September 2009

April 09-Present April 09-Present 2007-Present

April 08-June 09

2006 – 2550

2001 -2007

1998 -2000

Director and Managing Director

Chairman Chairman Chairman Director Director Deputy Managing Director Operation Group Operation Division Manager

Rayong Electricity Generating Company Limited

Roi-Et Green Company Limited EGCO Green Energy Company Limited EGCO Cogeneration Company Limited Gulf Cogeneration Company Limited Nongkhae Cogeneration Company Limited Samutprakarn Cogeneration Company Limited EGCO Cogeneration Company Limited Rayong Electricity Generating Company Limited Rayong Electricity Generating Company Limited

6. Mr. Chankij Jearaphunt

♦ Senior Executive Vice President

♦ Managing Director –Khanom Electricity Generating

55 - Master of Public Administration (MPA) National Institute of Development Administration (NIDA) - B. Eng. (Electrical Engineering), Chulalongkorn University

- - 0.000 2004 – Present

April 08-Present

Director and Managing Director

Director


-Gulf Energy Company Limited; -Gulf IPP Company Limited; and -Gulf Power Generation Company Limited




Working Experience


Company Limited ♦ Risk Management Committee

member ♦ Good Corporate Governance

Committee Member ♦ Corporate Social

Responsibility Committee Member

April 07-April 09

2002 - April 08

2006 - April 07

1998 – 2004

Chairman

Director

Director

Deputy Managing Director-Operation,

- Roi-Et Green Company Limited; and - EGCO Green Energy Company Limited

- Gulf Cogeneration Company Limited; - Nongkhae Cogeneration Company Limited; and - Samutprakarn Cogeneration Company Limited

- Roi-Et Green Company Limited; and - EGCO Green Energy Company Limited


7. Mr. Rasda Pongpaew ♦ Senior Executive Vice President ♦ Managing Director- Egco

Engineering and Service Company Limited



59 - B.Sc (Mech.Eng), Prince of Songkla University

- NDT Level 2 : Sperry School for NDT Columbus, Ohio, USA

- NDT Lever 3 : Combustion Engineering Training Centre Connecticut, USA

- MINI MBA : Chulalongkorn University - NIDA – Wharton : Executive Leadership

Program (ELP), Wharton, University of Pennsylvania, USA

- - 0.000 April 2009-Present

2008-Present

2006-Present

1998-2005

1996 – 1998

Director Director Managing Director Deputy Managing Director Project Director Amata

BLCP Power Company Limited Eastern Water Resources Development and Management Public Company Limited Egco Engineering and Service Company Limited Egco Engineering and Service Company Limited Amata-Egco Power Limied




Working Experience


- Director Certification Program : Thai Institute of Directors Association (IOD)

8. Mr. Sakul Pochanart

♦ Executive Vice President - Strategy and Corporate Management



52 - D.Sc. (Civil Engineering), Sever Institute of Technology, Washington University, USA

- Certificate in Management Psychology, Management and Psychology Institute

- Certificate in Executive Leadership Program, Joint Program NIDA-Wharton, University of Pennsylvania

- Director Certificate Program, Thai Institute of Directors

- - 0.00 2008-Present 2006-Present 2006-Present

2008-2009

2548-2009

2006-2007 2004-2006

2004-2006 2004-2005

2004-2005 2001-2004

2000-2005 2000-2005

Director Director Director Acting Executive Vice President-Asset Management Executive Vice President –Project Management Director Executive Director Executive Director Executive Vice President Director and Acting General Manager Senior Vice President – Business Development Director Director

BLCP Power Co., Ltd. Gulf Electric Public Company Limited Nam Theun 2 Power Company Electricity Generating Public Company Limited Electricity Generating Public Company Limited Gulf Power Generation Co; Ltd. Gulf Power Generation Co; Ltd. Gulf Yala Green Co., Ltd. Electricity Generating Public Company Limited Thai LNG Power Corporation Limited Electricity Generating Public Company Limited Alsing Power Holding Inc Northern Mindanao Power Corporation

9. Mrs. Ngamphis Chitphromphan 54 - Master of Business Administration, - - 0.000 2008-Present Deputy Managing Director & Chief BLCP Power Limited




Working Experience


♦ Executive Vice President – Finance

Catholic University of Leuven, Belgium (Governmental Scholarship)

- Master of Science - Accounting, Thammasat University

- Bachelor of Accountancy (Honors), Chulalongkorn University

- Certificate of Senior Executive Program, Sasin Graduate Institute of Business Administration of Chulalongkorn University

