ratch: annual report 2006
DESCRIPTION
annual reportTRANSCRIPT
The leading private electricity generating company in the region
with a commitment to secure relationships in different areas
to continuously operate successful electricity generating business
We generate energy for the country
We create profitability and return it to the shareholders
We empower the organization with good corporate governance practice
We empower social, community, and environmental development
We empower... for sustainable growth
Ratchaburi Electricity Generating Holding Public Company Limited
The leading private electricity generating company in the region
with a commitment to secure relationships in different areas
to continuously operate successful electricity generating business
We generate energy for the country
We create profitability and return it to the shareholders
We empower the organization with good corporate governance practice
We empower social, community, and environmental development
We empower... for sustainable growth
Ratchaburi Electricity Generating Holding Public Company Limited
Total Assets Net Profit
Financial Overview
Unit : Million Baht
RATCH2006
Financial Overview
2006 2005 2004
Total Assets 72,105.05 69,940.54 69,494.19
Total Revenues 51,848.22 44,836.83 40,416.43
Net Profit 6,106.04 6,066.36 6,487.03
EBITDA (Million Baht) 10,430.12 10,343.52 10,433.79
Earnings Per Share (Baht/share) 4.21 4.18 4.47
Book Value Per Share (Baht/share) 23.93 21.72 19.63
Dividend Per Share (Baht/share) 2.10 2.00 2.00
002Ratchaburi Electricity Generating Holding Public Company Limited
Financial Ratios
Liquidity Ratio 2006 2005 2004
Current Ratio (Times) 2.02 2.05 1.86
Quick Ratio (Times) 1.81 1.80 1.67
Cash Flow from Operation to
Current Liabilities (Times) 0.73 0.96 0.72
Accounts Receivable Turnover (Times) 6.64 6.68 8.54
Average Collection Period (Days) 55 54 43
Accounts Payable Turnover (Times) 7.58 7.43 7.54
Average Payment Period (Days) 48 49 48
Profitability Ratio 2006 2005 2004
Gross Profit Margin (%) 14.74 17.16 18.99
Net Profit Margin (%) 11.78 13.53 16.05
Return on Equity (%) 18.45 20.24 24.39
Efficiency Ratio 2006 2005 2004
Return on Assets (%) 8.60 8.70 9.50
Return on Fixed Assets (%) 19.14 18.17 18.14
Assets Turnover (Times) 0.73 0.64 0.59
EBITDA to Assets (%) 14.69 14.84 15.27
EBITDA to Fixed Assets (%) 22.48 21.43 20.86
Financial Policy Ratio 2006 2005 2004
Debt to Equity (Times) 1.08 1.22 1.44
Debt Service Coverage Ratio (DSCR) (Times) 2.41 2.33 2.52
003A n n u a l R e p o r t 2 0 0 6
1. Studies and Development for the New Sited of IPP Project In 2006, the Company has conducted a feasibility study of a potential site in the central and eastern parts of Thailand to
make itself ready for a new round bidding of the Independent Power Producer (IPP) project in 2007. Together with the consulting
firms, the Company has filed in a draft proposal covering studying details in various topics ranging from engineering to
technological suitability, production capacity, cost of production, return on investment, work plan and development directions.
Besides, preparation was made for both conducting an Environmental Impact Assessment Study and the project’s financial
planning to support the development of the project.
2. The Ratchaburi Powerûs Power Plant Project In 2006, construction of the Ratchaburi Power Company Limited (RPCL) – Power Plant Project in Ratchaburi Province, has
been commenced. The project consists of two blocks of Combined Cycle Power Plant with 700 megawatts production capacity
each. It has been constructed as it has been scheduled with well acceptance from surrounding communities. The construction of
the first block is expected to be completed and to start its Commercial Operation Date (COD) in March 2008 while the second
block will start its COD in June 2008. The effective capacity to the Company generating from this project is 350 megawatts
according to the 25 percent stake holding in Ratchaburi Power Company Limited.
3. Power Plant Projects in Lao PDR • The 615 MW Nam Ngum 2 Hydro Power Plant : In 2006, the Power Purchase Agreement (PPA) was negotiated
and agreed by the Electricity Generating Authority of Thailand (EGAT), in which specifies electricity tariffs for the 25 years
concession. Moreover, the Company has also negotiated with a group of financial institutions, which resulted in the concurrences
of the Loan Agreement and PPA on May 26, 2006. The Project had its first initial drawdown on June 30, 2006, and it is, now,
under construction. This plant is expected to start its commercial operation by 2013. As the Company holds 25 percent of
the Nam Ngum 2 Hydro Power Plant, this will increase the Company’s production capacity by 153.75 megawatts.
• The 440 MW Nam Ngum 3 Hydro Power Plant : Together with MDX Lao Company Limited, the Company had
successfully negotiated with EGAT, regarding to the electricity tariff structure and the conditions of power purchase by EGAT.
The Memorendum of Understanding (MOU) on power purchase from the Nam Ngum 3 Hydro Power Plant was eventually signed
between EGAT and the project’s consortium; which are MDX Lao Company Limited, Marubeni Corporation and the Company on
December 18, 2006. The Company expects to hold 25 percent shares in this project and will negotiate terms and conditions of
the long-term PPA with EGAT. It is expected that the joint venture agreement and the PPA will be executed within 2007, and
consequently construction period will be last about 5-6 years before the plant starts its first commercial operation in 2013.
4. Associated Gas Power Plant Project (Pratu Tao-A) The 1.75 megawatt project is situated at Kong Sub-District, Kongkrailart District, Sukhothai Province. On January 17, 2006,
an associated gas purchase agreement was signed with PTTEP Siam Limited and the PTT Exploration and Production Public
Company Limited (PTTEP). Afterward, on September 11, 2006, a Power Purchase Agreement was signed with EGAT, and the
project was granted an investment privilege from the Board of Investment (BOI) on December 29, 2006. The project has conducted
public relations activities at the site to promote understanding and support from local communities.
5. A Study to Develop Renewable Energy Power Plant To support the future renewable energy policy enacted by the government, the Company by its subsidiary, Ratchaburi Energy
Company Limited, has been doing a feasibility study over the development of power plant based on renewable resources as follows.
• A wind-powered plant : To study the feasibility of the potential area, collecting and recording all related information
such as wind velocity data, economic analysis, financial consideration and return on investment.
• A project on an alternative energy : The Company has been assessing a possibility to co-invest in Stirling Solar
System. The Company has also monitored and reviewed details of the Solar Thermal Power Plant.
• An ethanol production plant (alcohol with 95 percent purity) using shredded cassava as raw material, Siam Ethanol
Exports Company Limited - which the Company holds 15 percent of the total stake- has a capacity to produce ethanol at 30
million liters per year. The plant is under construction and is expected to run its operation in 2007.
Highlights of Operation in 2006
RATCH2006
Highlights of Operationin 2006
004Ratchaburi Electricity Generating Holding Public Company Limited
6. Social Management Activities In 2006, the Company has restructured the Ratchaburi Power Plant’s Communication Center to be the mechanism to
cooperate with the local communities, creating a strong relationship and acceptance on the Power Plant from people and leaders
in the communities. At the same time, this center is also closely responsible for Ratchaburi Power Plant’s Community
Development Project that is currently operated by the Population and Community Development Association. (PDA),which aims
to create concrete outcomes and certain that accurate information was given to relevant authorities for better cooperation and
support of our power plant project.
The Company has also budgeted a fund with an aim to develop life quality of people in Ratchaburi Province, composed of
a fund for developing life quality for Damnern Saduak District, a fund for Photharam District, a fund for Mueang District and
a fund for improving quality of life for community in general areas of Ratchaburi Province.
As a result, people in the communities, their leaders and government agencies in areas surrounding the Ratchaburi Power
Plant have increasingly accepted the power plant project and its expanded unit.
7. Corporate Governance Awards • The Company was awarded the “Distinction in Maintaining Excellent Corporate Governance Report” from the Stock
Exchange of Thailand (SET) in the SET Awards 2006, held by SET and Money & Banking Magazine on July 26, 2006. The award was
given to listed companies that can maintain corporate governance reporting standards for the second consecutive year.
Altogether, only 16 listed companies were given this award.
• Based on the survey of the Institute of Directors (IOD) together with the SET and the Securities and Exchange
Commission (SEC) on corporate governance practices of listed companies in 2006, the Company was ranked “excellent” and was
one of the nine firms being ranked at such level. The evaluation was divided into five rankings: namely, “excellent,” “very good,”
“good,” “fair,” and “pass.” The scores were given on the basis of transparency and disclosure on the Form 56-1, notice to attend
Shareholder’ s Annual General Meeting (AGM), information revealed on the Company website and news released through the
system of the SET and other information pressed to the public.
• The Company was given 93.14 scores out of 110 total scores in the AGM Assessment Program conducted by the SEC.
433 listed companies were subjected to this assessment; with the overall average score of 71 and the highest score evaluated
of 105.
• On December 22, 2006, Ratchaburi Electricity Generating Company Limited-the main subsidiary of the Company was
awarded for its outstanding business moral and ethic from the Thai Chamber of Commerce. The project has been held since 2004,
with an aimed to promote business ethics among members. Ratchaburi Electricity Generating Company Limited was one among
11 companies that were given this award, which truly reflected that its management is based on the corporate governance
principles. The award also signified its outstanding performances in production activity, employee welfare, communities concerns
and sincerity to develop the quality of life of people living around the Power Plant and in Ratchaburi Province on a long-term basis.
8. Credit Ratings and the Companyûs Credit Rating Trend On July 27, 2006, TRIS Rating Company Limited (TRIS) announced their confirmation on the Company’s credit rating at
“AA-”, reflecting a constant flow of dividend income received from the main subsidiary-Ratchaburi Electricity Generating
Company Limited- and the fact that the Company has high quality power plants as well as its product investment policy.
However, the Company itself holds some weakness that the lender of the Company has subsequent right to claim over the asset
after the lender of Ratchaburi Electricity Generating Company Limited, and that the future government policy over the
privatization is uncertain.
Still, TRIS has rated the Company’s credit rating trend as “stable” to reflect its expectation over the fact that the Company
would constantly receive dividend from Ratchaburi Electricity Generating Company Limited and other power plants. Over more,
TRIS has also expected that the Company shall always make cautious investment decisions in the future.
On July 27, 2006, TRIS has confirmed to maintain their credit rating on Ratchaburi Electricity Generating Company
Limited, the Company’s main subsidiary, at “AA” rewarded to its steady cash flow generated by its Ratchaburi Power Plant that
operated with modern and high technology equipment by experienced and expertise persons in managing power plants.
005A n n u a l R e p o r t 2 0 0 6
Message from the Chairman of the Board of Directors
Dear Shareholders
Year 2006 was marked as an auspicious time for Thailand and Thai people as the entire country have celebrated
the 60th Anniversary of His Majesty’s Accession to the Throne. The government and private sectors have jointly
organized memorable, once in a lifetime celebrations that immensely impressed people not only in Thailand but also
in other countries.
On the other hand, 2006 was a year of structural change for the country, in terms of economy, society,
environment and politics, which had direct effects on the energy business. The global oil price fluctuation had brought
a massive negative impact on overall economic growth. One of the most severe nationwide flooding and changes in
the government and policies have forced every organization in every sector to alter their management policy
responsively.
Ratchaburi Electricity Generating Public Company Limited (“The Company”), a leading electricity generating
company in Thailand, had to adjust its visions, missions and policies to be in line with the government’s new energy policy.
The Company has prepared for its investment expansion in order to keep its consistent growth and to implement its
efficient management based on the Good Corporate Governance guideline of the Stock Exchange of Thailand (SET).
Powering the Growth
Last year, the Company has invested in subsidiaries and co-invested with other companies to develop various
projects, including the existing projects implemented continuously from 2005 and the new project introduced in 2006.
These projects include 1) the development of Ratchaburi Power Company Limited (RPCL)’s Power Plant with 1,400-
megawatt production capacity in Ratchaburi province in which the Company holds 25 percent and is expected to
operate in 2008; 2) the development of the Nam Ngum 2 Hydro Power Plant in Lao PDR with 615-megawatt
ç...With outstanding operating performance, consistent project development and its responsive
and competitiveness, it can be assured that
the Company will continue to develop and achieve
consistent progress in our business operations....é
RATCH2006
Message from the Chairmanof the Board of Directors
006Ratchaburi Electricity Generating Holding Public Company Limited
production capacity which commercial operation expected to be in 2013; 3) the development of the Nam Ngum 3
Hydro Power Plant in Lao PDR with 440-megawatt production capacity which is expected to be completed and start
operation in 2013; and 4) the development of small renewable energy power plant which will produce electricity from
the associated gas from Pratu Tao-A oil rig in Sukhothai province with 1.75-megawatt production capacity, expected to
start its operation in 2007.
The Company’s subsidiary, Ratchaburi Energy Company Limited has also continued with its investment in
related businesses. The subsidiary invested in an alcohol manufactoring plant of Siam Ethanol Exports Company
Limited, with 15 percent stake. This plant is located in Rayong province. It has a total alcohol production capacity of 30
million liters per year and will start to produce and sell alcohol in 2007.
Ready for future
The Company has been preparing to bid in the Independent Power Producer (IPP) project in 2007 to cope
with increasing domestic demand for electricity, in accordance with Thailand’s Power Development Plan 2007-2021.
The Company has conducted a feasibility study of the projects and its potential location as well as started some
community relation works to prevent possible conflicts or objection from communities against the mega-project
development. The Company is now ready to participate in the bidding process and is confident that it will be able to
expand the group’s electricity generation capacity constantly in the future.
In addition, the Company has been prepared to expand its investment in neighboring countries, in order to
achieve its goal- to become a leading electricity producer in the region.
Towards Business Excellence
In 2006, the Company has restructured its organization to cope with changes and to support its business
expansion in the future. Such restructure included the implementation of information system technology in human
resource management to enhance employees’ morale and equitable treatment in human resource management, in
accordance with the good corporate governance principle.
Continuous Growth
Last year, the Company’s operating performance has grown constantly, reflecting its achievement in managing
business in accordance with the Company’s policy. At the end of 2006, the Company’s reported Baht 51,848 million
consolidated revenue, increasing by Baht 7,011 million from 2005, while its expense and tax were Baht 45,742 million.
Thus, its net profit was accounted to be Baht 6,106 million, or Baht 4.21 earning per share. Total assets were recorded at
Baht 72,105 million, increasing by Baht 2,165 million. These financial results clearly reflect the Company’s management
and operational efficiency that increases investors’ confidence. TRIS Rating Company Limited has maintained
organizational rating result on the Company and Ratchaburi Electricity Generating Company Limited-the Company’s
subsidiary at the same rating level as 2005, which are “AA-” and “AA” respectively.
The Company also values community relations and development of communities surrounding Ratchaburi
Power Plant as a very essential composition to the success operation of the Ratchaburi Power Plant and the
construction of the extension project. The Company’s commitment has earned a very strong recognition and
perception from communities, community leaders, and government agencies. This bonded relationship has enabled
the Company to operate its business smoothly according to its plan.
007A n n u a l R e p o r t 2 0 0 6
Recognition for success
Awards and recognitions the Company achieved provide great inspiration for the Company to move forward.
In 2006, the Company received “Distinction in Maintaining Excellence Corporate Governance Report Award” from
the SET Awards 2006 organized by SET and Money & Banking magazine. The award is granted in recognition of an
outstanding company that has successfully maintained high standard for good corporate governance report for two
consecutive years.
At the Corporate Governance Report of Thai Listed Companies 2006 organized by Thai Institute of Directors
Association (IOD), SET, and the Securities and Exchange Commission (SEC), the Company was one of nine companies
rated “Excellent” based on the good corporate governance guidelines of Organization for Economic Corporation and
Development (OECD) and SET, which take into account the right of shareholders, equitable treatment of shareholders,
stakeholders’ role, disclosure of information, transparency, the responsibility of the Company’s Board of Directors.
Besides, the Company also participated in the Annual General Meeting (AGM) Assessment Program, organized
by the SEC. In 2006, among 433 companies participated in this program, the Company has achieved 93.14 point from
110 full scores.
Ratchaburi Electricity Generating Company Limited, the core subsidiary of the Company, has also adopted the
same ethical business operation principles. It is one of 11 companies that won the “Company with Outstanding Ethical
Practice by the Thai Chamber of Commerce 2006” awarded by the Thai Chamber of Commerce Board. Considering that
62 companies participated in the program, it clearly reflects that the subsidiary has committed to good corporate
governance, strength in production, employee care, social responsibility, and sincerity in quality of life development for
people living around the Power Plant in Ratchaburi Province.
With outstanding operating performance, consistent project development and its responsive and
competitiveness, it can be assured that the Company will continue to develop and achieve consistent growth in our
business area. Moreover, because our shareholders have continuously trusted and supported the Company on the
same patch for the past six years, the Board of Directors, the management and all our employees have been inspired
to further improve their performance and efficiency to drive the growth of the organization and the country.
ç...In 2006, the Company received Distinction in Maintaining Excellence Corporate
Governance Report Award from the SET Awards 2006 organized by SET and Money & Banking magazine....é
Cherdpong Siriwit Chairman
008Ratchaburi Electricity Generating Holding Public Company Limited
Power of the FUTURE Electricity is crucial to the country’s development, drives
national economic progress and plays an important part
in people’s lives.
Our long-term experience and expertise make strong ground
for our contribution to healthy society.
We, with our vital responsibility in electricity generating
and development, are committed to generate power
that drives the country towards sustainable development.
009A n n u a l R e p o r t 2 0 0 6
Board of Directors
Mr. Cherdpong Siriwit
- Chairman
- Independent Director
- Chairman, Human Resources and Remuneration
Committee
Age 60
Shareholders’ Equity (%) None
Attendance to the Board of Directors’
meeting in 2006: 13 from total 13 meetings
Education / Training
- Master of Economics, Georgetown University,
U.S.A.
- Bachelor of Economics (Hons.),
Thammasat University
- Diploma, National Defence College (Class 40)
- Certificate, King Prajadhipok’s Institute “Politics
and Governance in Democratic Systems for
Executive” (Class 5)
Mr. Viravat Chlayon
- Independent Director
- Chairman, Risk Management Committee
- Member, Audit Committee
Age 67
Shareholders’ Equity (%) 0.0006
Attendance to the Board of Directors’
meeting in 2006: 13 from total 13 meetings
Mr. Pongpayome Vasaputi
Director
Age 58
Shareholders’ Equity (%) None
Attendance to the Board of Directors’
meeting in 2006: 1 from total 1 meeting
Education / Training
- Bachelor of Engineering (Mechanical Engineering),
Chulalongkorn University
- Diploma, National Defence College (Class 35)
- Certificate, Psychological Operation Staff Course,
Applied Psychology Institute (Class 57)
- Certificate, Advanced Management Program
(AMP), Harvard Business School, Harvard University,
U.S.A.
Education / Training
- Master of Development Administration (Hons.),
NIDA
- Bachelor of Political Science (Hons.),
Chulalongkorn University
- Diploma, National Defence College (Class 38)
- Certificate, District Officers Course, The Institute
of Administration Development (Class 16)
- Certificate, Senior Governing Officers Course,
The Institute of Administration Development
(Class 20)
RATCH2006
Board of Directors
010Ratchaburi Electricity Generating Holding Public Company Limited
010Ratchaburi Electricity Generating Holding Public Company Limited
- Certificate, The Civil Service Executive Development
Program (Class 13), The Civil Service Training
Institute
- Certificates, Chairman Program,
Director Accreditation Program, and Finance for
Non-Finance Director Program, Thai Institute of
Directors Association (IOD)
Working Experiences
Current
Chairman, Ratchaburi Electricity Generating
Holding Public Company Limited
Other Current Position Related to the
Company’s Business
- Chairman, PTT Public Company Limited
- Chairman, PTT Exploration and Production Public
Company Limited
- Chairman, Thai Oil Public Company Limited
- Chairman, Rayong Refinery Public Company Limited
- Chairman, PTT Chemical Public Company Limited
- Director, Thaioil Power Company Limited
Previous
- Permanent Secretary, Ministry of Energy
- Deputy Permanent Secretary, Ministry of Industry
- Chairman, EGAT
- Secretary-General, Thai Industrial Standards
Institute (TISI), Ministry of Industry
- Director-General, Department of Mineral
Resources (DMR), Ministry of Industry
- Director-General, Office of Industrial Economics,
Ministry of Industry
- Deputy Director - General, Office of Industrial
Economics, Ministry of Industry
- Secretary - General, Office of the Cane and Sugar
Board, Ministry of Industry
- Certificates, Director Accreditation Program,
Finance for Non-Finance Director Program,
Seminar on “Audit Committee : 5-year experiences
toward Effectiveness”, Seminar on “Independence
of Director and Conflict of Interest Management”,
and Workshop on “Setting the CEO Performance
Plan and Evaluation”, Thai Institute of Directors
Association (IOD)
Working Experiences
Current
- Director, Suan Lung Rama IX Foundation
- Board member, The Institute for the Promotion
of Teaching Science and Technology
Other Current Position Related to the
Company’s Business
- None
Working Experiences
Current
Permanent Secretary, Ministry of Interior
Other Current Position Related to the
Company’s Business
Director, EGAT
Previous
- Governor, EGAT
- President-Mineral Business, EGAT
- Deputy Governor-Administration, EGAT
- Chairman, Electricity Generating Public Company
Limited
Previous
- Deputy Permanent Secretary, Ministry of Interior
- Governor of Nakhonratchasima Province, Phuket
Province, Narathiwat Province, and Tak Province
- Director-General, Department of Disaster
Prevention and Mitigation, Ministry of Interior
- Director-General, Department of Local
Administration, Ministry of Interior
011A n n u a l R e p o r t 2 0 0 6
011A n n u a l R e p o r t 2 0 0 6
Mr. Chulasingh Vasantasingh Director
Age 56
Shareholders’ Equity (%) None
Attendance to the Board of Directors’
meeting in 2006: 10 from total 13 meetings
Mr. Panich Pongpirodom - Independent Director
- Member, Risk Management Committee
Age 57
Shareholders’ Equity (%) None
Attendance to the Board of Directors’
meeting in 2006: 9 from total 9 meetings
Mr. Lae Dilokvidhyarat
Director
Age 59
Shareholders’ Equity (%) None
Attendance to the Board of Directors’
meeting in 2006: - from total 1 meeting
Education / Training
- Master of Development Studies, Institute of
Social Studies, Hague, The Netherlands
- Bachelor of Political Science,
Chulalongkorn University
- Certificates, Director Certificate Program, Audit
Committee Program, and Finance for Non-Finance
Director Program, Thai Institute of Directors
Association (IOD)
Education / Training
- Master of Comparative Law (MCL.), University of
Illinois, U.S.A.
- Bachelor of Laws (LLB.) (Hons.), Chulalongkorn
University
- Barrister-at-Law, The Institution of Legal Education
- Diploma, National Defence College
- Certificate, Harvard Business School, U.S.A.
- Certificate, Director Certificate Program,
Thai Institute of Directors Association (IOD)
Education / Training
- Ph.D. of Engineering (Coastal Engineering),
Asian Institute of Technology
- Master of Engineering (Coastal Engineering),
Asian Institute of Technology
• Master of Engineering (Sanitary Engineering),
Chulalongkorn University
- Bachelor of Engineering (Civil Engineering),
Chulalongkorn University
- Diploma, National Defence College (Class 15)
- Certificate, Senior Governing Course (Class 32)
012Ratchaburi Electricity Generating Holding Public Company Limited
012Ratchaburi Electricity Generating Holding Public Company Limited
Working Experiences
Current
Associate Professor (Director of Labour and
Management Development Centre), Faculty
of Economics, Chulalongkorn University
Other Current Position Related to the
Company’s Business
Director, EGAT
Previous
- Overseas Expert on Human Resource Development,
Japan International Cooperation Agency (JICA)
- National Programme Coordinator: International
Programme on the Elimination of Child Labour
(ILO-IPEC)
Working Experiences
Current
- Deputy Attorney General
- Director, Thai Bar Association
- Director, The Property of Chulalongkorn University
Other Current Position Related to the
Company’s Business
- Director, PTT Exploration and Production Public
Company Limited
- Director, EGAT
Previous
- Inspector-General, Department of Inspector
General
- Director-General, Department of Legal Counsel,
Office of the Attorney General
- Director-General, Department of Litigation of
Attorney General, Office of the Attorney General
- Director-General, Department of International
Affairs, Office of the Attorney General
- Director, Eastern Water Resources Development
and Management Public Company Limited
- Director and member of Audit Committee,
New Bangkok International Airport Public
Company Limited
- Director, Mass Communication Organization
of Thailand
- Certificates, Director Accreditation Program,
Understanding the Fundamental of Financial
Statements Program, and Seminar on “Setting
the CEO Performance Plan and Evaluation,
Thai Institute of Directors Association (IOD)
Working Experiences
Current
- Director-General, Department of Alternative
Energy Development and Efficiency, Ministry
of Energy
Other Current Position Related to the
Company’s Business
- None
Previous
- Director–General, Department of Energy Business,
Ministry of Energy
- Inspector-General, Ministry of Energy
- Deputy Director–General, Department of
Alternative Energy Development and Efficiency,
Ministry of Energy
- Deputy Director–General, Department of
Energy Development and Promotion, Ministry
of Science, Technology and Environment
- Executive Director of Bureau of Energy Study,
Research and Development, Department of
Energy Promotion and Development
- Executive Director of Bureau of Energy
Development and Maintenance, Department
of Energy Promotion and Development
013A n n u a l R e p o r t 2 0 0 6
013A n n u a l R e p o r t 2 0 0 6
Ms. Sutharat Angchanpen - Director
- Member, Risk Management Committee
Age 59
Shareholders’ Equity (%) 0.0006
Attendance to the Board of Directors’
meeting in 2006: 1 from total 1 meeting
Mr. Kraisi Karnasuta Director
Age 59
Shareholders’ Equity (%) 0.0009
Attendance to the Board of Directors’
meeting in 2006: 11 from total 13 meetings
Mr. Suchart Thada-Thamrongvech - Independent Director
- Chairman, Audit Committee
Age 54
Shareholders’ Equity (%) None
Attendance to the Board of Directors’
meeting in 2006: 13 from total 13 meetings
Education / Training
- Ph.D. of Economics, McMaster University, Canada
- Master of Sciences, Economics, The London
School of Economics and Political Science,
United Kingdom
- Bachelor of Economics (Hons.),
Thammasat University
- Diploma, National Defence College (Public and
Private Program: Class 1)
- Certificate, Director Certificate Program,
Director Accreditation Program, Audit Committee
Program, Finance for Non-Finance Director
Program, Fostering a Board and Management
Education / Training - Bachelor in Engineering (Electrical Engineering)
(2nd Class Honor), Chulalongkorn University
- Certificate, Management of Public Economy
for Executive, King Prajadhipok’s Institute
- Certificate, Director Certificate Program,
Thai Institute of Directors Association (IOD)
Working Experiences
Current - Deputy Governor-Development, EGAT
Education / Training
- Master of Engineering (Electrical Engineering),
University of Washington, U.S.A.
- Bachelor of Engineering (Electrical Engineering),
Chulalongkorn University
- Diploma, National Defence College (Class 43)
- Certificate, Advanced Management Program
(AMP), Harvard Business School, Harvard University,
U.S.A.
- Certificate, Director Certificate Program, Thai
Institute of Directors Association (IOD)
014Ratchaburi Electricity Generating Holding Public Company Limited
014Ratchaburi Electricity Generating Holding Public Company Limited
Team Program, and Seminar on “Audit Committee:
5-year Experiences toward Effectiveness”,
Thai Institute of Directors Association (IOD)
Working Experiences
Current
- Associate Professor of Economics, Faculty of
Economics, Ramkhamhaeng University
- Independent Director and Audit Committee,
Siam City Bank Public Company Limited
- Director, Rayong Refinery Public Company Limited
- Director, Petroleum Committee
- Director, Council of the North Eastern University
Other Current Position Related to the
Company’s Business
- Independent Director and member of Audit
Committee, PTT Public Company Limited
Previous
- Eminent Advisor to the Prime Minister in the
Field of Economics
- Advisor to the Minister of Commerce
- Policy Advisor to the Minister of Energy
- Vice Rector for International Affairs and Research,
Ramkhamhaeng University
- Director, Provincial Waterworks Authority
- Director, Bangkok Metropolitan Bank Public
Company Limited
- Director and Chairman of the Audit Committee,
Bangkok Rubber Public Company Limited
- Director and Chairman of the Audit Committee,
Pan asia Footwear Public Company Limited
- Director, Metropolitan Waterworks Authority
- Director, Bank for Agriculture and Agricultural
Cooperatives
- Director, Rice Policy Committee
- Advisor to the Board of Investment
- Director, Securities and Exchange Commission,
Thailand
Working Experiences
Current
- Governor, EGAT
Other Current Position Related to the
Company’s Business
- Director, EGAT
- Chairman, Ratchaburi Electricity Generating
Company Limited
Previous
- Deputy Governor-Policy and Planning, EGAT
- President, Electricity Generating Public Company
Limited
- President, Maintenance Business, EGAT
- Assistant Governor in Transmission System
Operation, EGAT
- Director-System Control and Operation Division,
EGAT
Other Current Position Related to the
Company’s Business - Director, SouthEast Asia Energy Limited
Previous - Director, Ratchaburi Electricity Generating
Company Limited
- Deputy Governor-Transmission System
Development, EGAT
- Deputy Governor-System Control, EGAT
- Assistant Governor-System Control, EGAT
- Assistant Governor-Transmission System
Maintenance, EGAT
015A n n u a l R e p o r t 2 0 0 6
015A n n u a l R e p o r t 2 0 0 6
Mr. Narong Sitasuwan - Director
- Managing Director
Age 58
Shareholders’ Equity (%) 0.0083
Attendance to the Board of Directors’
meeting in 2006 : 12 from total 13 meetings
Mr. Areepong Bhoocha-oom - Independent Director
- Member, Audit Committee
- Member, Human Resources and Remuneration
Committee
Age 49
Shareholders’ Equity (%) 0.0007
Attendance to the Board of Directors’
meeting in 2006 : 12 from total 13 meetings
Mr. Chanin Vongkusolkit Director
Age 54
Shareholders’ Equity (%) None
Attendance to the Board of Directors’
meeting in 2006: 10 from total 13 meetings
Mr. Vinit Tangnoi - Director
- Member, Human Resources and Remuneration
Committee
Age 55
Shareholders’ Equity (%) 0.0005
Attendance to the Board of Directors’
meeting in 2006: - from total 1 meeting
Education / Training
- Master of Science in Industrial Engineering,
University of Texas-Arlington, U.S.A.
- Bachelor in Engineering (Mechanical Engineering),
Kasetsart University
- Certificate, Advanced Management Program,
Havard Business School
- Certificate, Senior Executive Program, Sasin
Graduate Institute of Business Administration
of Chulalongkorn University
Education / Training
- Master of Business Administration (Finance),
St.Louis University, U.S.A.
- Bachelor in Economics, Thammasat University
- Certificate, Director Certificate Program,
Thai Institute of Directors Association (IOD)
Education / Training
- Ph.D. of Finance, University of Mississippi, U.S.A.
- Master of Business Administration (Finance),
Marshall University, U.S.A.
- Bachelor of International Management, Boston
University, U.S.A.
- Certificate, Director Certificate Program,
Thai Institute of Directors Association (IOD)
Education / Training
- Master of Engineering (Mechanical and Aerospace
Engineering), Illinois Institute of Technology,
U.S.A.
- Bachelor of Engineering, Mechanical Engineering
(2nd Class Honor), Chulalongkorn University
- Certificate, Electralis 2001, Belgium
- Certificate, Eighth International Training Program
on Utility Regulation & Strategy, University of
Florida, U.S.A.
016Ratchaburi Electricity Generating Holding Public Company Limited
016Ratchaburi Electricity Generating Holding Public Company Limited
- Certificate of Army War College Regular,
Institute of Army Academics
- Certificate, Director Certificate Program,
Thai Institute of Directors Association (IOD)
Working Experiences
Current
Deputy Governor-System Control, EGAT
Other Current Position Related to the
Company’s Business
Chairman, District Cooling System and
Power Plant Company Limited
Previous
- Assistant Governor-Policy and Planning, EGAT
- Assistant Governor-Fuel Management, EGAT
Working Experiences
Current
- Director, Federation of Thai Capital Market
Organizations
- Vice Chairman, Listed Companies Association
- Director, The Erawan Group Public Company
Limited
- Director, Mitr Phol Sugar Company Limited
Other Current Position Related to the
Company’s Business
- Director and Chief Executive Officer,
Banpu Public Company Limited
- Director, BLCP Power Company Limited
Previous
- Director, Tri Energy Company Limited
- Director, United Standard Terminal Company
Limited
- Director, United Securities Public Company Limited
Working Experiences
Current
- Deputy Director - General, State Enterprise
Policy Office, Ministry of Finance
- Director, Airport Authority of Thailand Public
Company Limited
Other Current Position Related to the
Company’s Business
- Director, Ratchaburi Electricity Generating
Company Limited
Previous
- Director, Ratchaburi Energy Company Limited
- Director, Padaeng Industry Public Company
Limited
- Director, Krungthai Card Public Company Limited
- Director, Office of State Enterprise and Government
Securities, Ministry of Finance
- Certificate, Positioning Utility Executives
for Change (PUEC), U.S.A.
- Certificate, International Course for Executives
in Globalization Era, U.S.A.
- Certificate, Director Certificate Program,
Thai Institute of Directors Association (IOD)
Working Experiences
Current
- Managing Director, Ratchaburi Electricity
Generating Public Company Limited
Other Current Position Related to the
Company’s Business
- Director, Ratchaburi Electricity Generating
Company Limited
- Director, Tri Energy Company Limited
- Director, Ratchaburi Power Company Limited
- Director, SouthEast Asia Energy Limited
- Engineer level 14 (Equivalent to Deputy
Governor), EGAT
Previous
- President, Generating Business, EGAT
- Senior Deputy Governor, Generation Group, EGAT
- President, Maintenance Business, EGAT
- Vice President-Maintenance Business, EGAT
- Director, Electricity Generating Public Company
Limited
- Director, Rayong Electricity Generating Company
Limited
- Director, Khanom Electricity Generating Company
Limited
- Director, EGCO Engineering & Service Company
Limited
017A n n u a l R e p o r t 2 0 0 6
017A n n u a l R e p o r t 2 0 0 6
1 2 3 4 5 6 7 8 9
1. Mr. Narong Sitasuwan Managing Director
2. Mr. Thawat Vimolsarawong Deputy Managing Director-Business Ventures
3. Ms. Vajana Angsukomutkul Deputy Managing Director-Accounting and Finance
4. Mr. Prachuab Ujjin Deputy Managing Director, seconded to be the Managing Director of
the Ratchaburi Electricity Generating Company Limited
5. Mr. Peerawat Pumthong Assistant Managing Director-Business Ventures
6. Mrs. Arunee Rojanapenkul Assistant Managing Director-Accounting and Finance
and Acting Director, Finance Division
7. Mr. Prayut Thongsuwan Assistant Managing Director-Administration
8. Mr. Somnuk Jindasup Assistant Managing Director, seconded to be the Deputy Managing Director
of the Ratchaburi Electricity Generating Company Limited
9. Mr. Vatchara Noomahan Assistant Managing Director, seconded to be the President of
the Tri Energy Company Limited
RATCH2006
Executive Officers
Executive Officers
018Ratchaburi Electricity Generating Holding Public Company Limited
018Ratchaburi Electricity Generating Holding Public Company Limited
1 Mr. Narong Sitasuwan Director and Managing Director
Age 58
Education / Training
- Master of Engineering (Mechanical and Aerospace
Engineering), Illinois Institute of Technology, U.S.A.
- Bachelor of Engineering (Mechanical Engineering)
(2nd Class Honor), Chulalongkorn University
- Certificate, Electralis 2001, Belgium
- Certificate, Eighth International Training Program
on Utility Regulation & Strategy, University of
Florida, U.S.A.
- Certificate, Positioning Utility Executives for
Change (PUEC), U.S.A.
- Certificate, International Course for Executives
in Globalization Era, U.S.A
- Certificate, Director Certification Program,
Thai Institute of Directors Association (IOD)
Working Experiences
Current
Managing Director, Ratchaburi Electricity
Generating Holding Public Company Limited
Other Current Position Related to the
Company’s Business
- Director, Ratchaburi Electricity Generating
Company Limited
- Director, Tri Energy Company Limited
- Director, Ratchaburi Power Company Limited
- Director, SouthEast Asia Energy Limited
- Engineer level 14 (Equivalent to Deputy
Governor), EGAT
Previous
- President, Generating Business, EGAT
- Senior Deputy Governor, Generation Group,
EGAT
- President, Maintenance Business, EGAT
- Vice President, Maintenance Business, EGAT
- Director, Electricity Generating Public Company
Limited
- Director, Rayong Electricity Generating Company
Limited
- Director, Khanom Electricity Generating Company
Limited
- Director, EGCO Engineering & Service Company
Limited
Mr. Thawat Vimolsarawong Deputy Managing Director-Business Ventures
Age 57
Education / Training
- Bachelor of Engineering,
Chulalongkorn University
- Certificate, Effective Leadership Management,
Strategic Resources International, U.S.A.
- Certificate, Strategic Asset Management,
Power Management Institute, U.S.A.
- Certificate, Global Leadership 2000, School of
Business and Economics, Institute of Research
and Business Development, U.S.A.
- Certificate, Global 2000 Strategic Management,
University of California, U.S.A.
- Certificate, Psychological Operations Staff
Course, Applied Psychology Institute
- Certificate, Senior Executive Program, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
Working Experiences
Current
Deputy Managing Director-Business Ventures,
Ratchaburi Electricity Generating Holding Public
Company Limited
Other Current Position Related to the
Company’s Business
- Chairman, Ratch Udom Power Company Limited
- Chairman, Ratchaburi Alliances Company Limited
- Chairman, Ratchaburi Energy Company Limited
- Director and Managing Director, Chubu
Ratchaburi Electric Services Company Limited
- Director, Siam Ethanol Exports Company Limited
- Executive Director, Ratchaburi Power Company
Limited
- Executive Director, SouthEast Asia Energy
Limited
- Engineer level 13 (Equivalent to Assistant
Governor), EGAT
Previous
- Director, Mechanical Maintenance Division,
EGAT
- Manager, Maintenance Service Management
Division, EGAT
- Manager, Maintenance Service Management
Sub- division, EGAT
2
019A n n u a l R e p o r t 2 0 0 6
019A n n u a l R e p o r t 2 0 0 6
Ms. Vajana Angsukomutkul Deputy Managing Director-
Accounting and Finance
Age 60
Education / Training
- Master of Business Administration (Executive),
SASIN Graduate Institute of Business Administration,
Chulalongkorn University
- Bachelor of Accountancy (2nd Class Honor),
Chulalongkorn University
- Certificate Program, Chief Financial Officer (CFO),
Federation of Accounting Professions
Working Experiences
Current
Deputy Managing Director-Accounting and
Finance, Ratchaburi Electricity Generating Holding
Public Company Limited
Other Current Position Related to the
Company’s Business
- Director and Managing Director, Ratchaburi
Energy Company Limited
- Director, Tri Energy Company Limited
Previous
- Assistant Director, Controller Division, EGAT
- Chief, Account Finance and Budget Report
and Analysis Department, Controller Division,
EGAT
Mr. Prachuab Ujjin Deputy Managing Director,
seconded to be the Managing Director of
the Ratchaburi Electricity Generating
Company Limited
Age 55
Education / Training
- Master of Science (Electrical Engineering),
University of Missouri-Columbia, U.S.A.
- Bachelor of Engineering (Electrical Engineering),
Chulalongkorn University
- Certificate, Advanced Management Program
(AMP), Harvard Business School, Boston MA,
U.S.A.
- Certificate, Senior Executive Program, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
- Certificate, Director Certification Program,
Thai Institute of Directors Association (IOD)
Working Experiences Current Deputy Managing Director, seconded to be
the Managing Director of the Ratchaburi
Electricity Generating Company Limited
Other Current Position Related to the Company’s Business - Chairman, Ratchaburi Gas Company Limited
- Director, Chubu Ratchaburi Electric Services
Company Limited
- Executive Director, Ratchaburi Power Company
Limited
Previous - Director, Ratchaburi Power Plant Division, EGAT
- Director, Efficiency Control Division, EGAT
- Assistant Director, Efficiency Control Division,
EGAT
Mr. Peerawat Pumthong Assistant Managing Director-
Business Ventures
Age 48
Education / Training
- Master of Business Administration, Monash
University, Australia, Certificate of Merit in
International Business
- Master of Engineering, Asian Institute of
Technology (AIT)
- Bachelor of Engineering (2nd Class Honor),
Khonkaen University
- Certificate in ASEAN Executive Development
Program, Business School, Thammasart University
- Certificate in Electric Power Development from
Swedish Board of Investment and Technical
Support (BITS), Sweden
- Certificate, ASEAN Executive Program, General
Electric International Operation Company, inc.,
U.S.A.
Working Experiences Current Assistant Managing Director-Business Ventures,
Ratchaburi Electricity Generating Holding Public
Company Limited
Other Current Position Related to the Company’s Business - Director, Ratchaburi Alliances Company Limited
- Director, Ratchaburi Energy Company Limited
- Director, Siam Ethanol Exports Company Limited
- Advisor to the Senate Standing Committee on
Economics, Commerce and Industry
Previous - Senior Director, Business Management Division,
Ratchaburi Electricity Generating Holding Public
Company Limited
- Chief, Business Venture Group Portfolio
Management Division, EGAT
3
4
5
020Ratchaburi Electricity Generating Holding Public Company Limited
020Ratchaburi Electricity Generating Holding Public Company Limited
Mrs. Arunee Rojanapenkul Assistant Managing Director-
Accounting and Finance and
Acting Director, Finance Division
Age 59
Education / Training - Bachelor of Accountancy,
Chulalongkorn University
- Certificate, Chief Financial Officer (CFO),
Federation of Accounting Professions
- Certificate, Senior Executive Program, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
- Certificate, Advanced Mini MBA, Chulalongkorn
University
- Certificate, Mini MBA, Chulalongkorn University
Working Experiences Current Assistant Managing Director-Accounting and
Finance and Acting Director-Finance Division
Ratchaburi Electricity Generating Holding
Public Company Limited
Other Current Position Related to the Company’s Business - Director and Managing Director, Ratchaburi
Gas Company Limited
- Director and Managing Director, Ratch Udom
Power Company Limited
- Director and Managing Director, Ratchaburi
Alliances Company Limited
Previous - Director, Finance Division, Ratchaburi Electricity
Generating Holding Public Company Limited
- Director, Accounting Division, Ratchaburi
Electricity Generating Holding Public Company
Limited
- Accountant Level 10, Chief-Financial Analysis
and Budgeting Group, Domestic Power Purchase
Division, EGAT
Education / Training
- Master of Public and Private Management, The
National Institute of Development Administration
- Bachelor of Political Sciences (Public
Administration), Thammasat University
- Certificate, ASEAN Executive Program, General
Electric International Operation Company, Inc.,
U.S.A.
- Certificate, Senior Executive Program, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
- Certificate, Advanced Mini MBA,
Chulalongkorn University
Working Experiences
Current
Assistant Managing Director -Administration,
Ratchaburi Electricity Generating Holding Public
Company Limited
Other Current Position Related to the
Company’s Business
- Director, Ratchaburi Gas Company Limited
- Director, Ratch Udom Power Company Limited
Previous
- Director, General Administration Division,
Ratchaburi Electricity Generating Holding
Public Company Limited
- Director, Ratchaburi Power Plant Communication
Center
- Chief-Procurement and General Services
Department, Demand Side Management and
Planning Division, EGAT
Education / Training - Master of Engineering (Electrical Engineering),
Chulalongkorn University
- Bachelor of Science (Electrical Engineering)
(2nd Class Honor), King Mongkut’s Institute of
Technology North Bangkok Campus
- Certificate, ASEAN Executive Program, General
Electric International Operation Company,
Inc., U.S.A.