2005-2008

1997-2005

2001- Present

Financial Officer ( EGCO’s Representative) Deputy Managing Director - Finance and Administrative Accounting & Finance Division Manager Certified Public Accountant (CPA)

Khanom Electricity Generating Company Limited Khanom Electricity Generating Company Limited

10. Mr. Piya Jetasanon

♦ First Senior Vice President – Finance

52 - MBA, Ramkhamhaeng University - B.A. (Economics), Thammasat

University

- Certificate of Directors Certification Program, Thai Institute of Directors Association - Certificate of TLCP Executive Development Program, Thai Listed Companies Association

- - 0.000 2007 - Present 2007

2005-Present

2003-2005

1996 – 2003 1994 – 1996

Director Director First Senior Vice President – Finance Senior Vice President – Finance Manager – Finance Division Manager- Treasury Management Section

EGCO Cogeneration Company Limited Thai LNG Power Corporation Ltd. Electricity Generating Public Company Limited Electricity Generating Public Company Limited Khanom Electricity Generating Company Limited Electricity Generating Public Company Limited




Working Experience


11. Mr. Suvapan Chomchalerm

♦ Senior Vice President - Accounting and Budget Division

49 - M.Sc. (Accounting), Thammasat University

- B.Sc. (Accounting), Chulalongkorn University

-

- - 0.000 2000 - Present

1994 – 2000

Senior Vice President - Accounting and Budget Division Manager-Accounting and Budget Analysis Section, Accounting and Budget Division

Electricity Generating Public Company Limited

เอกสารแนบ 2 : ขอ้มลูการดํารงตําแหน่งของผูบ้รหิารและผูม้อีํานาจควบคมุ

The Positions of EGCO's Management and the Control Persons in the Subsidiaries and Other Related Companies as of December 31, 2009

EGCO1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

1 Mr. Pornchai Rujiprapa DDD, XX DDD

2 Mr. Aswin Kongsiri DD,I, N

3 Mr. Chaipat Sahasakul I, AA

4 Pol Lt Gen Pijarn Jittirat I

5 Mr. Somphot Kanchanaporn I, A

6 Mr. Phaiboon Siripanoosatien I,N

7 Mr. Thanapich Mulapruk I,A

8 Mr. Wisudhi Srisuphan D D

9 Mr. Somboon Arayaskul D, N Deputy Govenor

10 Mr. Peter Albert Littlewood D D

11 Mr. Mark Jobling D, NN,X

12 Mr. Hideaki Tomiku D, X D,X

13 Mr. Shinji Tsuchiya D

14 Mr. Apichart Dilogsopon D,X

15 Mr. Vinit TangnoiD, President, X, SS, GG

Engineering Level

14 DDD DDD DD DD

16 Mr. John Palumbo SEVP-Business Development&Management, G D D D D D D D D D D D D

17 Mrs. Pikul Srisastra SEVP-Finance & Corporate Services, S, G D D D D D

18 Mr. Chumsak Desudjit SEVP, S, G D DDD D DDD DDD

19 Mr. Chankij Jeraphunt SEVP, S, G D, Managing Director D D D D D

20 Mr. Rasda Pongpaew SEVP, S, G D, Managing Director D D

21 Mrs. Ngamphis Chitphromphan EVP Deputy Managing Director

22 Mr. Piya Jetasanon FSVP-Finance D

23 Mr. Suvapan Chomchalerm SVP-Accounting and Budget

24 Miss Busakorn Kakanumpornwong Company Secretary, SVP-Corporate Secretary

RemarkA. DDD = Chairman DD = Vice Chairman D = Director XX = Chairman of Executive Committee X = Executive Committee Member I = Independent Director AA = Chairman of Audit Committee A = Audit Committee Member NN = Chairman of Nomination and Remuneration Committee N = Nomination and Remuneration Committee Member

SS = Chairman of Group Business Committee S = Group Business Committee Member GG = Chairman of Good Corporate Governance Committee G = Good Corporate Governance Committee Member

B. 1 = Electricity Generating Authority of Thailand 8 = Roi-Et Green Co., Ltd. 16 = Quezon Generating Co., Ltd. 24 = BCLP Power Limited2 = OneEnergy Thailand Limited 9 = Egcom Tara Co., Ltd. 17 = Quezon Power Inc. 25 = Nautral Energy Development Co., Ltd.3 = Khanom Electricity Generating Co., Ltd. 10 = Gulf Electric Public Company Limited 18 = Conal Holdings Corporation 26 = Eastern Water Resources Development and Management Plc.4 = EGCO Cogeneration Co., Ltd. 11 = Gulf Power Generation Co., Ltd. 19 = Northern Mindanao Power Corporation5 = EGCO Engineering and Service Co., Ltd. 12 = Gulf Cogeneration Co., Ltd. 20 = Alsing Power Holdings, Inc.6 = EGCO International (BVI) Ltd. 13 = Gulf Energy Co., Ltd. 21 = Southern Philippines Power Corporation7 = EGCO Green Energy Co., Ltd. 14 = Gulf IPP Co., Ltd. 22 = Alto Power Management Corporation