- Certificate, Senior Executive Program, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
- Certificate, Advanced Mini MBA, Chulalongkorn
University
Working Experiences
Current
- Assistant Managing Director, seconded to be
the Deputy Managing Director of the Ratchaburi
Electricity Generating Company Limited
Previous
- Director, Operating Division, Ratchaburi Electricity
Generating Company Limited
- Chief, Plant Maintenance Department Wang-
Noi Power Plant, EGAT
- The Cogen (SPP) Operation Project Team Leader,
EGAT
8
7
6
Mr. Somnuk Jindasup Assistant Managing Director, seconded
to be the Deputy Managing Director of
the Ratchaburi Electricity Generating
Company Limited
Age 48
Mr. Prayut Thongsuwan Assistant Managing Director-Administration
Age 48
021A n n u a l R e p o r t 2 0 0 6
021A n n u a l R e p o r t 2 0 0 6
9
10 Education / Training
- Master of Management, Asian Institute of
Management (AIM), Philippines
- Bachelor of Arts-Accounting,
Thammasat University
- Certificate Program, Chief Financial Officer (CFO),
Federation of Accounting Professions
- Certificate, ASEAN Executive Development
Program, Business School, Thammasart University
- Certificate, The Job of the Chief Financial Officer,
New York Salomon Center & Singapore Institute
of Management, Singapore
- Certificate, Managerial Skills Enhancement, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
Working Experiences
Current
- Senior Director, Portfolio Management Division,
Ratchaburi Electricity Generating Holding Public
Company Limited
Previous
- Senior Director, Finance Division, Ratchaburi
Electricity Generating Holding Public Company
Limited
- Senior Director, seconded to be the Director-
Finance & Accounting of the Tri Energy Company
Limited
- Vice President level 11 Banpu Public Company
Limited Group, seconded to be the Director–
Finance and Accounting, Tri Energy Company
Limited
- Senior Manager–Investment Division, Banpu
Public Company Limited
- Senior Manager–Finance Division, Banpu Public
Company Limited
Education / Training
- Master Degree in Management, SASIN Graduate
Institute of Business Administration,
Chulalongkorn University
- Master of Engineering (Electrical Engineering),
Chulalongkorn University
- Bachelor of Engineering (Electrical Engineering)
(2nd Class Honor), Kasetsart University
Working Experiences
Current
- Assistant Managing Director, seconded to be
the President of the Tri Energy Company Limited
Previous
- Senior Director, Ratchaburi Electricity Generating
Holding Public Company Limited, seconded to be
the President of Tri Energy Company Limited
- Senior Vice President Level 12, Banpu Public
Company Limited Group, seconded to be the
President of the Tri Energy Company Limited
- Vice President Level 11, Banpu Public Company
Limited Group, seconded to be the Operations
Director of the Tri Energy Company Limited
- Assistance Vice President of Business Development–
Power, Banpu Public Company Limited
11 Mrs. Darunee Abhinoraseth Senior Director, seconded to be
the Chief Financial Officer, Ratchaburi Power
Company Limited
Age 56
Education / Training
- Master of Business Administration (Executive),
SASIN Graduate Institute of Business Administration,
Chulalongkorn University
- Bachelor of Accountancy (2nd Class Honor),
Chulalongkorn University
- Certificate, Certified Investment and Securities
Analysts (CISA) Level1 (Academic Year 2002),
Securities Analysts Association
- Certificate, Senior Executive Program, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
- Certificate Program, Chief Financial Officer (CFO),
Federation of Accounting Professions
Working Experiences
Current
- Senior Director, seconded to be the Chief
Financial Officer of the Ratchaburi Power
Company Limited
Previous
- Director, Accounting Division, Ratchaburi
Electricity Generating Holding Public Company
Limited
- Director, Finance Division, Ratchaburi Electricity
Generating Holding Public Company Limited
- Assistant Director, Portfolio Management
Division, EGAT
Mr. Ni – run Wongchanglor Senior Director,
Portfolio Management Division
Age 46
Mr. Vatchara Noomahan Assistant Managing Director, seconded
to be the President of the Tri Energy
Company Limited
Age 54
022Ratchaburi Electricity Generating Holding Public Company Limited
022Ratchaburi Electricity Generating Holding Public Company Limited
12 Mr. Suchart Avusosakul
Director, Accounting Division
Age 55
Education / Training
- Bachelor of Accountancy,
Chulalongkorn University
- Bachelor of Law, Sukhothai Thammathirat Open
University
- Certificate, Senior Executive Program, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
Working Experiences
Current
- Director, Accounting Division, Ratchaburi
Electricity Generating Holding Public Company
Limited
Other Current Position Related to the
Company’s Business
- Director, Ratchaburi Energy Company Limited
Previous
- Director, Accounting and Finance Division,
Ratchaburi Electricity Generating Company
Limited
- Chief, Operative and Hydro Plant Audit
Department, EGAT
- Chief, Generation and Transmission System
Business Audit Department, EGAT
13 Mr. Thoedpan Indramaha
Director, Internal Audit Division
Age 51
Education / Training
- Bachelor of Accountancy,
Chulalongkorn University
- Certificate, Senior Executive Program, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
Working Experiences
Current
- Director, Internal Audit Division, Ratchaburi
Electricity Generating Holding Public Company
Limited
Previous
- Chief-Computer Audit Department, Internal
Audit Division, EGAT
14 Ms. Raywadee Srikongyos
Director, General Administration Division
Age 48
Education / Training
- Bachelor of Administration (1st Class Honor),
University of Thai Chamber of Commerce
- Certificate, Mini MBA, Thammasat University
- Certificate, Fixed Income Primer Program,
Lehman Brothers, U.S.A.
Working Experiences
Current
- Director, General Administration Division,
Ratchaburi Electricity Generating Holding Public
Company Limited
Previous
- Manager, Compliance Department, Ratchaburi
Electricity Generating Holding Public Company
Limited
- Manager, Financial Planning and Management
Department, Ratchaburi Electricity Generating
Holding Public Company Limited
- Administrative officer Level 9, Cash Management
and Loans Division, Treasury Department, EGAT
023A n n u a l R e p o r t 2 0 0 6
023A n n u a l R e p o r t 2 0 0 6
15 Mr. Nawapol Disathien
Director, Legal Division
Age 36
Education / Training
- Master of Laws in International Legal Studies,
Golden Gate University School of Law, U.S.A.
- Bachelor of Laws, Thammasat University
- Certificate, Public Law, Thammasat University
- Certificate, Senior Executive Program, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
Working Experiences
Current
- Director, Legal Division, Ratchaburi Electricity
Generating Holding Public Company Limited
Previous
- Manager, Legal Department,
Ratchaburi Electricity Generating Holding Public
Company Limited
- Legal Counsel, Siam City Cement Public Company
Limited
- Attorney, Tilleke & Gibbins International Limited
- Manager, Legal Department, Charoen Pokphand
Foods Public Company Limited
16 Mr. Thirapong Subpa-Asa
Power Plant Development Project
in LAO PDR
Age 54
Education / Training
- Master of Engineering (Mechanical Engineering),
Ohio State University, U.S.A.
- Bachelor of Engineering (Mechanical
Engineering), Chulalongkorn University
Working Experiences
Current
- Director, Power Plant Development Project in
LAO PDR, Ratchaburi Electricity Generating
Holding Public Company Limited
Previous
- Engineer 10, Mechanical Maintenance Division,
EGAT
17 Mr. Raluke Satayaporn
Director, seconded to be
the Executive Technical Coordinator,
SouthEast Asia Energy Limited
Age 47
Education / Training
- Master of Engineering (Civil Engineering),
Asian Institute of Technology
- Bachelor of Engineering (Civil Engineering),
Kasetsart University
- Certificate, Senior Executive Program, SASIN
Graduate Institute of Business Administration,
Chulalongkorn University
- Certificate, Professional Engineer Level of the
Engineering Association of Thailand
- Certificate, Project Planning and Control
Working Experiences
Current
- Director, seconded to be the Executive Technical
Coordinator of the SouthEast Asia Energy Limited
Previous
- Director, Engineering and Contract Division,
Ratchaburi Energy Company Limited
- Engineer level 10, Chief of Field Engineering
Project Department, EGAT
- Engineer level 9, Assistant Chief of Designing/
Construction Management Team, EGAT
- Engineer level 9, Hydropower Construction
Division, EGAT
024Ratchaburi Electricity Generating Holding Public Company Limited
024Ratchaburi Electricity Generating Holding Public Company Limited
Brighter Energy from Inspiration
Human resource development is crucial to drive the entire
organization into the right direction.
Good Corporate Governance is the principle for
strengthening people’s capability and state-of-the-art
technology, which inspire us to move towards our goal.
025A n n u a l R e p o r t 2 0 0 6
025A n n u a l R e p o r t 2 0 0 6
Remuneration for the Companyûs Directors and Executives
Monetary Remuneration Significant Criteria 1. A director’s bonus was allocated in accordance with the period that the director was in office. In case a director
holding directorship in the Company and other subsidiaries simultaneously for a period of time, the director
shall receive a bonus only from the company that allocated a higher bonus payment for the particular period.
2. An director who is the Company’s executive did not receive meeting allowance but was entitled to receive
a bonus as a director of the Company.
3. The meeting allowances were paid to the Board of Directors, the Audit Committee, the Human Resources
and Remuneration Committee, and the Risk Management Committee.
1) Ratchaburi Electricity Generating Holding Public Company Limited
1.1 Remuneration for the Board of Directors
Note : The Board of Directors consists of 13 members 1/ In the year 2006, 5 new directors were appointed to the Board. - Mr. Panich Pongpirodom was appointed on 1 May 2006. - Mr. Pongpayom Vasaputi, Mr. Lae Dilokvidhyarat, Ms. Sutharat Angchanpen and Mr. Vinit Tangnoi were appointed on 1 December 2006. 2/ In the year 2006, 5 directors were resigned from the Board. - Mr. Viroj Klangboonkrong was resigned on 1 May 2006. - Mr. Kumphuy Jirararuensak and Mr. Boonchoo Direksathapon were resigned on 1 October 2006. - Mr. Sujarit Patchimnun and Mr. Pala Sookawesh were resigned on 15 November 2006. 3/ In the year 2005, 1 director was appointed to the Board. - Mr. Narong Sitasuwan was appointed on 1 October 2005 and was appointed Managing Director on 21 April 2006. 4/ In 2005, 1 director was resigned from the Board. - Mr. Narongsak Vichetpan was resigned from the Board on 1 October 2005. 5/ Bonus for the directors in 2005 were paid in April 2006 complying with the resolution of the Shareholders’ Annual General Meeting on April 20, 2006. 6/ Chairman of the Board and Chairman of the Human Resources and Remuneration Committee 7/ Chairman of the Audit Committee 8/ Chairman of the Risk Management Committee 9/ Audit Committee 10/ Human Resources and Remuneration Committee 11/ Risk Management Committee 12/ Independent Directors
1 Mr. Cherdpong Siriwit 6/, 12/ 12 720,000.00 12 1,250,000.00 1,970,000.00
2 Mr. Areepong Bhoocha-oom 9/, 10/, 12/ 12 686,000.00 12 1,000,000.00 1,686,000.00
3 Mr. Viroj Klangboonkrong 2/, 11/, 12/ 4 208,000.00 12 1,000,000.00 1,208,000.00
4 Mr. Sujarit Patchimnun 2/ 10.5 394,000.00 12 1,000,000.00 1,394,000.00
5 Mr. Pala Sookawesh 2/ 10.5 384,000.00 12 1,000,000.00 1,384,000.00
6 Mr. Suchart Thada-Thamrongvech 7/, 12/ 12 624,000.00 12 1,000,000.00 1,642,000.00
7 Mr. Viravat Chlayon 8/, 9/, 12/ 12 690,000.00 12 1,000,000.00 1,690,000.00
8 Mr. Kumphuy Jirararuensak 2/, 10/ 9 408,000.00 12 1,000,000.00 1,408,000.00
9 Mr. Narongsak Vichetpan 4/ - - 9 750,000.00 750,000.00
10 Mr. Chanin Vongkusolkit 12 450,000.00 12 1,000,000.00 1,450,000.00
11 Mr. Chulasingh Vasantasingh 12 460,000.00 12 1,000,000.00 1,460,000.00
12 Mr. Kraisi Karnasuta 12 470,000.00 12 1,000,000.00 1,470,000.00
13 Mr. Boonchoo Direksathapon 2/, 11/ 9 268,000.00 12 1,000,000.00 1,268,000.00
14 Mr. Panich Pongpirodom 1/ 8 368,000.00 - - 368,000.00
15 Mr. Pongpayom Vasaputi 1/ 1 40,000.00 - - 40,000.00
16 Mr. Lae Dilokvidhyarat 1/ 1 30,000.00 - - 30,000.00
17 Ms. Sutharat Angchanpen 1/, 11/ 1 40,000.00 - - 40,000.00
18 Mr. Vinit Tangnoi 1/, 10/ 1 30,000.00 - - 30,000.00
19 Mr. Narong Sitasuwan 3/ 12 130,000.00 3 250,000.00 380,000.00
6,400,000.00 13,250,000.00 19,650,000.00
Holding Holding No. Names
Period of Meeting Period of Bonus 5/ Total
2006 Allowance 2005 Remuneration (months) (months)
Unit : Baht
RATCH2006
Directors & Executives’Remuneration
026Ratchaburi Electricity Generating Holding Public Company Limited
026Ratchaburi Electricity Generating Holding Public Company Limited
1.2 Remuneration of the Company’s Executives
Unit : Million Baht
Salary 15 1/ 31 . 437
Bonus 14 15 . 060
Provident Fund 15 1/ 1 . 572
Total 48 . 069
Remuneration Number of persons Amount
2. Ratchaburi Electricity Generating Company Limited
1/ The Board of Directors consisted of 9 members. During the year, there were directors resigned and appointed on various occasions. 2/ There were 6 executives including assignment from Ratchaburi Electricity Generating Holding Public Company Limited, and during the year, there was rotation among executives in the Company’ s group.
3. Ratchaburi Energy Company Limited
1/ The Board of Directors consisted of 4 members. During the year, there was a restructuring in the company’s organization and its management. The executives from the Ratchaburi Electricity Generating Holding Public Company Limited Group were appointed as directors and did not receive remuneration since 22 March 2006. 2/ There were 3 executives. During the year, there was a restructuring in the organization and its management. The executives were appointed by the Ratchaburi Electricity Generating Holding Public Company Limited’s Group and have not received remuneration since 1 March 2006. 4) Ratchaburi Gas Company Limited, Ratch Udom Power Company Limited, and Ratchaburi Alliances Company Limited The Directors and executives of these companies have not receive remuneration because they were
appointed from the executives of Ratchaburi Electricity Generating Public Company Limited’s Group.
1/ The Company had 17 executives and during the year, 1 executive was retired and 2 executives were assigned as the secondment in Ratchaburi Electricity Generating Company Limited.
Unit : Million Baht
2.1 Board of Directors
Meeting Allowance 12 1/ 2 . 773
Bonus 8 1/ 6 . 472
Total 9 . 245
2.2 Executives
Salary 7 2/ 12 . 896
Bonus 6 5 . 761
Provident Fund 7 2/ 0 . 645
Total 19 . 302
Remuneration Number of persons Amount
Unit : Million Baht
3.1 Board of Directors
Meeting Allowance 6 1/ 0 . 376
Bonus - -
Total 0 . 376
3.2 Executives
Salary 10 2/ 1 . 053
Bonus - -
Provident Fund 10 2/ 0 . 053
Total 3 . 231
Remuneration Number of persons Amount
027A n n u a l R e p o r t 2 0 0 6
027A n n u a l R e p o r t 2 0 0 6
Ratc
habu
ri El
ectricity
Gen
erat
ing
Holding
Public C
ompa
ny L
imite
dûs
and
the
Gro
uped
Com
panies
û Sec
uriti
es h
eld
by the
Dire
ctor
s an
d th
e Ex
ecut
ives
of th
e Com
pany
as
at D
ecem
ber 31
, 20
06
RATC
H
Subs
idia
ries
Jo
int ve
ntur
es
Nam
e Po
sitio
n
Com
mon
Sha
re(1
) RG
RG
AS
RUDP
RA
RE
TECO
RPCL
Siam
Eth
anol
CRE
SCO
SEAN
Ye
ar
Year
In
crea
sed/
Com
mon
Deb
entu
re 1
/200
5(3.1
) Deb
entu
re 1
/200
5(3.2)
Com
mon
Com
mon
Com
mon
Com
mon
Com
mon
Com
mon
Com
mon
Com
mon
Com
mon
2005
20
06
(Dec
reas
ed)
Shar
e(2)
Ser
ies
1
Serie
s 2
Sha
re(2
) S
hare
(2)
Shar
e(2)
Shar
e(2)
Shar
e(2)
Shar
e(2)
Shar
e(2)
Shar
e(2)
Shar
e(2)
(U
nit)
(U
nit)
1
Mr.
Ch
erd
po
ng
Si
riw
it
Ch
airm
an
_ _
_ _
_ _
_ _
_ _
_ _
_ _
_
2
Mr.
Pan
ich
Po
ng
pir
od
om
D
irec
tor
N/A
(5)
_ _
_ _
_ _
_ _
_ _
_ _
_ _
3
Mr.
Pon
gp
ayo
me
Vas
apu
ti
Dir
ecto
r N
/A(5
) _
_ _
_ _
_ _
_ _
_ _
_ _
_
4
Mr.
Lae
Dilo
kvid
hya
rat
Dir
ecto
r N
/A(5
) _
_ _
_ _
_ _
_ _
_ _
_ _
_
5
Mr.
Such
art
Thad
a-Th
amro
ngve
ch
Dir
ecto
r _
_ _
_ _
_ _
_ _
_ _
_ _
_ _
6
Mr.
Kra
isi
Kar
nas
uta
D
irec
tor
12,7
00
12,7
00
_ _
_ _
_ _
_ _
_ _
_ _
_
7
Mr.
Vir
avat
Ch
layo
n
Dir
ecto
r 8,
500
8,50
0 _
_ _
_ _
_ _
_ _
_ _
_ _
8
Ms.
Suth
arat
An
gch
anp
en
Dir
ecto
r N
/A(5
) 8,
200
_ _
_ _
_ _
_ _
_ _
_ _
_
9
Mr.
Vin
it T
ang
no
i
Dir
ecto
r N
/A(5
) 7,
500
_ _
_ _
_ _
_ _
_ _
_ _
_
10
Mr.
Are
epo
ng
Bh
oo
cha-
oo
m
Dir
ecto
r 10
,000
10
,000
_
_ _
_ _
_ _
1 _
_ _
_ _
11
Mr.
Ch
anin
Vo
ng
kuso
lkit
D
irec
tor
_ _
_ _
_ _
_ _
_ _
_ _
_ _
_
12
Mr.
Ch
ula
sin
gh
Vas
anta
sin
gh
D
irec
tor
_ _
_ _
2,00
0 _
_ _
_ _
_ _
_ _
_
13
Mr.
Nar
on
g S
itas
uw
an
Man
agin
g D
irec
tor
50,0
00
120,
000
70,0
00
_ _
_ _
_ _
_ _
_ _
_ _
14
Mr.T
haw
at V
imo
lsar
awo
ng
D
epu
ty M
anag
ing
Dir
ecto
r -
Bu
sin
ess
Ven
ture
s 7,
938
7,93
8 _
_ _
_ 1
1 1
_ _
_ _
1 _
15
Ms.
Vaja
na
An
gsu
kom
utk
ul
Dep
uty
Man
agin
g D
irec
tor -
Acc
ou
nti
ng
an
d F
inan
ce
1,00
0 1,
000
_ _
_ _
1 1
1 1
_ _
_ _
_
16
Mr.
Prac
hu
ab U
jjin
D
epu
ty M
anag
ing
Dir
ecto
r as
the
Man
agin
g D
irec
tor o
f RG
N
/A(5
) 43
,500
_
1 _
_ 1
_ _
1
1
17
Mr.
Peer
awat
Pu
mth
on
g
Ass
ista
nt
Man
agin
g D
irec
tor-
Bu
sin
ess
Ven
ture
s
18
Mrs
. Aru
nee
Ro
jan
apen
kul
Ass
ista
nt
Man
agin
g D
irec
tor-
Acc
ou
nti
ng
an
d F
inan
ce a
nd
Act
ing
Dir
ecto
r - F
inan
ce D
ivis
ion
_
_ _
1 _
_ _
1 1
_ _
_ _
1 _
19
Mr.
Pray
ut
Th
on
gsu
wan
A
ssis
tan
t M
anag
ing
Dir
ecto
r-
Ad
min
istr
atio
n
_ 8,
000
8,00
0 1
_ _
_ 1
1 _
_ _
_ 1
_
20
Mr.
Som
nu
k J
ind
asu
p
Ass
ista
nt
Man
agin
g D
irec
tor a
s
Dep
uty
Man
agin
g D
irec
tor o
f RG
N
/A(5
) 7,
300
_ _
_ _
_ _
_ _
_
21
Mr.
Vatc
har
a N
oo
mah
an
Ass
ista
nt
Man
agin
g D
irec
tor a
s
Pres
iden
t o
f TEC
O
_ _
_ _
_ _
_ _
_ _
_ _
_ _
_
22
Mr.
Such
art
Avu
sosa
kul
Dir
ecto
r - A
cco
un
tin
g D
ivis
ion
N
/A(5
) 20
,000
_
1 _
_ _
_ _
_
_
Th
e Sh
areh
old
ing
s o
f th
e D
irec
tors
an
d t
he
Exec
uti
ves
that
res
ign
ed fr
om
his
/her
po
sito
n d
uri
ng
th
e Ye
ar 2
00
6(4
)
1
Mr.
Suja
rit
Pat
chim
nu
n
Dir
ecto
r _
_ _
_ _
_ _
_ _
_ _
_ _
_ _
2
Mr.
Vir
oj
Kla
ng
bo
on
kro
ng
D
irec
tor
_ 35
,000
35
,000
_
_ _
_ _
_ _
_ _
_ _
_
3
Mr.
Pala
So
oka
wes
h
Dir
ecto
r _
_ _
_ _
_ _
_ _
_ _
_ _
_ _
4
Mr.
Kam
ph
uy
Jir
arar
uen
sak
Dir
ecto
r 21
,719
21
,719
_
_ _
_ _
_ _
_ _
_ _
_ _
5
Mr.
Bo
on
cho
o D
irek
sath
apo
n
Dir
ecto
r 69
,576
69
,576
_
1 _
_ 1
1 1
1 _
_ _
_ _
Uni
t : S
hare
No
te
(1)
The
num
bers
of R
ATC
H s
hare
s he
ld b
y th
e D
irec
tors
and
the
Exe
cuti
ves
of t
he C
ompa
ny h
as in
clud
ed t
hose
hel
d by
the
ir s
pous
e an
d th
eir
min
or c
hild
ren
(in a
ccor
danc
e w
ith
the
SEC
reg
ulat
ion
No.
Sor
jor
14/2
540)
. The
tab
le s
how
s th
e se
curi
ties
tha
t he
ld b
y D
irec
tors
, Man
agin
g D
irec
tor,
all E
xecu
tive
s in
the
1st
to 4
th ra
nk in
pos
itio
n fr
om M
anag
ing
Dir
ecto
r, an
d th
e D
ivis
ion
Dir
ecto
r of A
ccou
ntin
g an
d Fi
nanc
e (in
acc
orda
nce
wit
h th
e SE
C re
gula
tion
No.
Gor
jor 4
4/25
43).
(2
) Th
e nu
mbe
rs o
f the
deb
entu
res
and
com
mon
sha
res
of th
e af
filia
ted
com
pani
es’s
held
by
the
Dir
ecto
rs a
nd th
e Ex
ecut
ives
of t
he C
ompa
ny re
pres
ent o
nly
the
part
that
hel
d by
eac
h D
irec
tor a
nd th
e Ex
ecut
ive
sole
ly (i
n ac
cord
ance
wit
h th
e Pu
blic
Com
pany
Lim
ited
Act
, Sec
tion
88
(2))
.
(3
) Th
e nu
mbe
rs o
f Rat
chab
uri E
lect
rici
ty G
ener
atin
g C
ompa
ny L
imite
d de
bent
ure
1/20
05 in
this
tabl
e re
pres
ent t
he d
eben
ture
hol
ding
s of
eac
h D
irec
tor a
nd E
xecu
tive
sol
ely.
(3.1
) Ra
tcha
buri
Ele
ctri
city
Gen
erat
ing
Com
pany
Lim
ited
debe
ntur
e 1/
2005
Ser
ies
1: 3
yea
rs , i
ssue
d Ju
ly 2
9, 2
005
at th
e va
lue
of B
aht 1
,000
per
uni
t
(3.2
) Ra
tcha
buri
Ele
ctri
city
Gen
erat
ing
Com
pany
Lim
ited
debe
ntur
e 1/
2005
Ser
ies
2: 5
yea
rs, i
ssue
d Ju
ly 2
9, 2
005
at th
e va
lue
of B
aht 1
,000
per
uni
t
(4
) Th
e Sh
areh
oldi
ngs
of th
e D
irec
tors
and
the
Exec
utiv
es th
at re
sign
ed fr
om h
is/h
er p
osito
n du
ring
the
Year
200
5 re
pres
ents
the
num
ber o
f sec
urit
ies
held
by
that
per
son
unti
l the
dat
e of
his
/her
reti
rem
ent o
r res
igna
tion
from
the
Com
pany
.
(5
) N
/A =
No
info
rmat
ion
of s
hare
hel
d by
that
dir
ecto
r or e
xecu
tive
in 2
005
due
to th
e fa
ct th
at s
uch
dire
ctor
or e
xecu
tive
was
app
oint
ed to
his
/her
pos
itio
n in
200
6
The
Ab
bre
via
tio
ns
of C
om
pa
nie
s’s
Na
mes
EG
AT =
Ele
ctri
city
Gen
erat
ing
Aut
hori
ty o
f Tha
iland
RA
TCH
= R
atch
abur
i Ele
ctri
city
Gen
erat
ing
Hol
ding
PC
L. -
RG =
Rat
chbu
ri E
lect
rici
ty G
ener
atin
g C
o.,L
td. -
RG
AS
= R
atch
abur
i Gas
Co.
,Ltd
. - R
UD
P =
Rat
ch U
dom
Pow
er C
o.,L
td. -
RA
= R
atch
Alli
ance
s C
o.,L
td. -
RE
= R
atch
abur
i Ene
rgy
Co.
,Ltd
. - T
ECO
= T
ri E
nerg
y C
o.,L
td. -
RPC
L =
Rat
chab
uri P
ower
Co.
,Ltd
. - S
iam
Eth
anol
= S
iam
Eth
anol
Exp
orts
Co.
,Ltd
. - C
RESC
O =
Chu
bu R
atch
abur
i
El
ectr
ic S
ervi
ces
Co.
,Ltd
. - S
EAN
= S
outh
East
Asi
a En
ergy
Ltd
.
Ch
an
ges
of D
irec
tor/
Exec
uti
ve P
osi
tio
ns
Du
rin
g th
e Ye
ar
2006
N
o. 2
M
r. Pa
nich
Pon
gpir
odom
was
ass
igne
d to
be
the
Com
pany
’s D
irec
tor i
n pl
ace
of M
r. Vi
roj K
lang
boon
kron
g, w
ho re
sign
ed b
y hi
s re
tire
men
t fro
m E
GAT
, eff
ecti
ve fr
om M
ay 1
, 200
6 on
war
ds (b
y th
e re
solu
tion
of t
he B
oard
of D
irec
tors
Mee
ting
No.
4/2
006
date
d A
pril
21, 2
006)
.
N
o. 3
M
r. Po
ngpa
yom
e Va
sapu
ti w
as a
ssig
ned
to b
e th
e C
ompa
ny’s
Dir
ecto
r in
plac
e of
Mr.
Suja
rit P
ajch
imnu
n, w
ho re
sign
ed b
y hi
s re
tire
men
t fro
m h
is p
osito
n in
EG
AT’s
Boar
d , e
ffec
tive
from
Nov
embe
r 29,
200
6 on
war
ds (b
y th
e re
solu
tion
of t
he B
oard
of D
irec
tors
Mee
ting
No.
12/
2006
dat
ed N
ovem
ber 2
9, 2
006)
.
N
o. 4
M
r, La
e D
ilokv
idha
yara
t was
ass
igne
d to
be
the
Com
pany
’s D
irec
tor i
n pl
ace
of M
r. Pa
la S
ooka
wes
h , w
ho re
sign
ed b
y hi
s re
tire
men
t fro
m h
is p
osito
n in
EG
AT’s
Boar
d , e
ffec
tive
from
Nov
embe
r 29,
200
6 on
war
ds (b
y th
e re
solu
tion
of t
he B
oard
of D
irec
tors
Mee
ting
No.
12/
2006
dat
ed N
ovem
ber 2
9, 2
006)
.
N
o. 8
M
iss
Suth
arat
Ang
chan
pen
was
ass
igne
d to
be
the
Com
pany
’s D
irec
tor i
n pl
ace
of M
r. Ka
mph
uy J
irara
ruen
sak,
who
resi
gned
by
his
reti
rem
ent f
rom
EG
AT, e
ffec
tive
from
Nov
embe
r 29,
200
6 on
war
ds (b
y th
e re
solu
tion
of t
he B
oard
of D
irec
tors
Mee
ting
No.
12/
2006
dat
ed N
ovem
ber 2
9, 2
006)
.
N
o. 9
M
r. Vi
nit T
angn
oi w
as a
ssig
ned
to b
e th
e C
ompa
ny’s
Dir
ecto
r in
plac
e of
Mr.
Boon
choo
Dir
eksa
thap
on, w
ho re
sign
ed b
y hi
s re
tire
men
t fro
m E
GAT
, eff
ecti
ve fr
om N
ovem
ber 2
9, 2
006
onw
ards
(by
the
reso
luti
on o
f the
Boa
rd o
f Dir
ecto
rs M
eeti
ng N
o. 1
2/20
06 d
ated
Nov
embe
r 29,
200
6).
N
o. 1
1 M
r. C
hani
n Vo
ngku
solk
it is
the
Dir
ecto
r tha
t had
bee
n ap
poin
ted
by B
anpu
PLC
., w
hich
hol
ds 1
4.99
% o
f RAT
CH
sha
res.
He
also
has
his
pos
itio
n as
the
Chi
ef E
xecu
tive
Off
icer
at B
anpu
PLC
.
N
o. 1
3 M
r. N
aron
g Si
tasu
wan
was
ass
igne
d to
be
the
Man
agin
g D
irec
tor o
f RAT
CH
in p
lace
of M
r. Bo
onch
oo D
irek
sath
apon
who
reac
hed
his
age
reti
rem
ent f
rom
the
Com
pany
, eff
ecti
ve fr
om A
pril
21, 2
006
onw
ards
(by
the
reso
luti
on o
f the
Boa
rd o
f Dir
ecto
rs M
eeti
ng N
o. 4
/200
6 da
ted
Apr
il 21
, 200
6)
028Ratchaburi Electricity Generating Holding Public Company Limited
028Ratchaburi Electricity Generating Holding Public Company Limited
Caring and Developing ENVIRONMENT
Environment and community are our key area of concerns.
We believe that to successfully grow a business, we need
cooperation from community and good environment.
We, with our intention to contribute to community and
environmental development, are involed with many
community projects, such as Ratchaburi Power Plant’s
Community Development Project which was initiated
to enable community self-sustainability leading to greater
community’s cooperation with the Power Plant
for better environment.
029A n n u a l R e p o r t 2 0 0 6
029A n n u a l R e p o r t 2 0 0 6
Organization Chart
Board of Directors
Human Resources and Remuneration Committee
Deputy Managing Director-Business Ventures
Power Plant Development
Project in LAO PDR
Portfolio Management
Division
Assistant Managing Director-Business Ventures
Deputy Managing Director-Accounting and Finance
Assistant Managing Director-Accounting and Finance
Investment Assessment Department
Strategic Planning Department
Corporate Investment Analysis
Department
Engineering and Energy Technology
Department
Business Development
Division
Accounting Division
General Accounting Department
Management Accounting and
Budgeting Department
Investor Relations Department
Affiliates Accounting and Tax Management
Department
Finance Division
Treasury Department
Financial Planning and Management Department
Compliance Department
RATCH2006
Organization Chart
Risk Management Committee
Managing Director
Corporate Secretary Department
030Ratchaburi Electricity Generating Holding Public Company Limited
Audit Committee
Internal Audit Division
Internal Audit Department Risk Management Department
Group Company Management
Ratchaburi Electricity Generating Company Limited
ë Deputy Managing Director seconded to be the Managing
Director
ë Assistance Managing Director seconded to be the Deputy
Managing Director
Tri Energy Company Limited
ë Assistance Managing Director seconded to be the President
ë Senior Manager seconded to be the Director-Finance & Accounting
Ratchaburi Power Company Limited
ë Senior Director seconded to be the Chief Finance Officer
SouthEast Asia Energy Limited
ë Director seconded to be the Executive Technical Coordinator
ë Manager seconded to be the Financial Manager
As of 31 December 2006
Assistant Managing Director-Administration
General Administration Division
Procurement and Service Department
Information System Development Department
Human Resource Department
Public Relations Department
Computer and Network Operations
Department
Legal Division
031A n n u a l R e p o r t 2 0 0 6
Board of Directors At present, the Company’s Board of Directors consists of 13 members, whose names are listed as follows.
No. Directorûs Name Position
1. Mr. Cherdpong Siriwit - Chairman (Independent Director)
Second-term Director - Chairman of the Human Resources and
Remuneration Committee
2. Mr. Viravat Chlayon - Independent Director
Second-term Director - Chairman of the Risk Management Committee
- Member of the Audit Committee
3. Mr. Pongpayome Vasaputi - Director
First-term Director
4. Mr. Lae Dilokvidhyarat - Director
First-term Director
5. Mr. Chulasingh Vasantasingh - Director
Second-term Director
6. Mr. Panich Pongpirodom - Independent Director
First-term Director - Member of the Risk Management Committee
7. Mr. Suchart Thada-Thamrongvech - Independent Director
Second-term Director - Chairman of the Audit Committee
8. Mr. Kraisi Karnasuta - Director
Second-term Director
9. Ms. Sutharat Angchanpen - Director
First-term Director - Member of the Risk Management Committee
10. Mr. Vinit Tangnoi - Director
First-term Director - Member of the Human Resources and Remuneration
Committee
11. Mr. Chanin Vongkusolkit - Director
Second-term Director
12. Mr. Areepong Bhoocha-oom - Independent Director
Third-term Director - Member of the Audit Committee
- Member of the Human Resources and Remuneration
Committee
13. Mr. Narong Sitasuwan - Director
Second-term Director - Managing Director
- Secretary to the Board of Directors
Management Structure
RATCH2006
Management Structure
032Ratchaburi Electricity Generating Holding Public Company Limited
032Ratchaburi Electricity Generating Holding Public Company Limited
According to the Company’s Articles of Association, the Board of Directors and terms of their members shall be as
follows.
- The number of Directors shall be no less than 7 but not exceeding 13.
- No more than one-third of all Directors shall be Executive Directors.
- No less than one-third of all Directors shall be Independent Directors, with a minimum number of 3
Independent Directors.
- Chairman of the Board shall be a Non-Executive Director and not the same person as the Managing
Director. The Board of Directors shall appoint the Chairman from Directors.
- Directors shall be appointed by the Annual General Shareholders’ Meeting (AGM). At every AGM,
one-third of the Directors shall retire from office. Directors with the longest stay in office shall retire.
A retiring Director by a rotation of office may be re-elected.
- In case any Director resigns by reasons other than a rotation of office, the Board of Directors shall
elect any person to replace the resigned Director. The Director so appointed shall retain his/her office
during such time only as the resigned Director is entitled to retain.
- Directors of the Company shall remain in their offices for no more than 3 consecutive terms and his/
her age shall not exceed 72 years old.
As shareholder’s representatives, the Board of Directors have a fiduciary duty to manage all the Company’s
businesses, formulate and approve policies and operation plans as well as supervise the management’s operations to
ensure the most efficiency, effectiveness and strict compliance with policies, applicable laws, the Articles of Association,
resolutions of the Shareholders’ Meeting, relevant rules and regulations and business ethics that will eventually fulfill the
Company’s objectives.
At present, the Managing Director is appointed as the Board of Directors’ Secretary, and, at the same time “the
Corporate Secretary Department” is set up to handle meetings, administration works and coordination activities of the
Board of Directors.
Independent Director
Independent Director, according to the definition in the Company’s Articles of Incorporation regarding the Board
of Directors, means director who is not a representative of any major shareholders, can undertake his/her duties
independently from any major shareholders, management or any other related persons, is neither top executive,
employee nor consultant receiving salary from the Company, and is not an Executive Director of the Company (at present,
Executive Board of Directors is not yet established), Independence Director shall not hold more than 0.5 percent of paid-
up capital of the Company, its subsidiaries, affiliates, joint ventures or other relevant firms. Independent Director shall be
the one who can take care of all shareholders’ interests on an equal basis, and has no conflicts of interest with the
Company. Each Independent Director shall attend the Board of Directors’ Meeting to make decision in every important
issue. To recruit an Independent Director, the Company follows the nomination procedures in recruiting directors and top
management, the details of which are described in Page 36
Of the 13-member Board of Directors of the Company, 5 of them are Independent Directors based on the
definition described above. Their names are listed as follows:
1. Mr. Cherdpong Siriwit
2. Mr. Suchart Thada-Thamrongvech
033A n n u a l R e p o r t 2 0 0 6
033A n n u a l R e p o r t 2 0 0 6
3. Mr. Viravat Chlayon
4. Mr. Panich Pongpirodom
5. Mr. Areepong Bhoocha-oom
Each Independent Director undertakes his/her duties with independent judgment to ensure that the Company’s
policies, operation plans and actions comply with the laws, the Company’s objects, Articles of Association, and the
resolutions of the Shareholders’ Meeting with an aim to guarantee equal protection to interests of all shareholders.
The Audit Committee
The Audit Committee of the Company consists of 3 Independent Directors appointed by the Board of Directors
based on their expertise, experiences and qualifications, as defined by the regulation of the Stock Exchange of Thailand
(SET). One of the Company’s management acts as the Secretary of the Audit Committee. The names of the committee are
listed as follows.
1. Mr. Suchart Thada-Thamrongvech Chairman of the Audit Committee
2. Mr. Viravat Chlayon Member of the Audit Committee
3. Mr. Areepong Bhoocha-oom Member of the Audit Committee
4. Mr. Thoedpan Indramaha Internal Audit Division Director acting as the Secretary of the
Audit Committee
The Audit Committee performs its tasks, as described in the Company’s Articles of Incorporation approved by the
Board of Directors, in accurately and adequately auditing the Company’s financial statements, in order to make sure that
the Company has an appropriate and effective internal control system. The Audit Committee also has responsibility to
review that the Company complies with the Securities and Exchange Commission Acts and the Stock Exchange of
Thailand’s rules and regulations and other laws relating to the Company’s business. When performing their duties, the
Audit Committee has authority to invite Directors, or employees regardless of their positions to attend the meeting or to
clarify and answer any question relating to the Committee’s duties and responsibilities. The Audit Committee can discuss
with the Company’s expert or consultant (if any) or hire a third-party consultant or specialist if necessary at the
Company’s expense.
The Audit Committee also has a duty to select and propose for the appointment of the auditor of the company
and its subsidiaries and recommend the auditor’s fee for the Board of Director’s concurrence and for the approval from
the Shareholders’ Meeting respectively. Details of the appointment of the auditor and the auditor’s fee are described in
Page 86 The Audit Committee shall review the disclosure of the Company’s information in case there is any connected
transaction or if the transaction may lead to a conflict of interests. The Audit Committee’s report signed by its Chairman
appears in Page 86
The Audit Committee also has a significant role to govern the Internal Audit Division’s operations. The Audit
Committee is required to approve the scope of operation, annual audit plan, budget and personnel recruitment of the
Internal Audit Division. The Committee also reviews the appointment, reshuffle or termination of the Internal Audit
Division Director. The Internal Audit Division’s audit reports and its status of independence are also taken into the
committee’s scrutiny.
In 2006, the Audit Committee held 5 meetings in February, May, July, August and November. All members of the
Audit Committee attended all the 5 meetings except for the meeting in November, where Chairman of the Audit Committee
had to travel overseas and assigned Mr.Viravat Chlayon, member of the Audit Committee, to preside over that meeting.
034Ratchaburi Electricity Generating Holding Public Company Limited
034Ratchaburi Electricity Generating Holding Public Company Limited
The Human Resources and Remuneration Committee
The Human Resources and Remuneration Committee consists of 3 directors who are appointed by the Board of
Directors. One of the Company’s management acts as the Committee’s Secretary. The names of the members are listed as
follows:
1. Mr. Cherdpong Siriwit Chairman of the Human Resources and Remuneration Committee
2. Mr. Vinit Tangnoi Member of the Human Resources and Remuneration Committee
3. Mr. Areepong Bhoocha-oom Member of the Human Resources and Remuneration Committee
4. Ms. Vajana Angsukomutkul Deputy Managing Director-Accounting and Finance, acting as the
Secretary of the Human Resources and Remuneration Committee
The Human Resources and Remuneration Committee’s authorities and responsibilities are defined in the
Company’s Articles of Incorporation, which is approved by the Board of Directors. Its authorities and responsibilities cover
the entire tasks concerning the management of human resources and remuneration of the Board of Directors, Sub-
committees, and top management of the Company. The committee has duty to formulate the Company’s visions and
strategies on human resources management of the Company’s Group as well as their Management Development Plan.
The committee’s responsibilities include the monitoring that the Board of Directors of the Company’s Group has
appropriate size and good components responsively to the changing environment .The Human Resources and
Remuneration Committee is also required to establish the clear, transparent and appropriate policy, criteria, and
procedure in nominating, selecting, removing or terminating Directors and top management of the Company’s Group to
ensure that all companies in the Company’s Group have high qualified management team who have appropriate
competency and experiences to run the Company’s business successfully and effectively.
Moreover, the Human Resources and Remuneration Committee establishes a policy and strategies on
compensation which includes salary, meeting allowance, per diem, bonus and other benefits to Directors and top
management in the Company’s Group before proposing them to the Board of Directors for further approval.
Consideration and approval will be based on clear and transparent criteria in order to induce, retain and motivate high
qualified and high potential human resources. The Human Resources and Remuneration Committee also formulates
effective guidelines, procedures and process for assessing the performance of the Board of Directors and top
management of the Company’s Group against the target mutually agreed in advance each year. These targets shall be
relevant to the Company’s Business Plan and set up in order to review the management’s annual remunerations by taking
duties, responsibilities, related risks and long term values to shareholders into consideration.
When performing their job, the Human Resources and Remuneration Committee are authorized to discuss with the
Company’s specialist or consultant (if any) or hire a third-party consultant or specialist if necessary at the Company’s expense.
In 2006, the Human Resources and Remuneration Committee convened 4 meetings in February, April, November
and December. All members had attended every arranged meeting.
The Risk Management Committee
The Risk Management Committee consists of 3 members appointed by the Board of Directors. One of the Company’s
management acts as its Secretary. The names of the members are listed as follows:
1. Mr. Viravat Chlayon Chairman of the Risk Management Committee
2. Mr. Panich Pongpirodom Member of the Risk Management Committee
3. Ms. Sutharat Angchanpen Member of the Risk Management Committee
4. Mr. Thoedpan Indramaha Internal Audit Division Director acting as the Secretary of the Risk
Management Committee
035A n n u a l R e p o r t 2 0 0 6
035A n n u a l R e p o r t 2 0 0 6
The Risk Management Committee’s authorities and responsibilities are defined in the Company’s Articles of
Incorporation, which is approved by the Board of Directors. The committee shall review the Company’s risk management
policy and framework, which would cover all the major risks; namely, financial risk, investment risk, internal risk and
external risk, before proposing them to the Board of Directors for approval. The committee is also required to establish
risk management strategy and guideline that is in line with the Company’s risk management policy.
The Risk Management Committee has authority to invite Directors, and/or operational employees to discuss,
clarify or answer questions relating to their scope of duties and responsibilities. The committee is able to discuss with the
Company’s specialist or consultant (if any) or hire a third-party advisor or specialist, if necessary, at the Company’s expense.
The Risk Management Committee appoints a Risk Management Working Group as a mechanism to supervise and
monitor the operation. The working group has a duty to pinpoint nature of the risks and risk factors, study and analyze all
internal and external risk factors that may effect the Company’s operation. Moreover, the Risk Management Working Group
has to study and suggest guidelines and, finally, write a risk management report for the Risk Management Committee’s
consideration.
In 2006, the Risk Management Committee convened 3 meetings in January, June and September. All members
had attended every arranged meeting.
Authorized Directors As the Company’s Signatory
According to the Company’s Affidavit, the authorized Directors as the Company’s signatory are the signature of
Mr. Cherdpong Siriwit, Chairman, or Mr. Narong Sitasuwan, Managing Director, with the Company’s Seal; or the joint
signatures of two Directors out of seven Directors namely Mr. Lae Dilokvidhyarat, Mr. Pongpayome Vasaputi, Mr. Vinit
Tangnoi, Ms. Sutharat Angchanpen, Mr. Chulasingh Vasantasingh, Mr. Chanin Vongkusolkit and Mr. Kraisi Karnasuta , with
the Company’s Seal.
Recruitment and Nomination Procedures of Directors and Top Management
To ensure that the Company’s Group have a management team of required qualification, knowledge, competency
and experience, the Human Resources and Remuneration Committee is designated to formulate a clear-cut and
transparent policy, criteria and procedure on human resources and remuneration management for Directors and top
management of the Company’s Group. The Human Resources and Remuneration Committee shall recruit the Directors
and top management of the Company’s Group by reviewing the nominee’s educational background, knowledge, skills
and work experiences, which should benefit their designated missions and the Company’s overall operations.
In addition, to nominate the Company’s Director, consideration must also be made on the basis of necessary
qualifications and skills of an individual to work together as a team. This will be based on a number of factors ranging
from age to specialized skills that help harmonize the Company’s business as well as the dedication and commitment to
devote time and effort as the Director. The ultimate goal is to ensure a strong Board of Directors that can fulfill the
Company’s need at a particular point in time.
The Human Resources and Remuneration Committee shall propose its opinion to the Board of Directors of the
Company’s Group for further appointment of their Directors and top management.
Directors representing major shareholders such as EGAT and Banpu Public Company Limited, that have right to
nominate to the Company’s Board of Directors, have been through the selecting procedure in which background and
qualifications proper and necessary in governing the Company’s businesses are taken into consideration. The Managing
Director and Deputy Managing Director-Business Ventures, who are EGAT’s top management and seconded to work at
the Company, have also through the proper selecting procedure.
036Ratchaburi Electricity Generating Holding Public Company Limited
036Ratchaburi Electricity Generating Holding Public Company Limited
To be the leading ELECTRICITY Company
Ratchaburi Electricity Generating Holding Public Company
Limited is a private company with remarkable capability
and constant growth.
We have hight-standard management, strong partners,
state-of-the-art technology, experienced people and high
recognition in the industry and community.
Today… we are ready to move forward to become the leader
in power generating and development of the region…
We are powering for the future.
037A n n u a l R e p o r t 2 0 0 6
037A n n u a l R e p o r t 2 0 0 6
Share Distribution by Nationality
Top 10 Major Shareholders of Ratchaburi Electricity Generating Holding Public Company Limited, as at September 5, 2006
45.00% The Electricity Generating Authority of Thailand (EGAT)
14.99% BANPU Public Company Limited (Grouped)
4.63% Social Security Office
Source : Thailand Securities Depository Company Limited
2.62% The Govermment
Saving Bank
2.20% CHASE NOMINEES LIMITED (Grouped)
1.97% INVESTORS BANK AND TRUST COMPANY
1.20% AMERICAN INTERNATIONAL ASSURANCE COMPANY (Grouped)
0.84% EGAT Employees Provident Fund
0.74% VAYUPAK FUND
0.72% HSBC (Grouped)
Thai 21,274 1,310,415,325 90.37
Foreign 85 139,584,675 9.63
Total 21,359 1,450,000,000 100.00
Ratchaburi Electricity Generating Holding Public Company Limited specifies the portion of shares held by the foreign shareholders at 25 percent from the total of shares.