15 = GPI Quezon Ltd. 23 = Western Mindanao Power Corporation

Joint VenturesName Major Shareholders Subsidiaries (Core Business) Subsidiaries

เอกสารแนบ 2 : ขอ้มลูการดํารงตําแหน่งของผูบ้รหิารและผูม้อีํานาจควบคมุ

The Positions of KEGCO's Management and the Control Persons in EGCO Group Companies as of December 31, 2009

KEGCO1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

1 Mr. Vinit Tangnoi DD DD D D DD2 Mr. Pikul Srisastra D D D D D3 Mr. Kwok Wing Ho D D

4 Mr. Nopporn Phansaengdao D D

5 Mr. Wattanee Phanachet D D

6 Mr. Chumsak Desudjit D DD D DD DD

7 Mr. Rasda Pongpaew D D, Managing Director D D

8 Mr. Chankij Jearaphunt D, Managing Director D D D D D

9 Mr. Mana Vitvaskul Deputy Managing Director - Operation

10 Mrs. Krisna Pinkaew Deputy Managing Director - Finance and Administration

11 Mr. Tanit Kalunkul Maintenance Division Manager

12 Mr. Amnat Tippayasak Operation Division Manager

13 Mr. Apichai Komhint Account & Budget Division Manager

14 Mr. Pairote Boonmak General Affairs Division Manager

RemarkA. DD = Chairman D = Director

B. 1 = EGCO Cogeneration Co., Ltd. 8 = Gulf Power Generation Co., Ltd. 16 = Eastern Water Resources Development and Management Public Co., Ltd.2 = EGCO Engineering & Service Co., Ltd. 9 = Gulf Cogeneration Co., Ltd. 17= Natural Energy Development Co., Ltd.3 = EGCO International (BVI) Ltd. 10 = Nongkhae Cogeneration Co., Ltd.4 = EGCO Green Energy Co., Ltd. 11 = Samutprakarn Cogeneration Co., Ltd.5 = Roi-Et Green Co., Ltd. 12 = Gulf Energy Co., Ltd.6 = Egcom Tara Co., Ltd. 13 = Gulf IPP Co., Ltd.7 = Gulf Electric Public Co., Ltd. 14 = Nam Thuen 2 Power Co., Ltd.

15 = BLCP Power Limited Ltd.

Name Other Companies in EGCO Group

เอกสารแนบ 2 : ขอ้มูลการดํารงตําแหน่งของผูบ้รหิารและผูม้อีํานาจควบคุม

The Positions of EGCO Cogen's Management and the Control Persons in EGCO Group Companies as of December 31, 2009

EGCO Cogen1 2 3 4 5 6 7 9 10 11 12 13 14

1 Mr. Chumsak Desudjit DD D D DD DD

2 Mr. Voravit Potisuk D D D D

3 Mr. Piya Jetasanon D

4 Mr. Supoth Chantavilartkul D, General Manager5 Mr. Jotaro Higuchi D D D

RemarkA. DD = Chairman D = Director

B. 1 = Khanom Electricity Generating Co., Ltd. 8 = Gulf Cogeneration Co., Ltd.2 = EGCO Engineering & Service Co., Ltd. 9 = Nongkhae Cogeneration Co., Ltd.3 = EGCO Green Energy Co., Ltd. 10 = Samutprakarn Cogeneration Co., Ltd.4 = Roi-Et Green Co., Ltd. 11 = Gulf Energy Co., Ltd.5 = Egcom Tara Co., Ltd. 12 = Conal Holdings Corporation6 = Gulf Electric Public Co., Ltd. 13 = Northern Mindanao Power Corporation7 = Gulf Power Generation Co., Ltd. 14 = Quezon Generating Co., Ltd.

Name Other Companies in EGCO Group

1

AUDIT COMMITTEE’S REPORT

The Audit Committee of EGCO comprises 3 independent directors whose qualifications, experience, and expertise are in accounting, finance, economics, law, management and energy business as well. The Chairman of the Audit Committee is Mr. Chaipat Sahasakul, and the other 2 members are Mr. Thanapich Mulapruk and Mr. Somphot Kanchanaporn.