Major Shareholders
Top 10 Major Shareholders 1,086,078,957 74.91
Portion of Shares held by Minor
Shareholders 363,921,043 25.09
From the Total Shares of 1,450,000,000 100.00
Shareholders Number of Number of % Shareholders Shares
Shareholders Number of % Shares
RATCH2006
Major Shareholders
038Ratchaburi Electricity Generating Holding Public Company Limited
038Ratchaburi Electricity Generating Holding Public Company Limited
As at September 5, 2006
No. Name Number of Shares %
1 The Electricity Generating Authority of Thailand (EGAT) 652,500,000 45.00
2 BANPU Public Company Limited (Grouped) 217,400,000 14.99
Banpu Public Company Limited 110,300,000
Banpu Power Company Limited 107,100,000
3 Social Security Office 67,179,800 4.63
Social Security Office 66,712,700
Social Security Office by MFC Asset management Public Company Limited 187,900
Social Security Office by Kasikorn Asset Management Company Limited 118,200
Social Security Office by One Asset Management Limited 161,000
4 The Government Savings Bank 38,000,000 2.62
5 CHASE NOMINEES LIMITED (Grouped) 31,849,058 2.20
CHASE C.S. CENTRAL NOMINEES LIMITED 46 137,090
CHASE NOMINEES LIMITED 30,197,100
CHASE NOMINEES LIMITED 1 157,700
CHASE NOMINEES LIMITED 15 263,168
CHASE NOMINEES LIMITED 40 109,400
CHASE NOMINEES LIMITED 46 984,600
6 INVESTORS BANK AND TRUST COMPANY 28,521,599 1.97
7 AMERICAN INTERNATIONAL ASSURANCE COMPANY (Grouped) 17,357,400 1.20
AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED - AIA D-PLUS 3,118,400
AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED-AIA1 3,700,000
AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED-AIA2 3,034,700
AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED-AIA5B 3,304,300
AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED-AIA5E 4,200,000
8 EGAT Employees Provident Fund 12,123,900 0.84
EGAT Employees Provident Fund (Registered) By Siam Commercial Bank Public
Company Limited 7,635,000
EGAT Employees Provident Fund (Registered) By ING Funds (Thailand) Company Limited 4,488,900
9 VAYUPAK FUND 10,762,700 0.74
VAYUPAK FUND 1 by Krung Thai Asset Management Public Company Limited 5,381,350
VAYUPAK FUND 1 by MFC Asset management Public Company Limited 5,381,350
10 HSBC (Grouped) 10,384,500 0.72
HSBC (SINGAPORE) NOMINEES PTE LIMITED 3,494,300
HSBC BANK PLC-CLIENTS GENERAL A/C 5,562,200
HSBC INSTITUTIONAL TRUST SERVICES (ASIA) LIMITED 1,320,000
HSBC INVESTMENTS HOLDINGS (BAHAMAS) LIMITED 8,000
Total of Shares held by top 10 Major Shareholders 1,086,078,957 74.91
Portion of Shares held by Minor Shareholders 363,921,043 25.09
From the Total Shares of 1,450,000,000 100.00
Source : Thailand Securities Depository Company Limited
Note 1. Electricity Generating Authority of Thailand (EGAT) (changed its name form EGAT Public Company Limited) is a state-owned enterprise that operates and co-invests with other parties in electricity power and related business. EGAT is the largest shareholder of the Company, that has 7 representatives in the Company’s 13-member Board of Directors. 2. Banpu Group is a group of Banpu Public Company Limited and its associated company that engageged in core business on coal and electricity power in Thailand and overseas. The Vongkusolkit family and their related companies are its major shareholders. Banpu Public Company Limited has its a representative in the Company’s 13-member Board of Directors. 3. The Government Savings Bank is a legal entity and a state-owned enterprise operating as a financial institute guaranteed by the government. The Bank is under supervision of the Ministry of Finance. Currently, the Bank is a lender of Ratchaburi Electricity Generating Company Limited, which is a subsidiary of the Copany with Baht 2,395 million outstanding debt as of December 31, 2006. 4. Employees’ Provident Fund of EGAT changed its name from Employees’ Provident Fund of EGAT Public Company Limited. The Fund’s Committee is responsible for the fund management policy, comprises representatives from both employers and employees of EGAT, Ratchaburi Electricity Generating Holding Public Company Limited, Ratchaburi Electricity Generating Company Limited, Ratchaburi Energy Company Limited.
Top 10 Major Shareholders
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039A n n u a l R e p o r t 2 0 0 6
Shareholding Structure
RATCH2006
Shareholding Structure
040Ratchaburi Electricity Generating Holding Public Company Limited
Nature of Business
Founded on 7 March 2000, the Company is currently registered with Baht 14,500 million paid-up capital. Its business is
to invest in subsidiaries and joint venture companies as a holding company. At present, the Company owns 99.99 percent
shares of its five subsidiaries; namely, Ratchaburi Electricity Generating Company Limited, Ratchaburi Gas Company Limited,
Ratch Udom Power Company Limited, Ratchaburi Alliances Company Limited and Ratchaburi Energy Company Limited.
Through these subsidaries investments, Ratchaburi Gas Company Limited holds 50 percent of Tri Energy Company Limited’s
shares, while Ratchaburi Alliances Company Limited holds 25 percent of Ratchaburi Power Company Limited, and Ratchaburi
Energy Company Limited holds 15 percent in Siam Ethanol Exports Company Limited. The Company also holds 25 percent of
SouthEast Asia Energy Limited’s shares. SouthEast Asia Energy Limited holds 100 percent of Nam Ngum 2 Power Company
Limited’s shares in order to develop the Nam Ngum 2 Hydro Power Plant Project. In addition, the Company has made direct
investment in 49.99 percent of Chubu Ratchaburi Electric Services Company Limited’s shares. However, its major incomes
come from dividends of its subsidiary; namely, Ratchaburi Electricity Generating Company Limited and Ratchaburi Gas
Company Limited.
The Company has formulated its strategies and business plans that correspond to its development and expansion
goals focusing on investment in the power and other related business where it provides adequate financial support for
investment and actively participating in the formulation and monitoring of the operations of the companies it has invested.
Subsidiaries Ratchaburi Electricity Generating Company Limited
Location : 128 Moo 6, Phikunthong Subdistrict, Mueang District, Ratchaburi, 70000 Thailand
Tel. (66) 2978 5111-9, (66) 3236 5740 ext. 3210 Fax. (66) 2978 5110, (66) 3236 5740 ext. 3204
Nature of business : Electricity generation
Shareholding Equity : 99.99 percent
Registered capital : Baht 18,275 million
Paid registered capital : Baht 18,275 million
Status : Ratchaburi Power Plant comprises of two units of Thermal Power Plant, which generates 735
megawatts each and three blocks of Combined Cycle Power Plant, which generates 725
megawatts each. The total installed capacity of Ratchaburi Power Plant is 3,645 megawatts.
The Company has a 25-year Power Purchase Agreement with the EGAT and the plants have
started commercial operation since October 2000.
Ratchaburi Gas Company Limited
Location : 19 SCB Park Plaza, Tower 3 East, 20th Floor, Ratchadapisek Road, Jatujak, Jatujak, Bangkok 10900
Thailand Tel. (66) 2978 5000 Fax. (66) 2937 9321
Nature of business : Investing in electricity generating business
Shareholding Equity : 99.99 percent
Registered capital : Baht 500 million
Paid registered capital : Baht 500 million
Status : Holds 50 percent stake in Tri Energy Company Limited, where the Company has production
capacity of 350 megawatts in accounts. Ratchaburi Gas Company Limited has 20-year Power
Purchase Agreement with the EGAT and has started commercial operation in July 2000.
Ratch Udom Power Company Limited
Location : 19 SCB Park Plaza, Tower 3 East, 20th Floor, Ratchadapisek Road, Jatujak, Jatujak, Bangkok 10900
Thailand Tel. (66) 2978 5000 Fax. (66) 2937 9321
RATCH2006Nature of Business
0PB 041Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Nature of business : Investing in electricity generating business
Shareholding Equity : 99.99 percent
Registered capital : Baht 420.90 million
Paid registered capital : Baht 420.90 million
Status : Holds 99.99 percent in Ratchaburi Alliances Company Limited’s shares.
Ratchaburi Alliances Company Limited
Location : 19 SCB Park Plaza, Tower 3 East, 20th Floor, Ratchadapisek Road, Jatujak, Jatujak, Bangkok 10900 Thailand Tel. (66) 2978 5000 Fax. (66) 2937 9321
Nature of business : Investing in electricity generating business
Shareholding Equity : 99.99 percent
Registered capital : Baht 420.20 million
Paid registered capital : Baht 420.20 million
Status : Holds 25 percent in Ratchaburi Power Company Limited’s shares, which accounts for 350 megawatts of the Company’s production capacity ratio.
Ratchaburi Energy Company Limited
Location : 19 SCB Park Plaza, Tower 3 East, 21th Floor, Ratchadapisek Road, Jatujak, Jatujak, Bangkok 10900 Thailand Tel. (66) 2978 5200 Fax. (66) 2937 9541
Nature of business : Investing in renewable-energy power generating business and investing in related businesses
Shareholding Equity : 99.99 percent
Registered capital : Baht 140 million
Paid registered capital : Baht 140 million
Status : Holds 15 percent shares in Siam Ethanol Exports Company Limited which operates 95-percent pure alcohol production for export. Besides, Ratchburi Energy Company Limited has developped the Associared Gas Power Plant Project, using the associated gas from Pratu Tao-A oil rig with 1.75 megawatts production capacity.
Joint Venture Companies Tri Energy Company Limited
Location : 1550 Thanaphum Tower, 16th Floor, New Petchburi Road, Makasan, Ratchatavee, Bangkok 10320 Thailand Tel. (66) 2207 0307-14 Fax. (66) 2207 0315-16
Nature of business : Electricity generation
Shareholding Equity : Ratchaburi Gas Company Limited holding 50 percent
Registered capital : Baht 3,423.80 million
Paid registered capital : Baht 3,423.80 million
Status : Located in Ratchaburi province, Tri Energy Power Plant operates one block of Combined-Cycle Power Plant with 700 megawatts production capacity, and has a 20-year Power Purchase Agreement with EGAT. The company started commercial operation in July 2000. Its shareholders are Texaco Thailand Energy Company I and Ratchaburi Gas Company Limited which holds 50 percent of its shares each.
Ratchaburi Power Company Limited
Location : 1828 Sukhumvit Road, Bang Chak, Pra Khanong, Bangkok 10260 Thailand
Tel. 0 2344 5111 Fax. 0 2332 3882
042 043Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
042 043Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Nature of business : Electricity generation
Shareholding Equity : Ratchaburi Alliances Company Limited holding 25 percent
Registered capital : Baht 2,325 million
Paid registered capital : Baht 2,250 million
Status : Ratchaburi Power’s Power Plant is located in the same premise of Ratchaburi Power Plant,
Ratchaburi province. It has a long-term Power Purchase Agreement with EGAT for 25 years.
At present, the company is building two blocks of Combined Cycle Power Plant, which generates
700 megawatts each. The first block is expected to commercially operate in March 2008 and
the second block in June 2008. Ratchaburi Power Company Limited’s shareholders consist of Union
Energy Company Limited which holds 10 percent, Chubu Electric Power Company International
B.V., holds 15 percent, Toyota Tsusho Corporation, holds 10 percent shares, Hong Kong Electric
International Power (Mauritius) Limited, holds 25 percent, and PTT Public Company Limited and
Ratchaburi Alliances Company Limited, holds 15 percent and 25 percent of its shares, respectively.
SouthEast Asia Energy Limited
Location : 587 Viriyathavorn Bldg, 20th Floor, Sutthisarn Vinijchai Road, Din Daeng, Din Daeng, Bangkok
10400 Thailand Tel. (66) 2275 4873 Fax. (66) 2691 8307
Nature of business : Investing in electricity generating business in Lao People’s Democratic Republic (Lao PDR)
Shareholding Equity : The Company’s holding 25 percent
Registered capital : Baht 4,000 million
Paid registered capital : Baht 1,300 million
Status : SouthEast Asia Energy Limited holds 100 percent stake in Nam Ngum 2 Power Company Limited
in Lao PDR. Its total production capacity is 615 megawatts and its production capacity accounts
for 153.75 megawatts of the Company’s total production capacity ratio. SouthEast Asia Energy
Limited has signed a long-term Power Purchase Agreement with EGAT for 27 years from the initial
operation date and is expected to start its commercial operation in 2013. Its shareholders consist
of Ch.Karnchang Public Company Limited which holds 28.50 percent, Laos PDR holds 25 percent,
Bangkok Expressway Public Company Limited holding 12.50 percent, while P.T. Construction &
Irrigation holds 4.0 percent, Shlapak Development Company holds 4.0 percent, Team Consulting and
Management Company Limited holds 1.0 percent and the Company holds 25 percent.
Nam Ngum 2 Power Company Limited
Location : Lao PDR Tel. (007) 856 21 223 215 Fax. (007) 856 21 215 500
Nature of business : Electricity generation
Shareholding Equity : SouthEast Asia Energy Limited holding 100 percent
Registered capital : USD 10 million
Paid registered capital : USD 7 million
Status : Nam Ngum 2 Power Company Limited is the operator of Nam Ngum 2 Hydro Power Plant, with
615 megawatts production capacity, which has a long-term Power Purchase agreement with
EGAT for 27 years from the initial operation date and is expected to start its commercial
operation in 2013.
Siam Ethanol Exports Company Limited
Location : 88 Moo 8, Nonglalork Subdistrict, BanKai District, Rayong 21120 Thailand
Tel. (66) 3862 6025 Fax. (66) 3862 6025
042 043Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
042 043Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Nature of business : Producing 95-percent pure alcohol for export
Shareholding Equity : Ratchaburi Energy Company Limited holding 15 percent
Registered capital : Baht 300 million
Paid registered capital : Baht 225.25 million
Status : Siam Ethanol Exports Company Limited has received a license to produce 100,000 liters of
alcohol per day, 30 million liters of alcohol a year. Located in Rayong province, the company is
expected to start commercial operate in 2007. Mr. Krittiponge Phatcharapinyopong,
Mr. Suwan Lertpunyaroj, Ve Wong Corporation and Ratchaburi Energy Company Limited holds
21 percent, 15 percent, 49 percent and 15 percent of its shares, respectively.
Chubu Ratchaburi Electric Services Company Limited
Location : 128 Moo 6, Phikunthong Subdistrict, Mueang District, Ratchaburi 70000 Thailand
Tel. (66) 2978 5180, (66) 3236 5740 ext. 3210 Fax. (66) 2978 5126, (66) 3236 5740 ext. 3204
Nature of business : Operate and maintain power plants
Shareholding Equity : 49.99 percent
Registered capital : Baht 40 million
Paid registered capital : Baht 20 million
Status : Chubu Ratchaburi Electric Services Company Limited signed a deal to operate and maintain
power plants for Ratchaburi Power Company Limited for a total period of 14 years, effective from
initial operation date in June 2008. Its major shareholders are Chubu Electric Power
(Thailand) Company Limited and the Company, which holds 49.99 percent each.
Income structure of the Company, its Subsidiaries and Joint ventures in 2006 Major incomes of the Company come from dividends from Ratchaburi Electricity Generating Company Limited, whose
incomes are from the 25-year Power Purchase Agreement (PPA) it has executed with the EGAT. A basic income structure
under Ratchaburi Power Plant’s PPA can be divided into two major parts as follows.
1. Availability Payment (AP)
The Availability Payment is set up to cover all investments which include loans, loan interest, shareholders’ returns
and fixed operating expenses such as maintenance costs and administrative costs. In general, the AP will depend on whether
a power plant is ready to generate and transmit power as required by the EGAT regardless whether or not the EGAT orders
the plant to start distributing the power.
2. Energy Payment (EP)
Ratchaburi Electricity Generating Company Limited will receive the EP as soon as it generates power and transmits
the energy into the EGAT’s system. The EP consists of two parts as follows:
2.1 Fuel Payment
2.2 Variable Operating and Maintenance Payment
For an income structure of the joint venture business which invests in a power-generation business; namely, Tri Energy
Company Limited, in which Ratchaburi Gas Company Limited holds 50 percent therein, the Company’s income can be divided
into two parts – the AP and the EP, similar to Ratchaburi Electricity Generating ’s basic income structure.
For incomes of Siam Ethanol Exports Company Limited which Ratchaburi Energy holds 15 percent of its shares and
which has a capacity to produce 100,000 liters or alcohol a day or 30 million liters a year under the license to produce alcohol
for export, all incomes will come from the sale of 95 percent pure alcohol to overseas clients. Sales price will be based on
alcohol price in the world’s markets. Siam Ethanol Exports Company Limited meanwhile, will start its and running in 2007.
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044 045Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
The Company has already paid an interim dividend for the first six months of 2006 (January-June 2006) to its
shareholders at Baht 1 a share on September 18, 2006.
2005-2006 Income Structure of the Company
Companyûs Income Types of Income Operator Shareholding 2006 2005 Ratio Baht % Baht % Incomes from sales of Ratchaburi Electricity Generating Company Limited 99.99 - AP 12,222.42 23.57 12,394.50 27.64 - EP 38,150.28 73.58 31,640.46 70.57
Service incomes Ratchaburi Electricity Generating Holding Public Company Limited* 143.19 0.28 28.06 0.06
Profit (loss) sharing in Tri Energy Company Limited 50.00 ** 834.62 1.61 468.55 1.04 joint-venture businesses Ratchaburi Power Company Limited 25.00 (96.31 ) (0.19 ) (91.56 ) (0.20 ) Siam Ethanol Exports Company Limited 15.00 (0.90 ) - (0.93 ) - Chubu Ratchaburi Electric Services Company Limited 49.99 4.43 0.01 (2.90 ) (0.01 ) SouthEast Asia Energy Limited 25.00 (14.34 ) (0.03 ) (1.15 ) -
Interest incomes Ratchaburi Electricity Generating Holding Public Company 346.55 0.67 115.67 0.26 Limited Ratchaburi Electricity Generating Company Limited 99.99 199.58 0.38 160.03 0.36 Ratchaburi Energy Company Limited 99.99 3.68 0.01 2.77 0.01 Ratchaburi Gas Company Limited 99.99 - - 0.03 - Ratch Udom Power Company Limited 99.99 0.01 - 0.01 -
Others Ratchaburi Electricity Generating Holding Public Company Limited 0.49 - 3.74 0.01 Ratchaburi Electricity Generating Company Limited*** 99.99 54.52 0.11 119.53 0.26 Ratchaburi Energy Company Limited 99.99 - - 0.02 -
Total 51,848.22 100.00 44,836.83 100.00
Dividend Payment Policy Ratchaburi Electricity Generating Company Limited has a policy to pay dividend at the 100 percent of its net profit after the deduction for legal reserve and other reserves that sqecified as conditions in the loan agreement.
Ratchaburi Electricity Generating Holding Public Company Limited has a policy to pay dividend at the portion no less than 40 percent of its net profit after the deduction of legal and other reserves.
The following are dividends that the Company has paid to its shareholders since is inception:
/1 The Company has to deduct for the legal reserve at the rate of not less than 5 percent of its annual net profit until the amount of such legal reserve is not less than 10 percent of the Company’s registered and paid up capital, or Baht 1,450 million. In 2005, the legal reserve of the Company was Baht 1,299 million, therefore, only in 2006 the Company had to deduct only Baht 151 million as another amount for such reserve. As a result, the Company’s net profit after legal and other reserves at Baht 5,955 million. /2 This number is an amount proposed for consideration and resolution from the Shareholders’ Annual General Meeting 2006, which will be held on April 20, 2007
Net profit of the Company and Net Profit after legal % of Amount of Dividend Number of RATCH Dividend per Year
its Subsidiaries (Million Baht) and other reserves Dividend Payment Paid (Million Baht) Shares (Million Share) Share (Baht) 2001 3,060 2,907 49.9 1,450 1,450 1.00
2002 4,729 4,492 48.4 2,175 1,450 1.50
2003 5,424 5,153 49.2 2,537 1,450 1.75
2004 6,487 6,162 47.1 2,900 1,450 2.00
2005 6,066 5,763 50.3 2,900 1,450 2.00
2006 6,106 5,955 /1 51.1 3,045 1,450 2.10 /2
* In 2006, the Company received development fee from Ratchaburi Power Company Limited in the amount of Baht 101.33 million as specified in the Service Agreement dated February 27, 2004. ** The Company has increased the shareholding in Tri Energy Company Limited from 37.50 percent to 50 percent, on March 9, 2005. *** The 2005 income was included with the Baht 106 Million Compensation from the Combustion Sytem improvement period
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044 045Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
The Industry and Competition
Power Consumption In 2006, power demand in Thailand reached 141,980 gigawatt-hour, 5.3 percent higher than the previous year
(yet lower than the demand forecast by the Thailand Load Forecast Sub-Committee of 6.6 percent). One reason was related to
the Ministry of Energy’s measures and relentless campaigns for energy conservation and efficient energy consumption. The
peak load occurred on May 4, 2006 at 1.30 p.m. amounted 21,064 megawatts which 2.56 percent higher from the previous
year peak load. As of December 31, 2006, Thailand installed generating capacity totaled 27,271 megawatts out of which
15,795 megawatts belonged to EGAT, 640 megawatts import, and 10,836 megawatts purchased from local IPPs and SPPs.
Overview on Developments of IPPûs and EGATûs Projects The 1,400 megawatts coal-fired BLCP thermal power plant has started its commercial operation into the EGAT’s
system since October 2006. In addition, there are two Combined-Cycled Power Plants currently under construction; namely,
the 1,400-megawatt Ratchaburi Power’s Power Plant (held 25 percent by Ratchaburi Alliances Company Limited) and the
1,400-megawatt Gulf Power Generation Power Plant. Besides, EGAT has been obtained an approval to construct four
Combined Cycle Power Plant Projects, with total generation of 2,800 megawatts. As a result, the total generation capacity of
projects currently under construction is around 5,600 megawatts and the commercial operation dates of all projects are
scheduled within 2010.
Currently, the Company is negotiating to invest with expected 25 percent shareholding in several overseas projects,
which have signed agreements to sell their power to EGAT. These projects include the 615-megawatt Nam Ngum 2 Hydro
Power Plant and the 440-megawatt Nam Ngum 3 Hydro Power Plant in Lao PDR. In addition, the Company is ready to submit
a bid in the upcoming solicitation for IPP power plants in 2007 as set by the Ministry of Energy. The Company has undertaken
project feasibility studies both at the existing location and new sites for being most responsive to the bidding requirements
and conditions. The Company’s expansion project on the 725-megawatt Ratchaburi Power Plant Block 4 has been prepared
with common facilities that will lead to competitive generating cost and eventually benefit the end users.
Energy Policy The National Energy Policy and Development Plan have been approved by the National Energy Policy Council (NEPC) and
the Cabinet on November 6, 2006 and November 21, 2006 respectively. The substance related to power is summarized as
follows:
1. Restructure and Improve the Energy Industry Management so as to optimize the efficiency of the national
energy management.