The Audit Committee has performed its duties in conformity with the mission entrusted to it by the Board of Directors in the Audit Committee Charter which is in compliance with those specified by the Stock Exchange of Thailand (SET): the Audit Committee’s Qualification and Scope of Duties and Responsibilities B.E.2551. The Audit Committee regularly reports the Committee’s Minutes of Meetings to the Board of Directors.

During 2009, the Committee held 15 meetings with 100% attendance in 14 meetings and 1 member could not attend 1 meeting. The Committee Meeting Attendance Report is shown in Corporate Governance section in the Annual Report.

Summary of major activities is as follows:

- Review the 2009 quarterly financial statements and the annual financial statements with both the external auditor and the Management. This was accomplished by asking questions and providing comments and useful recommendations to ensure that the process to prepare the financial statements and major disclosures were complete, accurate, reliable, in compliance with related laws and regulations, and in accordance with the generally accepted accounting principles which were consistently applied. The Committee has supported the IFRS (International Financial Reporting Standards) adoption of EGCO’s financial statements in accordance with FAP’s (Federation of Accounting Profession) and SEC’s guidelines.

- Consider the accuracy and adequacy of EGCO’s disclosure on related-party transactions or any transactions that may cause conflict of interest. The appropriateness, reasons, fairness, and conditions of transactions have been considered as well.

- Review with the management the risk management policy, the practice compliance with such policy and EGCO’s risk management guidelines. The

2

Committee supported EGCO’s Enterprise Risk Management Enhancement Program in 2009 to ensure the continuous and enterprise wide risk management of EGCO and its subsidiaries. The current and future major risks and fraud risk have been considered for mitigation and management as well.

- Review the sufficiency and effectiveness of the internal control systems. The Committee considered the internal auditor’s and the external auditor’s reports, the results of the internal control evaluation of EGCO and its subsidiaries together with the internal control questionnaires which were prepared in compliance with the Committee of Sponsoring Organizations of the Treadway Commission’s ( COSO ) guidelines.

- Review and acknowledge the Code of Conduct Compliance Statement and General Representation Letter submitted by the President to the Chairman. The process of preparing those statements as well as their contents provided the assurances to the Committee that EGCO’s operations were in compliance with the Code of Conduct and the internal control systems and that the financial information and disclosures were accurate, complete and reliable.

- Approve the audit plan which included “management audit” requested by the Committee, the scope of work, the budget and the manpower of the Internal Audit Division. The Committee also conducted the performance appraisal of the internal audit manager who functionally reported to the Committee.

- Review with Management EGCO’s compliance procedures to ensure that the Management and the operations complied with the securities and exchange laws and regulations of the SET and laws relating to the business of EGCO.

- Consider other services performed by the audit firm’s group companies for EGCO and its subsidiaries during 2009. It was determined that the scope of work and fees for other services were not significant and did not influence the independence of the auditor.

- Hold exclusive meeting with the external auditors to ensure their independence.

3

- Review the Management Discussion and Analysis (MD&A) with Management to ensure its accuracy, adequacy and usefulness to shareholders and investors for making their investment decisions.

- Review the Audit Committee Charter to ensure that the duties entrusted to them in 2009 were achieved and complied with international practices and those specified by the SET’s Audit Committee Best Practice Guidelines, while also being appropriate for EGCO’s business.

- Assess the Audit Committee’s performance for the year 2009 by completing the Audit Committee’s Self-Assessment Form which complied with SET’s regulations and international good practice. The result of this self-assessment was reported to the Board of Directors.

- Enhance other good corporate governance practices such as providing the channel for employees and shareholders to direct their complaints, suspected violation of laws and Code of Conduct and questions about the financial statements and internal control systems by email to [email protected]. Such email address could be accessed only by the Chairman of the Audit Committee.

Based on the above practices, the Committee was of the opinion that EGCO’s 2009 financial statement was accurate, complete, and reliable. The internal control system was adequate and appropriate. Operations were compliance with the Securities and Exchange Act, regulations of the Stock Exchange of Thailand and laws relating to the business of EGCO. In addition, information disclosure in case of related-party transaction or conflict of interest was correct and complete.

The Committee reviewed the auditors’ performance in 2009 and recommended to the Board of Directors that PricewaterhouseCoopers ABAS Ltd., Ms. Nangnoi Charoenthaveesub Certified Public Accountant (Thailand) No. 3044, Mr. Prasan Chuaphanich Certified Public Accountant (Thailand) No. 3051, and Mr. Vichien Khingmontri Certified Public Accountant (Thailand) No. 3977, be re-appointed by the shareholders as the Company’s auditors for 2010 due to their professional practices, appropriate experience and discharging their duties effectively.

Mr. Chaipat Sahasakul Chairman of the Audit Committee

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