• Speed up the drafting and enforcement of the Energy Act with a view to distinctly separating the policy-making
features from the regulatory ones. The regulation of the energy industry will cover the electricity and natural gas industry,
and an Independent Regulatory Body will be established
2. Procure Energy so as to ensure sufficiency and security of energy supply.
• Revise Thailand's Power Development Plan:
o Adjust the load forecast to be more suitable and correspond with the economic conditions so as to ensure
appropriate investment in the power sector and hence adequate supply to meet the demand.
o Promote greater participation of the private sector in power generation by accelerating the issuance of
a request for proposals for power purchase from Independent Power Producers (IPPs).
o Diversify fuel sources and types for power generation, including power purchase from neighboring
countries, to ensure energy security and price stability, taking into account the generation costs,
environmental impact and consumers’ benefits.
RATCH2006
The Industry & Competition
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3. Promote Energy Conservation and Energy Efficiency
• Support the purchase of power from power producers using the cogeneration system, which is an efficient system
for power generation, via the Regulations for the Purchase of Power from Small Power Producers (SPPs) and the Regulations
for the Purchase of Power from Very Small Power Producers (VSPPs) at a suitable amount of purchasing capacity.
4. Promote Alternative Energy Suitable for Thailand in order to diversify fuel types and reduce dependency on
energy import.
• Support the purchase of power generated from renewable energy, such as agricultural residue, industrial
wastes, biogas, garbage, wind and solar energy, in a suitable proportion and with appropriate purchasing prices by speeding
up the announcement on the increase of purchasing capacity from VSPPs and the establishment of purchasing price adders
from the prices specified in the Regulations.
• Establish a public organization to carry out the promotion of renewable energy utilization in the communities
to bring about tangible and sustainable outcome as its implementation would be flexible and efficient.
• Support the policy study, research and development on alternative energy so as to determine practical
guidelines on alternative energy development of the country.
5. Establish the Energy Price Structure so that energy pricing would be transparent, fair and would reflect the
actual costs.
• Revise the calculation method of the Fuel Adjustment Charge (Ft) to be more appropriate and fairer, allowing
the pass-through of fuel costs and power purchasing prices under efficient operation.
6. Establish Measures Pertaining to Clean Energy to reduce the environmental impact resulting from various
forms of energy industry operation.
• Attach importance to the reduction of environmental impact resulting from energy business development by
entrusting joint responsibility for the costs of environmental protection and solution to energy producers, distributors and
consumers.
• Comply with the environmental commitments that have been ratified by Thailand in the international forums.
• Join the international cooperation in implementing environmental measures pertaining to the energy industry
operation to enhance sustainable energy development.
• Forge ahead the Clean Development Mechanism (CDM) to promote efficient use of energy and to enhance
greater use of renewable energy.
7. Promote the Private Sector and General Public Participation in Policy-Making to create understanding and
cooperation in energy development of the country.
• Promote participation in determining energy policy and measures so that energy development would be sustainable.
The policy also covers the study and research to formulate energy management that is sustainable and complies with
the philosophical principle of Sufficiency Economy in energy procurement, sustainable energy development, energy efficient
consumption, and promotion of competition in energy business.
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TOTAL EGAT GENERATION REQUIREMENT January 2007 (Adjusted April 2006) : Base Case
Peak Energy Year MW Increase GWh Increase
Load Factor
MW % GWh % %
Source : Ministry of Energy
Forecast
2006 (2549) 21,064 527 2.56 141,980 7,153 5.30 76.95
2007 (2550) 22,567 1,503 7.14 151,019 9,040 6.37 76.39
2008 (2551) 24,011 1,444 6.40 159,348 8,329 5.52 75.76
2009 (2552) 25,279 1,269 5.28 168,300 8,952 5.62 76.00
2010 (2553) 26,690 1,411 5.58 177,638 9,337 5.55 75.98
2011 (2554) 28,124 1,433 5.37 186,694 9,056 5.10 75.78
2012 (2555) 29,810 1,686 6.00 197,816 11,122 5.96 75.75
2013 (2556) 31,569 1,760 5.90 209,568 11,752 5.94 75.78
2014 (2557) 33,401 1,832 5.80 221,851 12,283 5.86 75.82
2015 (2558) 35,467 2,066 6.18 235,637 13,786 6.21 75.84
2016 (2559) 37,637 2,170 6.12 250,060 14,423 6.12 75.85
2017 (2560) 39,816 2,179 5.79 264,561 14,501 5.80 75.85
2018 (2561) 42,049 2,233 5.61 279,505 14,944 5.65 75.88
2019 (2562) 44,336 2,287 5.44 294,743 15,239 5.45 75.89
2020 (2563) 46,737 2,401 5.42 310,722 15,979 5.42 75.89
2021 (2564) 49,213 2,476 5.30 327,182 16,460 5.30 75.89
Average Growth
2007-2021 - 1,877 5.82 - 12,347 5.72 -
Thailand Load Forecast Subcommittee
January 26, 2007
Load Forecast Load forecast by Thailand Load Forecast Sub-committee (updated in January 2007) is depicted as follows:
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The Ministry of Energy has set up a framework on the solicitation from IPPs in 2007 where it will take into
consideration an increasing demand, purchase volume, bidder qualifications and promotion of non-natural gas-fired.
In addition, the conditions on environment and community responsibilities will be added to the bidding documents.
Currently, competitions in the power business is getting more fierce since all operators require continuous growth
and business expansion while the demand growth tends to be at diminishing rate and the policies strictly enforce on
efficient energy, alternative energy and renewable energy consumption taking more concerns on environmental impacts and
communities quality of life. The Company realizes the situation and has set its policy to accommodate this tough
environment. It pledges to maintain the community’s peace, hold on to environmental and social responsibilities and to be
a trusted member of the community. Also, it will persist on safety and healthy workplace to obtain confidence from all
stakeholders, at large and on equal basis.
New Power Plant Gas Turbine and
Reserved
Year
Natural Gas Coal
Hydro Power RPS Imported Total
Margin
Megawatt Megawatt
Megawatt Megawatt Megawatt Megawatt
%
2011 700 - 500 35 597 1,832 16.9
2012 1,400 - - 70 - 1,470 15.6
2013 700 1,400 - 105 990 3,195 17.2
2014 700 700 - 70 - 1,470 15.6
2015 700 1,400 - 105 400 2,605 16.8
Total 4,200 3,500 500 385 1,987 10,572
2016 700 700 - 70 450 1,920 15.7
2017 700 1,400 - 105 460 2,665 15.4
2018 1,400 1,400 - 140 490 3,430 15.9
2019 1,400 1,400 - 140 510 3,450 15.4
2020 1,400 700 460 128 540 3,228 15.1
2021 700 1,400 230 117 560 3,007 15.1
Total 6,300 7,000 690 700 3,010 17,700
Grand Total 10,500 10,500 1,190 1,085 4,997 28,272
Source : Ministry of Energy
Draft Power Development Plan The Ministry of Energy proposed on November 15, 2006 a newly revised draft Power Development Plan in which the portion
of fuel to be consumed by new power plants and the power purchase from foreign countries have been preliminary determined
as follows; 40 percent natural gas-fired, 40 percent coal-fired, and 20 percent import. Details are as hereunder illustrated:
048 049Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
048 049Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
The Company’s Board of Directors has agreed that when operating its business the Company may experience
a variety of risk factors. However, to meet the international standards of risk management through good corporate
governance, which will lead to end outcome in customer satisfaction and preferable returns for shareholders and all
stakeholders, the Company’s Board of Directors has set the philosophy and policy for risk management as follows:
Risk Management Philosophy “The Company is confident in and aware of the importance of effective risk management and control, which will
enable the Company to run its business with stability, continuity, and an acceptable level of risk. It is used as a management
tool to maximize the Company’s success opportunity, while minimizing the possibility of failure and loss, and reducing
the uncertainty in the Company’s overall performance that will eventually lead to the Company’s objectives achievement.”
Risk Management Policy 1. Promoting the culture of risk management to encourage understanding, awareness and joint responsibility
in controlling the impact towards the Company in the company-wide management and operations.
2. Providing sufficient and accepted international standard process, framework and measures for indicating,
analyzing, assessing, prioritizing, managing, controlling, monitoring, reporting, evaluating and communicating the
information of risks on a continuous, regular and company-wide basis.
3. Measuring the risk in terms of quality, such as the Company’s reputation and image, and in terms of quantity, such as
loss, revenue decrease, and expense increase based on risk exposure and impact.
4. Setting acceptable risk limit to control the magnitude of damages, and also identifying incidents or risk degrees
that are warning signs for the employees to perform any action to mitigate it within such limit.
5. Constructing written operational manuals for all executives and employees to abide by, in order to control the
operational risk.
The Company’s Board of Directors appointed the Risk Management Committee comprising three directors, to be in
charge of screening policy, setting strategies and risk management framework, controlling, monitoring, maintaining risk level,
and effectively managing risks of the entire organization.
The Company has established a Risk Management Working Group (Working Group) comprising the Company’s
top executives. The Working Group is responsible for analyzing and assessing risks, managing risks to comply with
the policy set by the Company’s Board of Directors, and preparing quarterly risk management report to the Company’s
Board of Directors.
In recent organization restructuring, the Risk Management Department was established to coordinate risk
management at functional level. The Company also provided a workshop on risk management for employees from every line
function of the Company’s Group.
In 2006, the Risk Management Committee reviewed both internal and external factors that may affect the Company’s
ability to achieve its goals and agreed to classify the Company’s risks into three categories as follows:
1. Investment Risks mean the risks arising from project investment.
2. Financial Risks mean the risks from lack of liquidity and insufficiency of capital to invest in a project.
3. Management risks mean the risks occurred from mistakes in management, operational procedures, human
errors and internal factors or situations.
Risks from Business Operation
RATCH2006
Risks from BusinessOperation
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Investment Risks The Company has a policy to invest in electricity generating and related businesses, taking into account the return
for shareholders, employees and the public.
To examine risk factors on the Company’s investment, the process is divided into four phases as follows:
Phase 1: Project Selection
The Company put much importance in considering risk factors related to the project selection. Those factors to be
reviewed include economic, social, and political situations as well as technological changes. The projects that are in line
with the Company’s policies and strategies will be selected.
Phase 2: Strategic Partner Selection
In deciding investment in each project, the Company thoroughly and prudently studied the feasibility and returns
on investment. In selecting strategic partner, the Company would consider financial risks, conflict of interest and the policies
of the potential strategic partner in order to ensure that they are in line with the Company’s investment policies and
strategies. Roles and responsibilities of each party were clearly identified in order to create synergy. In addition, in this phase,
the Company has to consider risks related to environment impact, financial support that enables the project to achieve its
goal, all agreements with business partners, and public and community acceptance.
Phase 3: Project Development
The Company has four projects under development as follows:
• The construction of Combined-Cycle Power Plant Project of 1,400 megawatt generating capacity in the
Ratchaburi Power Plant’s area. The project is operated by an affiliated company, Ratchaburi Power Company
Limited.
• The construction of an Alcohol-manufacturing Plant of 30 million liters per year production capacity.
The project is operated by an affiliated company, Siam Ethanol Exports Company Limited.
• The construction of a Hydro Power Plant – Nam Ngum 2 of 615 megawatt generating capacity. The project
investment is made through SouthEast Asia Energy Limited.
• The Flare Gas Fired Power Plant Project of 1.75 megawatt generating capacity. The project investment is made
through Ratchaburi Energy Company Limited.
The four projects are exposed to some risks that the project might not be completed on schedule that would cost
the Company extra expenses. The Company has closely followed up the project’s progress on a regular basis. The Company has
nominated its representatives to be members of the Board of Directors or management of each joint venture or affiliate
company to monitor the progress, and take part in setting regulations and directions of the project effectively, in order to
control the budget spending and carry on the construction plan.
Phase 4: Commercial Operations
There are two projects already operated; the first project is 3,645 megawatt Ratchaburi Power Plant and the second
one is a 700 megawatt Combined-Cycle Power Plant operated by Tri Energy Company Limited (350 megawatts out of which
belongs to the Company Group). While Ratchaburi Electricity Generating Company Limited and Tri Energy Company Limited
are responsible for electricity generating and operational risk management in order to maintain technical characteristics
including Contracted Capacity and Contracted Operating Characteristics (COC), the Company has responsibility to follow up,
review, supervise and provide support to ensure risk management complies with international standards, which will enable
the Company to achieve its returns on investment target.
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The Company’s major income is generated from the operations of Ratchaburi Electricity Generating Company
Limited, the Company’s major subsidiary that has a long-term power purchase agreement with EGAT, which already includes
the availability payment (AP) and energy payment (EP) that covers all related risks. Therefore, the Company is confident
of having constant income as projected throughout the agreement period.
Although the Company the possibility that Ratchaburi Electricity Generating Company Limited may not achieve its
targets is very low, the subsidiary company still have to manage its own risks as follows:
1. Availability Payment (AP)
According to the Power Purchase Agreement (PPA), EGAT is obliged to pay the AP which is in line with the agreed
COC while Ratchaburi Electricity Generating Company Limited is obliged to maintain technical characteristics and liable for
penalty payment in case availability does not meet the contracted level.
However, to minimize the risk of the revenue reduction that may occur by the penalty payment deducted from the
full AP, the certain limitation on such penalty was defined in the PPA. It was stated in the PPA that in case the fine is less than
the minimum payment (or 0.5 percent of the full annual AP), the fine is not subject to be paid. At the same time, the fine shall
not exceed the maximum charge (or 2 percent of the full annual AP).
2. Fuel Prices
The changes of natural gas prices do not affect Ratchaburi Electricity Generating Company Limited since the
calculation of Energy Payment (EP) under the PPA is based on the actual price of natural gas each month. EGAT as the
purchaser will take risk from the fluctuation of energy prices. However, Ratchaubri Electricity Generating Company Limited
must maintain the actual Heat Rate at the level below or equivalent to the rate stated in the PPA.
3. The Heat Rate of the Plants
Ratchaburi Electricity Generating Company Limited will receive a Fuel Payment, which is a part of the EP, in
accordance with the Heat Rate of the plants (the rate of utilizing heat in generating one unit of electricity) specified in the
PPA. The received EP will be recorded as the fuel costs in operating the power plants. Although the Heat Rate specified in the
PPA covers the margin to compensate the depreciation of machines and equipment in the long run, Ratchaburi Electricity
Generating Company Limited still holds certain risk on the Heat Rate in case that the actual Heat Rate is higher than the rate
stated in the agreement. Consequently, Ratchaburi Electricity Generating Company Limited will be liable for the additional
fuel costs.
4. Fuel Quality
The quality of fuel is clearly specified in the Gas Sale Agreement (GSA). In case that PTT Public Company Limited
(PTT) supplies fuel with the quality lower than that specified in the GSA, Ratchaburi Electricity Generating Company Limited
is entitled to reject that fuel, and it is regarded that PTT is unable to deliver the qualified fuel. Ratchaburi Electricity
Generating Company Limited does not take risk from such unqualified fuel supplied by PTT or from its rejection of the
unqualified fuel since the cases do not effect the availability under the PPA.
5. Operational Cost
According to the PPA, the AP will be adjusted into 2 cases; the expenses in Thai baht will be adjusted accordingly
to the Thai Consumer Price Index (CPI), and the expenses in US dollars, such as expenses on imported spare parts and
equipment, will be adjusted accordingly to the Manufacturers Unit Value Index (MUV Index) and to the exchange rates as
EGAT will absorb the risk for the extra expenses as specified in the PPA. Ratchaburi Electricity Generating Company Limited,
however, is liable for the risk in case the actual expenses adjusted and higher than the Thai CPI or the MUV Index.
Nevertheless, only for the expenses on imported spare parts, if the adjusted prices are higher than the MUV Index, EGAT will
share the responsibility for extra expenses in the proportion stated in the agreement.
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To mitigate the risk caused by the increasing prices of the plant spare parts or by the more spare parts employed
than the estimated expense for improving safety and efficiency of gas turbine, Ratchaburi Electricity Generating Company
Limited entered into the Contractual Services Agreement (CSA) with the Joint Ventures between General Electric
International Operation Co., Inc and GE Energy Parts, Inc. The CSA of USD 451 million is effective since the signed date until
the final operating date of the gas turbine according to the PPA.
6. Power Plant Operation and Maintenance
According to the Power Plant Operation and Maintenance Agreement (OMA), Ratchaburi Electricity Generating
Company Limited has outsourced the works to EGAT with the conditions concerning incentive and penalty that were
mutually agreed and set in order to control the EGAT’s operation based on the key factors namely the Availability Payment
(AP) and Plant Efficiency.
In case EGAT’s operation causes the power plant the less in AP or the less in Plant Efficiency, Ratchaburi Electricity
Generating Company Limited will receive a fine from EGAT as specified in the OM, which, however, may not cover such a loss
in revenue as stated in the PPA. Nevertheless, since EGAT is specialized and experienced in the operation and maintenance of
power plants in Thailand for more than 30 years, it is of very less opportunity that such incident occurs, except that there in
any accident or machinery malfunction.
In case of force majeure, Ratchaburi Electricity Generating Company Limited has an insurance covering all risks
that may occur to machines, property and people, including the third party.
7. Political Risks
7.1 The Acquisition by Government Agency
The acquisition by a governance agency, whether it is the physical acquisition of the power plant or the share
acquisition, will be considered the Force Majeure resulted from the Government action under the PPA and Ratchaburi
Electricity Generating Company Limited still have the right to receive the AP. In case the acquisition prolongs more than one
year, EGAT has the right to revoke the PPA but it has to pay the revocation fee equivalent to the total sum of the Company’s
remaining liabilities, retained earnings, reserved funds and shareholders’ dividend.
7.2 Legislation Changes
In case the changes of laws affect the capital, revenue, or expenses of Ratchaburi Electricity Generating
Company Limited in the amount exceeding the number specified in the PPA, EGAT and Ratchaburi Electricity Generating
Company Limited will jointly discuss the adjustment of AP and EP. If legislation changes affect the company’s ability to abide
by the PPA, the situation will be considered as an uncontrollable situation incurred by the government’s action. The Company
will continue to be entitled to receive the AP.
Financial Risk 1. Financial Liquidity
In financial liquidity management, the Company has taken into account the sufficiency of funds for project
investment and the Company’s operations by preparing the financial plans, cash flow projection of dividends from
subsidiaries and joint venture business. The business operations have been monitored closely and the financial projection
and plans have been reviewed on a regular basis in order to ensure that the Company’s investment plan has been in line with
the financial market situation. The Company has continuously monitored the financial market and other financial instruments
to minimize financial cost and mitigate any associated risk that might occur.
052 053Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
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2. Debt Service Capability
Ratchaburi Electricity Generating Company Limited, a subsidiary of the Company, has secured loans in Thai baht
from six domestic financial institutions under the loan agreement dated June 23, 2005, which requires the Ratchaburi
Electricity Generating Company Limited to repay the principal and interests until 2015. As of December 31, 2006, the accrued
balance under the agreement is Baht 23,242,996,000. On July 29, 2005 the Ratchaburi Electricity Generating Company
Limited issued and offered debenture amount of Baht 10,000,000,000 comprising three-year and five-year debentures. As of
December 31, 2006, the outstanding balance of the debenture is Baht 6,500,140,000. According to the loan agreements, the
subsidiary company must maintain the Debt Service Coverage Ratio at no less than 1.1 : 1. In case Ratchaburi Electricity
Generating Company Limited fails to maintain the Debt Service Coverage Ratio or the loan agreements, the creditors will fine
or confiscate the security, which may affect its operations. Ratchaburi Electricity Generating Company Limited has already
prepared for such risks by allocate financial reserves for loans and interest payment. However, since the first initial drawdown,
Ratchaburi Electricity Generating Company Limited has never failed to meet the loan covenance in all respect resulting in no
such kind of default according to loan agreement.
3. Interest Rate
The interest rate, as specified in the long-term loan and the five-year debentures (for the interest paid in the
3rd - 5th year) of Ratchaburi Electricity Generating Company Limited, is based on MLR rate. According to the Power Purchase
Agreement (PPA) entered into with EGAT, Ratchaburi Electricity Generating Company Limited will receive its revenue
with MLR indexation from EGAT, resulting in no interest rate risk.
4. Exchange Rate
Though income, loans and most of the expenditures of Ratchaburi Electricity Generating Company Limited are
in Thai baht, there is exchange rate risk arising from the purchase of imported equipment and spare parts. However, EGAT
has compensated to the exchange rate volatility for importing cost as a part of revenue under the PPA entered into with
EGAT.
Management Risk 1. Human Resource
The Company realizes that employees are valuable resources and, therefore, manages well the risks related to its
employees. The Company ensures effective recruitment and selection process, provides appropriate and fair remunerations
and benefits to retain qualified human resource, develops human capability, and regularly reviews work process and system
to support the Company’s business expansion.
In 2006, the Company launched an organizational restructure to be in line with the Company’s business
expansion. The Company continuously provided training to its employees at all levels according to the annual human
resource development plan to increase their capability and potential. The action is to increase capability of its employees in
all levels to be able to replace vacancies when needed and appropriate.
The Company studied and reviewed its remuneration structure in order to retain and motivate qualified
employees and to be competitive in the labour market. The Company also improved its Human Resource Information System
(HRIS) and performance appraisal system in order to ensure that its human resource management effectively supports the
Company’s policy.
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054 055Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
2. Corporate Communications
The Company has communicated, educate and create understanding on electricity generating plant business to
community and consistently operate community relations activities. The Company has also been involved in the
development and management of public projects through the Ratchaburi Power Plant’s Community Development Project
in order to promote quality of life in nearby communities and society at large.
For risk related to corporate communication that may affect the Company’s operations, the Company highly
emphasize on fair, consistent and equal information disclosure to the public in accordance to the corporate governance
principles of listed companies. In 2006, the Company focused on educating the public and community on power business
operations and electricity generating activities. Good understanding among the local communities on electricity generating
process has been well established, resulting in greater cooperation in community development in the future.
To promote continuity in the development of surrounding communities, the Company has paid high importance
to sustainable development. It has support the Population and Community Development Association (PDA) in the
implementation of the Ratchaburi Power Plant’s Community Development Project in improving quality of life, promoting
career development and upgrading the living of surrounding communities, which resulted in stronger and healthier
communities, better quality of life and better public perception towards the Company’s business and operations.
In new project development, the Company has a clear policy that it will closely participate in community projects,
starting from project initiation. The development of these projects are mainly based on community benefits in order to
create mutual benefits and acceptance of such project development, which strongly promotes sustainable community
development in parallel to the Company’s project development.
054 055Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
054 055Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
According to the government’s policy encouraging the private sector to compete in power generation industry,
it is expected that in the first quarter of 2007, the Ministry of Energy will issue a Request for Proposal (RFP) for Independent
Power Producers (IPPs) to submit a power purchase proposal to the Electricity Generating Authority of Thailand (EGAT),
the sole power purchaser in Thailand. The total power purchased from the IPPs will be 3,000-4,000 megawatts and
commercial operation will start between 2011-2013.
Aside from buying power domestically, the Thai Government also promotes the power purchase from neighboring
countries such as Lao PDR, Myanmar, Malaysia, and China. On December 20, 2006, the Thai and Lao PDR governments signed
an Memorendum of Understanding (MOU) where electricity purchase from Lao PDR will be increased from 3,000 megawatts
up to 5,000 megawatts. The power purchase from Myanmar is expected to be approximately 1,500 megawatts. As for Thailand
and Malaysia, the current purchase is at 300 megawatts and it is expected to be increased up to 600 megawatts in the near future.
At the same time, the government also promotes renewable energy power plant projects such as biomass, wind and
solar energy. There will be a solicitation to purchase electricity from renewable energy power plants and dispatching
regulations, plant characteristics and configurations and tariffs will be specially determined for renewable power plants.
In addition, the power purchase from Very Small Power Producers (VSPPs) will be increased from one megawatt to no more
than 10 megawatts.
As a result of the said government’s policy, the Company, as an IPP, perceives investment opportunities to expand
its generating capacity domestically and internationally to increase returns to the shareholders. The modern, safe and
environmental-friendly production process is focused so that the Company has determined the framework for its future
power production and distribution projects as follows:
1. IPP Power Plant Projects The Company is prompt and prepared for the new IPP power plant bidding. It has processed a potential site selection,
conducted feasibility studies and an environment impact assessment, prepared a financial plan and undertaken community
relations work to gain acceptance from local people. To participate in the 2007 IPP bidding, the Company conducted project
feasibility studies and new project development plan as follows:
1.1 Ratchaburi Combined Cycle Power Plant Block 4
The 700-750-megawatt Ratchaburi Combined Cycle Power Plant Block 4 uses natural gas from Myanmar as its
primary fuel. The plant is one of the most well prepared since it has furnished with common facilities such as a demineralization
plant, a wastewater treatment system and utility system. The project’s Environment Impact Assessment (EIA) report was
approved by the Natural Resource and Environment Policy and Planning Office on March 7, 2005.
1.2 Tri-Energy Combined Cycle Power Plant Block 2
Ratchaburi Gas Company Limited, the Company’s subsidiary, co-developed the Tri-Energy Power Plant, Block. 2,
with Texaco Thailand Energy Company One, an affiliate of Chevron Corporation, in the Tri-Energy Power Plant compound in
Ratchaburi Province. The area is equipped with fundamental infrastructure and therefore ready for project development.
At the same time, the project’s EIA report was approved by the Natural Resource and Environment Policy and Planning
Office on November 10, 2005.
1.3 New Combined Cycle Power Plants in the Central and Eastern Region of Thailand
The Company has selected a potential site in the Central and Eastern part of Thailand to develop two natural
gas-fired Combined Cycle Power Plants, which critical factors for power generation for example siting, size and description
of area, rules and regulations of land use in the area, possibility for area development, and support from local community, will
be taken into consideration. Then, feasibility studies will be made on both technical and financial respects including the
selection of Engineering Procurement and Construction (EPC) contractor. Currently, the project is being studied for its
environment impact assessment (EIA).
Future Projects
RATCH2006
Future Projects
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056 057Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
1.4 A Coal-Fired Thermal Power Plant in the Southern part of Thailand
Since as much as 70 percent of the country’s power plants rely on natural gas as fuel for generation, the
government has a policy to increase the portion of Coal-Fired Power Plants for the sake of national power system security.
The Company has searched for potential sites both in Thailand and in neighboring countries to develop a coal-fired power
plant. The area will be selected based on community support and acceptance as the first prioritized factor before considering
other factors related to power generation. The project is currently being studied on its technical and pricing soundness.
2. Overseas Power Plant Projects The Company is seeking investment opportunities in Lao PDR, Myanmar and Vietnam to build a power plant of which
generated power may be either sold to Thailand or in those countries. At present, there is a plan to develop the following
power plants in neighboring countries:
2.1 The Nam Ngum 3 Hydro Power Plant
A group of project developers which the Company plans to hold 25 percent of its shares entered into an MOU
with EGAT on December 18, 2006 to purchase power from the Nam Ngum 3 Hydro Power Plant. The MOU contains important
criteria for further discussion in order to come up with a power purchase agreement. The project, which will be situated in the
Northern part of Lao PDR, has a total production capacity of 440 megawatts and is expected to complete its construction and
commercially operate by early 2013. The plant will enter into a long-term power purchase agreement with EGAT for 27 years.
2.2 A Power Plant in the Southern part of Lao PDR
The Company and the firm that had an MOU with the Lao PDR Government is studying the feasibility to develop
several projects concurrently of which the generated power will be sold to the lower Northeastern provinces of Thailand.
When technical and financial studies reveal that the project is feasible, the Company will negotiate with EGAT on the tariff
and on the long term power purchase agreement.
2.3 Power Plant Projects in Myanmar and Vietnam
The Company is seeking an opportunity to invest in a Combined Cycle Power Plant and a Hydro Power Plant in
Myanmar of which the generated power will be sold to Thailand.
As for Vietnam, the Vietnamese Government is currently promoting foreign investors to invest in power sector
since domestic supply cannot meet with local demands. The promotion includes exemptions of import duty on machines
and equipment and income tax. The Company is currently negotiating with a co-investor in Vietnam.
3. Renewable Energy Power Plants Renewable energy is clean, sustainable and reduces environmental impacts. It also promotes further development of
sustainable energy and decreases dependence of imported energy. The Company ranks investment in renewable energy
power plant among its priorities as it is one of the government’s major policies and it has studied a feasibility to develop
a wind power plant and a solar thermal power plant, which can be summarized as follows:
3.1 Wind Power Plant
The Company has studied sources of wind power and monitored wind power generation technology based on
wind velocity in Thailand. It also keeps updated with the technology of wind turbines suitable for speeds of wind found in
Thailand as well as calculates the cost of wind power generation to determine a possibility to develop it as a source of future
energy to respond to the government’s renewable energy development policy.
3.2 Solar Thermal Plant
The Company plans to expand its investment into an alternative energy business, which will be based on highly-
efficient technology and should be a long-term investment to increase its competitiveness in the long run. So far, it has
studied and looked into several alternative energy projects for future development opportunities.
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056 057Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
For fiscal year ending December 31, 2006
Value Connected Transaction Related parties (Million Reasons Baht)
Transaction with Related Companies
Ratchaburi Electricity Generating Holding Public Company Limited 1. Provision Management Service Agreement 1.1 Providing services related to internal audit, legal, secretariat Ratchaburi 2.66 Ratchaburi Electricity Generating Co., Ltd. does not of the Board of Directors, information technology and Electricity have these functions while the the Company can financial management Generating Co., Ltd. provide. The service fee is charged on actual time • In 2006, service income was Baht 2.66 Million (agreement signed spent based on market rate. • As of December 31, 2006, other account receivable and on January 4, 2006) management service receivable for December 2006 were Baht 0.27 Million
1.2 Providing services related to internal audit, legal, secretariat Ratchaburi Energy 0.05 Ratchaburi Energy Co., Ltd. does not have experts of the Board of Directors, information technology, Co., Ltd. with these skills while the Company can provide. and financial management (agreement signed The service fee is charged on actual time spent • In 2006, service income was Baht 0.05 Million on January 4, 2006) based on market rate.
1.3 Providing management service by assigning executives Chubu Ratchaburi 5.00 Chubu Ratchaburi Electric Services Co., Ltd. to Chubu Ratchaburi Electric Services Co., Ltd. Electric Services requests for the service and the Company has an as the Managing Director Co., Ltd. expert in this area. The service fee is based on • In 2006, service income was Baht 5.00 Million (agreement signed market rate for the person is such position. • As of December 31, 2006, other account receivable and on January 1, 2006) management service receivable for December 2006 were Baht 0.45 Million
1.4 Providing engineering service to the power generating from Ratchaburi Energy 0.30 Ratchaburi Energy Co., Ltd. does not have the function. associated gas power plant project to Ratchaburi Energy Co., Ltd. Co., Ltd. The service fee is similar to the market rate at Baht • In 2006, service income was Baht 0.30 Million (agreement signed 0.02 Million per month (excluding VAT) additional • As of December 31, 2006, other account receivables and on May 23, 2006) with other actual expenses. management service receivable for December 2006 were Baht 0.02 Million
1.5 Assigning three representatives to Tri Energy Co., Ltd. Tri Energy Co., Ltd. 19.70 Tri Energy requests for the service. The service fee as the President, Accounting and Finance Manager and (agreement signed is based on market rate, which according to the Administration and Contract Management Manager on November 14, greement starts at Baht 1.42 Million per month • In 2006, service income was Baht 19.70 Million 2006) (excluding VAT) and increases 6 percent per year. • As of December 31, 2006, other accounts receivable and management service receivable for November and December 2006 were Baht 1.81 Million
1.6 Providing internal audit, secretariat of the Board of Directors, Siam Ethanol Exports 0.35 Siam Ethanol Exports does not have these legal and accounting and finance services to Siam Ethanol Co., Ltd. (agreement functions. The service fee is charged on actual hour Exports Co., Ltd. signed on January spent based on market rate, which is Baht 0.03 • In 2006, service income was Baht 0.35 Million 4, 2006 and March Million per month (excluding VAT) additional with • As of December 31, 2006, other accounts receivables 1, 2006) other actual expenses. and management service receivable for December 2006 were Baht 0.03 Million
1.7 Assigning an executive to Ratchaburi Power Co., Ltd. Ratchaburi Power 3.00 Ratchaburi Power Co., Ltd. requests for the service. as its financial manager Co., Ltd. (agreement The service fee is based on market rate at • In 2006, service income was Baht 3.00 Million signed on March Baht 0.30 Million per month (excluding VAT). 1, 2006)
1.8 Assigning two persons to SouthEast Asia Energy Ltd. SouthEast Asia 3.40 SouthEast Asia Energy requests for the service. to work in engineering and finance units Energy Ltd. The service fee is based on market rate at • In 2006, service income was Baht 3.40 Million (agreement signed Baht 0.32 Million per month (excluding VAT). • As of December 31, 2006, account receivable and on April 10, 2006) management service receivable for December 2006 were Baht 0.34 Million
RATCH2006
Transaction with Related Companies
058 059Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
058 059Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Value Connected Transaction Related parties (Million Reasons Baht) 1.9 Hiring Ratchaburi Energy Co., Ltd. to monitor the design Ratchaburi Energy 0.36 The Company does not have the function while
and construction of Nam Ngum 2 Hydro Power Plant Co., Ltd. Ratchaburi Energy Co., Ltd. can provide. The service
for two months from January-February 2006 (agreement signed fee is charged according to the agreement
• In 2006, the service fee was Baht 0.36 Million on January 17, 2006) at Baht 0.36 Million per month (excluding VAT),
which is similar to the market rate.
2. Public relations Service Agreement for Ratchaburi Power Ratchaburi Power 10.40 The Ratchaburi Power Plant Communication
Co., Ltd. Co., Ltd. Center provides publicity services to Ratchaburi
• In 2006, service income was Baht 10.40 Million (agreement signed Power Co., Ltd. by charging actual expenses as
• As of 31 December 2006, account receivable and on 1 June 2004) agreed which is fair and reasonable.
management service receivable for December 2006
were Baht 6.11 Million
3. Agreement between Ratchaburi Power Co., Ltd.’s Ratchaburi Power 101.33 The Company has operated the Ratchaburi Power’s
shareholders, in which the Company receives project Co., Ltd. Power Plant construction until financial close
development fee (agreement signed period. All shareholders will receive the fair and
• In 2006, project development income was Baht 101.33 Million on February 27, reasonable project development fee according
2004) to their investment.
4. The Company’s loan extension to subsidiaries
4.1 Loan extended through promissory notes to Ratchaburi Ratchaburi 0.83 Ratchaburi Electricity Generating Co., Ltd. needed
Electricity Generating Co., Ltd. Electricity short-term loans. Interest rate charge was based on
In 2006, loans extension details are: Generating Co., Ltd. Siam Commercial Bank Plc.’s one-year fixed deposit
• As of June 30, 2006, total amount was Baht 1,285 Million (the Board of for corporate customers plus one percent,
(Repaid on July 3, 2006) Directors’ which is fair and reasonable.
• As of August 1, 2006, total amount was Baht 200 Million resolutions
(repaid on August 2, 2006) No. 11/2005 and
• As of October 31, 2006, total amount was Baht 950 Million 6/2006)
(repaid on November 1, 2006)
• In 2006, interest income was Baht 0.83 Million
4.2 Loan extended to Ratchaburi Gas Co., Ltd. Ratchaburi Gas 28.07 The loan was used to invest in Tri Energy Co., Ltd..
through promissory notes. The total loan as of Co., Ltd. Interest rate charge was based on Siam Commercial
December 31, 2006 was Baht 360.20 Million (the extraordinary Bank Plc.’s one-year fixed deposit for corporate
• In 2006, interest income was Baht 28.07 Million shareholders’ customers plus one percent, which is fair and
• As of December 31, 2006, other account receivables meeting resolution reasonable.
and interest receivable were Baht 1.18 Million No. 1/2003 and the
Board of Directors’
resolution No. 2/2005)
4.3 Loan extended to Ratchaburi Power Co.,Ltd. Based on Ratchaburi Power 3.39 The loan was used to pay for project development
25 percent equity, loan was provided within Baht 850 Co., Ltd. (the Board before long-term loan from financial institute was
Million limit. From 2004-2006, Baht 649.56 Million was of Directors’ disbursed. Loan condition included interest rate,
borrowed and was fully repaid on March 1, 2006. resolution similar to the financial institutions’ loan condition.
• In 2006, interest income was Baht 3.39 Million No. 11/2005)
4.4 Loan extended to Ratch Udom Power Co., Ltd. Ratch Udom Power 2.78 The loan was further extended to Ratchaburi
through promissory notes. As of December 31, 2006, Co., Ltd. (The Board Alliancs Co., Ltd. for investing in Ratchaburi Power
the total amount was Baht 143.83 Million of Directors’ Co., Ltd.. Interest rate charge was based on Siam
• In 2006, the interest income was Baht 2.78 Million resolution Commercial Bank Plc’s one-year fixed deposit for
• As of December 31, 2006, other account receivable No. 2/2006) corporate customers plus one percent, which is
and interest receivable Baht 2.78 Million reasonable.
058 059Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
058 059Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Value Connected Transaction Related parties (Million Reasons Baht) Ratchaburi Electricity Generating Co., Ltd.
5. Power Purchase Agreement – Ratchaburi Power Plant EGAT (agreement 50,372.70 Ratchaburi Electricity Generating Co., Ltd. has to
Ratchaburi Electricity Generating Co., Ltd. entered a 25-year signed on supply power produced at its power plant to
Power Purchase Agreement with EGAT October 9, 2000) EGAT and in turn receives income from EGAT
• In 2006, power sales income is Baht 50,372.70 Million according to the conditions set in the Power
• As of 31 December 2006, connected transactions are Purchase Agreement, which is in line with normal
as follows: business practice.
o Trade account receivables at Baht 8,644.76 Million
o Long-term trade account receivables at Baht 24.75 Million
6. Fuel Oil Purchase EGAT 1,549.54 According to the Power Purchase Agreement,
EGAT supplies heavy oil to Ratchaburi Electricity Generating EGAT is responsible for supplying fuel and heavy
Co., Ltd. oil at market price.
• In 2006, heavy oil expenses were Baht 1,549.54 Million
• As of December 31, 2006, trade account payable was
Baht 176.21 Million
7. Station Service Power Purchase Agreement EGAT (agreement 105.92 The Company had to buy electricity from EGAT
Ratchaburi Electricity Generating Co., Ltd. signed with EGAT signed on for its power plant operation and water supply
a station service power supply agreement to be used as November 1, 2000) system at the same rate as other users.
power reserve and for water supply system
• In 2006, expenses were Baht 105.92 Million
• As of December 31, 2006, the connected transactions were:
o Account payable for November at Baht 7.02 Million
o Accrued expenses for December at Baht 16.98 Million
8. Operation and Maintenance Service Agreement EGAT (agreement 889.58 EGAT has an experience and expertise in operating
Ratchaburi Electricity Generating Co., Ltd. hired EGAT to signed on and maintaining power plant. According to
operate and maintain Ratchaburi Power Plant, including October 26, 2000) the agreement, the service charge starts from
general maintenance and major overhaul, for nine years. Baht 633 Million per year and is adjusted according
• In 2006, total expenses were Baht 889.58 Million to the Consumer Price Index, which is a normal
• As of December 31, 2006, the connected transaction business practice.
details are as follows:
o Account payable was Baht 10.22 Million
o Accrued expenses were Baht 12.22 Million
o Prepaid expenses and OMA charges were Baht 9.70 Million
9. Parts of Gas Turbine Management Agreement EGAT (agreement 14.70 The Company does not have employees specialized
Ratchaburi Electricity Generating Co., Ltd. signed a 12-year signed on in this area while EGAT does. Starting service charge,
agreement with EGAT for Parts of Gas Turbine Model August 1, 2002) according to the agreement, is Baht 12 Million per
MS9001FA management. Service fees are divided into year and adjusted according to Consumer Price
monthly service fee and actual cost incurred. Index, which is in line with normal business practice.
• In 2006, total expenses were Baht14.70 Million, including
o Monthly service charge at Baht 13.56 Million
o Customs expenses at Baht 1.14 Million
• As of December 31, 2006, the connected transaction
details are as follows:
o Account payable at Baht 1.24 Million
o Accrued expenses for December at Baht 1.21 Million
060 061Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
060 061Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Value Connected Transaction Related parties (Million Reasons Baht) 10. Environmental service agreement
10.1 Environmental quality monitoring service agreement EGAT (agreement 3.64 The Company does not have employees
for Ratchaburi Power Plant signed on specialized in this area while EGAT does.
Ratchaburi Electricity Generating Co., Ltd. hired EGAT May 29, 2006) The service charge, according to the agreement,
to provide environment quality monitoring service for is Baht 3.64 Million per year (excluding VAT),
the Ratchaburi Power Plant practice. which is in line with normal business.
• In 2006, total expenses were Baht 3.64 Million
• As of December 31,2006, advanced payment was
Baht 0.36 Million
10.2 Environment quality monitoring service for heavy EGAT (agreement 1.16 The Company does not have employees specialized
oil supply system signed on May in this area while EGAT does. The service charge,
Ratchaburi Electricity Generating Co., Ltd. hired EGAT to 29, 2006) according to the agreement, is Baht 1.16 Million
provide environment quality service for its heavy per year (excluding VAT), which is in line with
oil supply system normal business practice.
• In 2006, expenses were Baht 1.16 Million
• As of December 31, 2006, advanced payment was
Baht 0.07 Million
11. Environmental management and monitoring (ISO14001) EGAT (agreement 0.46 The Company does not have employees specialized
agreement signed on in this area while EGAT does. The service fee is
Ratchaburi Electricity Generating Co., Ltd. hired EGAT to August 13, 2002) charged based on actual expense, which is in
provide and monitor environmental management (ISO14001) line with normal business practice.
• In 2006, total expenses were Baht 0.46 Million
12. Agreement for Flue Gas Desulferization service at Ratchaburi
Power Plant
12.1 Renovation of Flue Gas Desulferization (FGD) System EGAT (agreement 62.01 The Company does not have employees specialized
at the Thermal Power Plant Unit 1 signed on in this area while EGAT does. According to the
Ratchaburi Electricity Generating Co., Ltd. hired EGAT to March 9, 2006) agreement, the service fee is Baht 62.01 Million
renovate Flue Gas Desulferization Plant for the Thermal (excluding VAT), which is in line with normal
Power Plant Unit 1. business practice.
• In 2006, total expenses were Baht 62.01 Million,
which were reimbursed from insurance companies
12.2 FGD #1 Demolition and Foundation Construction EGAT (contract 7.32 The Company does not have employees
Contract signed on specialized in this area while EGAT does.
Ratchaburi Electricity Generating Co., Ltd. hired EGAT to April 11, 2006) According to the agreement, the service fee is
demolish the Flue Gas Desulferization for the Thermal Baht 7.32 Million (excluding VAT), which is
Power Plant Unit 1. in line with normal business practice.
• In 2006, the total expenses were Baht 7.32 Million,
which were reimbursed from insurance companies
12.3 FDG#1 Guillotine Shutter Work renovation contract EGAT (agreement 1.23 The Company does not have employees
Ratchaburi Electricity Generating Co., Ltd. hired EGAT to signed on specialized in this area while EGAT does.
renovate the FDG#1 Guillotine Shutter Work renovation September 12, According to the agreement, the service fee is
at the Thermal Power Plant Unit 1. The contract ends 2006) Baht 4.90 Million (excluding VAT), which is in line
on February 15, 2007 with normal business practice.
• In 2006, the expenses were Baht 1.23 Million, which
were reimbursed from insurance companies
060 061Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
060 061Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Value Connected Transaction Related parties (Million Reasons Baht) 12.4 FGD#1 Project Management Contract EGAT (agreement 30.00 The Company does not have employees specialized
Ratchaburi Electricity Generating Co., Ltd. hired EGAT to signed on April in this area while EGAT does. According to
provide FGD#1 Project Management for the Thermal Power 20, 2006) the agreement, the service fee is Baht 3.00 Million
Plant Unit 1. The contract will end on October 31, 2007. per month (excluding VAT), which is in line with
• In 2006, total expenses were Baht 30.00 Million, normal business practice.
which were reimbursed from insurance companies.
• As of 31 December 2006, the connected transaction
details are as follows:
o Account payable – EGAT at Baht 3.21 Million
o Accrued expense-EGAT for December at Baht 3.21 Million
12.5 FGD#1 Restoration Contract EGAT (contract 294.00 The Company does not have employees specialized
Ratchaburi Electricity Generating Co., Ltd. hired EGAT to signed on June in this area while EGAT does. According to the
build FGD#1 restoration for the Thermal Power Plant 27, 2006) agreement, the service fee is Baht 420 Million
Unit 1. The contract will end on October 31, 2007. (excluding VAT), which is in line with normal
• In 2006, total expenses were Baht 294.00 Million, business practice.
which were reimbursed from insurance companies
• As of December 31, 2006, the connected transaction
details are as follows:
o Account receivable – EGAT at Baht 2.61 Million
13. Air Heater Heating Element Production for Ratchaburi Power EGAT, (agreement 2.57 The Company does not have employees specialized
Plant Contract signed on in this area while EGAT does. According to the
Ratchaburi Electricity Generating Co., Ltd. hired EGAT to produce September 21, 2006) agreement, the service fee is Baht 25.65 Million
Air Heater Heating Element for its Thermal Power Plant. (excluding VAT) which is paid in three installments
The contract will end on May 29, 2007. according the work progress, which is in line with
• As of December 31, 2006, advanced payment was normal business practice.
Baht 2.57 Million
14. Asset Purchase Agreement EGAT (agreement 2.10 According to the asset purchase agreement, EGAT
Ratchaburi Electricity Generating Co., Ltd. made a power plant signed on has to demolish and construct the wall of the TP
purchase agreement with EGAT. October 9, 2000) Fuel Oil Tank Farm. The Company, however, later
• In 2006, total income was Baht 2.10 Million considered that it was not necessary to demolish
• As of December 31, 2006, account receivable was the wall. EGAT, therefore, compensated by paying
Baht 2.10 Million expenses for future renovation if necessary at Baht
2.10 Million, which is in line with normal business
practice.
15. Land lease agreements
15.1 Land lease agreement for Power Plant construction Ratchaburi Power 9.78 Ratchaburi Power Plant has appropriate facilities
Ratchaburi Electricity Generating Co., Ltd. leases a 143-rai Co., Ltd. (agreement and infrastructure for electricity generating
plot of land to Ratchaburi Power Co., Ltd. for power plant signed on business. Annual land lease fee is Baht 10.90 Million
construction. June 7, 2004) and adjusted according to Consumer Price Index
• In 2006, total income was Baht 9.78 Million every five years, which is in line with normal
• As of December 31, 2006, advanced income received business practice.
was Baht 1.40 Million
15.2 Land lease agreement for gas station Ratchaburi Power 0.13 Ratchaburi Power Plant has appropriate facilities
Ratchaburi Electricity Generating Co., Ltd. leases 2-rai pot Co., Ltd. (agreement and infrastructure for electricity generating business.
to Ratchaburi Power Co., Ltd. for construction of a gas signed on Annual land lease fee is Baht 0.15 Million and
receiving station. October 21, 2005) adjusted according to Consumer Price Index every
• In 2006, income was Baht 0.13 Million five years, which is in line with normal business
• As of December 31, 2006, advanced income received practice.
was Baht 0.02 Million
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062 063Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
The connected transaction mentioned above have already approved by the Audit Committee and the Board of Directors of the Company.
Relationship between Parties Engaged in Connected Transaction are as follows: 1. The Company and Ratchaburi Electricity Generating Company Limited 1.1 The Company holds 99.99 percent in Ratchaburi Electricity Generating Company Limited. 1.2 Some of the Company’s executives are directors of Ratchaburi Electricity Generating Company Limited. 2. The Company and Ratchaburi Energy Company Limited 2.1 The Company holds 99.99 percent in Ratchaburi Energy Company Limited. 2.2 Some of the Company’s executives are directors of Ratchaburi Energy Company Limited. 3. The Company and Ratchaburi Gas Company Limited 3.1 The Company holds 99.99 percent in Ratchaburi Gas Company Limited. 3.2 Some of the Company’s executives are directors of Ratchaburi Gas Company Limited. 4 The Company and Ratch Udom Power Company Limited 4.1 The Company holds 99.99 percent in Ratch Udom Power Company Limited. 4.2 Some of the Company’s executives are directors of Ratch Udom Power Company Limited. 5 The Company and Ratchaburi Alliances Company Limited 5.1 Ratch Udom Power Company Limited, a subsidiary of the Company, holds 99.99 percent in Ratchauri Alliances Company Limited. 5.2 Some of the Company’s executives are directors of Ratchaburi Alliances Company Limited. 6 The Company and Tri Energy Company Limited 6.1 Ratchaburi Gas Company Limited, which is a subsidiary of the Company, holds 50.00 percent in Tri Energy Company Limited. 6.2 Some of the Company’s directors and executives are directors of Tri Energy Company Limited. 7. The Company and Ratchaburi Power Company Limited 7.1 Ratchaburi Alliances Company Limited, which is a subsidiary of the Company, owns 25 percent in Ratchaburi Power Company Limited. 7.2 Some of the Company’s executives are directors of Ratchaburi Power Company Limited. 8 The Company and EGAT 8.1 EGAT is the major shareholder owning 45 percent in the Company. 8.2 Some of EGAT’s directors and executives are directors of the Company. 9 The Company and Siam Ethanol Exports Company Limited 9.1 Ratchaburi Energy Company Limited, which is a subsidiary of the Company, holds 15 percent in Siam Ethanol Exports Company Limited. 9.2 Some of the Company’s executives are directors of Siam Ethanol Exports Company Limited. 10 The Company and SouthEast Asia Energy Limited 10.1 The Company owns 25 percent in SouthEast Asia Energy Limited. 10.2 Some of the Company’s executives are directors of SouthEast Asia Energy Limited. 11 The Company and Chubu Ratchaburi Electric Service Company Limited 11.1 The Company holds 50 percent in Chubu Ratchaburi Electric Service Company Limited. 11.2 Some of the Company’s executives are directors of Chubu Ratchaburi Electric Service Company Limited. 12 Ratchaburi Electricity Generating Company Limited and EGAT 12.1 Some of EGAT’s directors and executives are directors of Ratchaburi Electricity Generating Company Limited.
Value Connected Transaction Related parties (Million Reasons Baht) 15.3 Space rental and infrastructure service Chubu Ratchaburi 0.35 Chubu provides the power plant operation and
Ratchaburi Electricity Generating Co., Ltd. allowed Chubu Electric Services maintenance service to Ratchaburi Power Co., Ltd.
Ratchaburi Electric Services Co., Ltd. to rent 140 square Co., Ltd. (agreement at Baht 0.02 Million and infrastructure at Baht 0.01
meter space for its office. sign on Million (excluding VAT), which is similar to market
• In 2006, the income was Baht 0.35 Million 14 February 2006) price.
062 063Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
062 063Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
RATCH2006
Management Discussion& Analysis
1. Business Operation Ratchaburi Electricity Generating Holding Public Company Limited (the Company) has invested through the
subsidiaries and joint ventures to develop projects constantly such as the Nam Ngum 2 Hydro Power Plant Project with total
capacity of 615 megawatts. On May 26, 2006, the Project has signed Power Purchase Agreement with EGAT and signed
the Loan Agreement with financial institutions. The Project has been operated and expected its commercial operation in the
year 2013. Through the 25 percent shareholding in Nam Ngum 2, this project, the Company’s capacity in this plant is 153.75
megawatts.
On December 18, 2006, the Company and other project developers of Nam Ngum 3 Hydro Power Project (with total
capacity of 440 megawatts) have signed and entered into the Memorandum of Understanding (MOU) concerning the power
purchase with EGAT. The Company plans to invest in 25 percent stake of the Project, and expects to complete all agreements
within 2007. The Project will take five to six years to complete its construction before its commercial operation in the year
2013.
In addition, the Company has developed a small renewable energy power plant, the Associated Gas Power Plant
Project using a by product from crude oil production at Pratu Tao-A in Sukhothai Province, with the total capacity 1.75
megawatts. This project is expected to generate power in the year 2007. Through the 15 percent shareholding in Siam
Ethanol Exports Company Limited, the Company has developed the ongoing Project in Alcohol Manufacturing Plant in
Rayong, which has capacity of 30 million liter per year. The Project is expected to generate in the year 2007.
On July 27, 2006, TRIS Rating Company Limited (TRIS) has affirmed the Company’s rating at “AA-“ with “stable” outlook.
The “AA-“ rating of RATCH reflects reliable dividends from its wholly-owned operating of principle subsidiary, Ratchaburi
Electricity Generating Company Limited, its good quality power plant portfolio and its conservative investment policy. While
the “stable” outlook reflects an expectation that the Company will receive reliable dividend from Ratchaburi Electricity
Generating Company Limited and other power plant investments. Besides the Company is expected to maintain its
conservative investment policy. At the same time, TRIS has also affirmed the company rating of Ratchaburi Electricity
Generating Company Limited and the ratings of its senior secured debentures at “AA” with “stable” outlook which reflects its
stable cash flow from the well-designed project structures, state-of-the-art power plants, the long experience in the power
sector, and its proven record of managing power plant operations. While the “stable” outlook reflects TRIS expectation that
Ratchaburi Electricity Generating Company Limited will continue to receive stable cash flows from the Ratchaburi Power
Plant. Furthermore, the plant is expected to maintain its operational performance in line with the targets of the Power
Purchase Agreements (PPA).
1.1 Operating Performances of the year 2006
1.2 Analysis of Income
The Company’s total revenues of the year 2006 was Baht 51,848.22 million, increased from Baht 44,836.83 million in
2005 by Baht 7,011.39 million or 15.64 percent. The main reasons of this matter are as follows:
Unit : Million Baht
2006 2005 Increase % (Decrease)
Revenue 51,848 . 22 44,836 . 83 7,011 . 39 15 . 64
Cost of sales and expenses 45,742 . 18 38,770 . 47 6,971 . 71 17 . 98
Net Profit 6,106 . 04 6,066 . 36 39 . 68 0 . 65
Earning per share (Baht) 4 . 21 4 . 18 0 . 03 0 . 72
Management Discussion & Analysis
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1) The electricity sales for the year 2006 was Baht 50,372.70 million, increased by Baht 6,337.74 million or 14.39
percent from Baht 44,034.96 million of the year 2005. This main reasons comprise of :-
- Revenue received from the Energy Payment increased by Baht 6,509.82 million. This mainly was due to increase
in energy generation, resulting in higher consumption and higher prices of natural gas and fuel oil in 2006. In addition, the
rise of prices of natural gas and oil in the year 2006.
- Revenue received from the Availability Payment decreased by Baht 172.08 million. The main reason was due to
the fact that the average of Base Availability Credit (BAC) in the year 2006 was lower than the year 2005 as specified in the
Power Purchase Agreement (PPA).
2) Other income was Baht 748.03 million, increasing by Baht 318.16 million from Baht 429.86 million. The main reasons
comprise of :-
- Interest income increased Baht 271.31 million due to an increase in cash and cash equivalents and a rise in
interest rates during the year 2006.
- The management service fee increased by Baht 115.13 million due to the Company received development fee
from Ratchaburi Power Company Limited in the amount of Baht 101.33 million along with the Shareholders’ Agreement on
February 27, 2004.
3) Share of profit of joint ventures of the year 2006 were Baht 727.50 million increasing by Baht 355.49 million from
share of profit of joint ventures in the amount of Baht 372.01 million in the year 2005. The main reason is the Company
recorded share of profit of Tri Energy Company Limited increasing by Baht 366.07 million due to the share of profit of Tri
Energy Company Limited for the year 2006 recorded gain on foreign exchange in the amount of Baht 401.78 million whereas
the year 2005 recorded loss on foreign exchange in the amount of Baht 192.25 million. However, the operating income of Tri
Energy Company Limited for the year 2006 before gain on foreign exchange was lower than that of in the year 2005. The
reason was the power plant was shutdown for maintenance during the year 2006.
1.3 Analysis of Costs of Sales and Expenses
Costs and expenses of the year 2006 totalled Baht 45,742.18 million, increasing by Baht 6,971.71 million or 17.98
percent from Baht 38,770.47 million of the year 2005. The underlying reasons are as follows:
1) Costs of sales amounted to Baht 42,948.51 million, increasing by Baht 6,469.98 million or 17.74 percent from the
year 2005, This matter comprises of:
- An increase in fuel costs for the year 2006 was Baht 6,299.14 million. This mainly was due to increase in energy
generation, resulting in higher consumption and higher price of natural gas and oil in the year 2006. Fuel cost
was recorded in Energy Payment in the electricity revenues.
- The maintenance service expenses and spare part expenses in the year 2006 decreased by Baht 377.13 million
due to less maintenance service than the year 2005.
- The repair and maintenance expenses in the year 2006 increased by Baht 380.17 million due to in the year
2006 the Company recorded maintenance expenses according to the Contractual Service Agreement (CSA)
in the amount of Baht 885.70 million, higher than the repair maintenance expenses Bath 505.53 million in the
year 2005.
2) The administration expenses for the year 2006 was Baht 497.57 million, decreasing by Baht 463.44 million or 48.22
percent from Baht 961.01 million in the year 2005. The main reason was in the year 2006, there was no expense of
refinancing while in the year 2005 the expense of this transaction was Baht 466.21 million.
3) In the year 2006, the reserve for damage cost from fire cause at the Flue Gas Desulfurisation unit at Thermal Power
Plant Unit 1 on October 13, 2005 was recorded at Baht 750.24 million which was being under claim process with the
insurance company.
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4) Interest expenses for the year 2006 was Baht 1,443.75 million, increasing by Baht 234.87 million or 19.43 percent
from Baht 1,208.88 million in the year 2005 according to the average interest rates for long term loans and debentures of the
year 2006 which were 4.60 percent per annum, which is higher than the 3.50 percent per annum in the year 2005. However,
interest expenses were compensated in the Availability Payment.
2. Analysis of Financial Status 2.1 Analysis of Assets
1) The current assets increased by Baht 3,926.18 million. The main reasons are as follows:
- Trade receivable increased by Baht 2,108.44 million since sales revenue on November and December 2006 was
higher than that on November and December 2005. The mainly reason was on November and December 2006
the Power Plant was shutdown less often than in the year 2005.
In the year 2006, there was no allowance for doubtful receivables based on no overdue outstanding amounts
at the year ended. Account Receivable Turnover in the year 2006 and 2005 were 6.64 times and 6.68 times
respectively.
- An increase in cash and cash equivalents, short-term investments and long-term investments due within one
year in the amount of Baht 1,699.35 million which result from the higher working capital.
2) The non current assets decreased by Baht 1,761.67 million. The main reasons are as follows:
- Net property, plant and equipment decreased by Baht 2,328.23 million due to the depreciation of the year.
- Long-term loans to related parties was Baht 649.56 million decreased from the end of the year 2005. The main
reason was Ratchaburi Power Company Limited had repaid the Company on March 1, 2006.
- Gain/Loss Shared in joint ventures increased by Baht 950.19 million. The main reason was share of profit in Tri
Energy Company Limited, increased by the amount of Baht 616.35 million and net investment in the year 2006
of SouthEast Asia Limited, Ratchaburi Power Company Limited and Siam Ethanol Exports Company Limited
increased along with the proportional of shares of the companies in the amount of Baht 281.25 million, Baht
146.25 million and Baht 13.46 million respectively.
Unit : Million Baht
2006 2005 Increase % (Decrease)
Current Assets 22,226 . 40 18,300 . 22 3,926 . 18 21 . 45
Non Current Assets 49,878 . 65 51,640 . 32 (1,761 . 67) (3 . 41)
Total Assets 72,105 . 05 69,940 . 54 2,164 . 51 3 . 09
Unit : Million Baht
2006 2005 Increase % (Decrease)
Current Liabilities 11,009 . 62 8,943 . 22 2,066 . 40 23 . 11
Non Current Liabilities 26,400 . 03 29,507 . 95 (3,107 . 92) (10 . 53)
Total Liabilities 37,409 . 65 38,451 . 17 (1,041 . 52) (2 .71)
Shareholders’ Equity 34,695 . 40 31,489 . 37 3,206 . 03 10 . 18
Total Liabilities and Shareholders’ Equity 72,105 . 05 69,940 . 54 2,164 . 51 3 . 09
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Periods Interest Rate (%)
25 July 2005 – 24 July 2007 MLR – 2.5
25 July 2007 – 24 July 2009 MLR – 2.0
25 July 2009 – 24 July 2015 MLR – 1.5
2.2 Analysis of Liabilities and Shareholders’ Equity
1) Current Liabilities increased by Baht 2,066.40 million. This was due to trade payable increased by Baht 1,397.74
million due to higher consumption and higher price of natural gas and oil on November and December 2006 when compare
with those on November and December 2005 and the recording of reserve for damage cost from fire cause at the Flue Gas
Desulfurisation in the amount of Baht 750.24 million.
2) Non-Current Liabilities decreased by Baht 3,107.92 million. The underlying factor was the repayment of debenture
amounting Baht 2,333.24 million and long-term loan amounting Baht 509.50 million.
As at December 31,2006 Ratchaburi Electricity Generating Company Limited has long-term loans from financial
institutions in the amount of Baht 23,013.55 million, which has interest rate as follow:
And as at December 31,2006 the subsidiary issued unsubordinated and secured debentures in the amount of
Baht 6,494.40 million comprise of two Tranche. Tranche B1 has a three-year repayment period and a fixed interest rate of 3.67
percent per annum and Tranche B2 has a five-year repayment period and a fixed interest rate of 3.67 percent per annum a for
the first and second year and Minimum Lending Rate (MLR) minus 2 percent per annum throughout the remaining periods.
3) Shareholders’ Equity increased by Baht 3,206.03 million. The main reasons were as follows:
- The Company and its subsidiaries operating profit for the year 2006 amounted to Baht 6,106.04 million.
- The Company’s shareholders approved the allotment of the Company’s profit for the dividend payment for the
operating results in the second half year of 2005 in the amount of Baht 1,450 million (Baht 1.00 per share), in accordance with
the Annual General Meeting of Shareholders on April 20, 2006, which was paid on May 16, 2006.
- The Board of Directors of the Company passed the resolutions to approve the interim dividend payment for
the operating results for the first six month period of 2006 in the amount of Baht 1,450 million (Baht 1.00 per share), in
accordance with the Board of Directors’ Meeting on August 21, 2006, which was paid on September 18,2006.
2006 2005
1) Current Ratio (Times) 2.02 2.05
2) Net Profit Margin (%) 11.78 13.53
3) Return on Equity (%) 18.45 20.24
4) Return on Assets (%) 8.60 8.70
5) EBITDA (Million Baht) 10,430 10,344
6) EBITDA to Assets (%) 14.69 14.84
7) Debt to Equity (Times) 1.08 1.22
8) Debt Service Coverage Ratio (DSCR) (Times) 2.41 2.33
9) Book Value per Share (Baht) 23.93 21.72
10) Earnings per Share (Baht) 4.21 4.18
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2.3 Major Financial Ratios of the year 2006 and 2005.
3. Analysis of Cash Flows The ending balance of cash and cash equivalents of the Company and its subsidiaries as at December 31, 2006 was
Baht 3,124.49 million, which was decreased by Baht 1,263.60 million or 28.80 percent, from Baht 4,388.09 million on December
2005. The details are summarized below:
1) Net cash provided by operating activities decreased in the amount of Baht 1,288.34 million. The main reasons were
an increase in account receivable that cuts down the cash flow in the amount of Baht 2,217.00 million and account payable
that tops up the cash flow in the amount of Baht 976.04 as clarified in 2.1(1) and 2.2 (1) respectively.
2) Net cash payments from investing activities increased in the amount of Baht 4,293.81 million. The main reason
was an increase in deposits at financial institutions and short-term investments in the amount of Baht 4,483.21 million.
3) Net cash payment in financing activities decreased from the year 2005 in the amount of Baht 501.57 million.
The main reason was the repayment of long-term loans and dividend paid to shareholders had decreased in the amount
Unit :Million Baht
2006 2005 Increase % (Decrease)
Net cash receipts from operating activities 7,285 . 88 8,574 . 22 (1,288 . 34) (15 . 03)
Net cash receipts (payment in) from
investing activities (2,806 . 53) 1,487 . 28 (4,293 . 81) (288 . 70)
Net cash (payment in) from financing activities (5,742 . 95) (6,244 . 52) 501 . 57 (8 . 03)
Net increase (decrease) in cash and
cash equivalents (1,263 . 60) 3,816 . 98 (5,080 . 58) (133 . 10)
Beginning balance 4,388 . 09 571 . 11 3,816 . 98 668 . 34
Ending balance 3,124 . 49 4,388 . 09 (1,263 . 60) (28 . 80)
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068 069Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Good Corporate Governance Report
The Company’s Board of Directors has a strong commitment to implement good corporate governance in the
Company’s management with an aim to achieve sustainable growth. As a result, the Company received numerous significant
awards and recognition in 2006 as follows:
1) The Company received “Distinction in Maintaining Excellent Corporate Governance Report” at the SET Awards
2006, jointly organized by the Stock Exchange of Thailand (SET) and Money and Banking magazine, on 26 July 2006. The
award is presented to outstanding listed companies which have successfully maintained high standards for good corporate
governance report for two consecutive years. The Company was one of the 16 companies receiving this award.
2) The Company was one of the nine companies receiving the “Excellent” corporate governance practice recognition
from the Corporate Governance Report of Thai Listed Companies 2006 Program arranged by Thai Institute of Directors
Association (IOD) in cooperation with SET and the Securities and Exchange Commission (SEC). The assessment is categorized
into five levels including “Excellence”, “Very Outstanding”, “Outstanding”, “Good” and “Pass”. Data and information published on
the annual report, Form 56-1, shareholders’ meeting notice and minutes, information disclosed on the Company’s website
and through SET’s channel, and other information released to the public has been audited and scrutinized.
3) The Company participated in the assessment of the Shareholders’ Annual General Meeting arrangement,
organized by SEC, Thai Investor Promotion Association, and the Association of Listed Companies, and was given 93.14 scores
in the assessment, which is among the highest scored companies from the total 433 listed companies participating in the
program. With total score of 110, the highest score achieved by a participating company is 105 and the average score is 71.
Its subsidiary, Ratchaburi Electricity Generating Company Limited also won the “Company with Outstanding Ethical
Practice by the Thai Chamber of Commerce 2006”, which is a recognition award initiated and organized every year by the Thai
Chamber of Commerce since 2003. In 2006, there were 62 companies participating in the project and Ratchaburi Electricity
Generating Company Limited is one of the 11 companies winning the awards. The judging process involved an audit by
a judging committee comprising independent institutes including Thai Chamber of Commerce, IOD, Thailand Management
Association, and government agencies including the Revenue Department, the Business Development Department, Thai
Chamber of Commerce University, the Economic Reporters Association and the Association of Thai TV Reporters under Royal
Patronage who also represent Thai media. Judging criteria include fair treatment of employees, partners, customers, creditors
and shareholders, information disclosure and transparency, responsibility towards consumers and business partners,
integrity, ethics promotion activities, social responsibility activities, the promotion, treatment and conservation of
environment, individual freedom, risk reduction and best practice.
1. Corporate Governance Policy Since the Company’s inception in 2000, the Board of Directors has recognized the importance of consistently
managing and operating the Company with integrity and transparency. The Company has prepared business ethics
document, namely Corporate Code of Conduct, Code of Ethics for Executives and Code of Ethics for Employees, to be used as
guidelines for the Board of Directors, the management and employees at all levels. Later, when SET formulated Good
Corporate Governance Practice, the Board of Directors has taken into account the guidelines together with the six good
corporate governance principles as follows:
(1) Accountability – the commitment to successfully completing the work and being responsible for the outcome
(2) Responsibility – the intention to work at best capacity and through consistent knowledge development in order
to cope with both internal and external changes
(3) Equitable Treatment – the fair and equal treatment of all stakeholders
(4) Vision to Create Long Term Value – the proposal to create sustainable – growth of the Company
(5) Promotion of Best Practice – the foundation to support effective and efficient performances of all management
and employee
(6) Social and Environment Awareness – to be responsible for the community and environment
RATCH2006Good CorporateGovernance Report
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068 069Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
The Company Group’s Good Corporate Governance Policy was written and announced in 2003. Details are as follows:
1. Ensuring all operations and management activities comply with the Good Corporate Governance principles where
conflict of interest is carefully eliminated with integrity, good reasons, independence from all influences and within
ethical framework
2. Arranging for effective and sufficient financial and operation control, internal audit and risk management
3. Promoting and supervising to ensure correctly, timely and transparent disclosure of information and crucial
information of the Company
4. Promoting equal treatment of all shareholders according to public company limited management principles
5. Promoting and supervising to ensure proper treatment and protection of rights of stakeholders including
customers, employees, business partners, shareholders, investors, creditors, competitors, independent auditors,
governmental organizations and communities
(The Good Corporate Governance Policy is posted on the Company’s website under “Corporate Governance” section
to provide shareholders with easy access to the information)
After the policy announcement, the Company has constantly monitored and updated the policy to ensure it is in line
with good corporate governance practice generally accepted in Thailand and abroad. The Company realized that the practice
is very important to create efficient organization’s structure, operational system and process which will increase
competitiveness and long-term value for shareholders. The practice also makes strong foundation for sustainable growth
while promoting clarity and transparency and enabling the Company to operate and generate the highest possible benefits
to the Company’s stakeholders. To support effective implementation of the practice, the Company has incorporated the good
governance practice into the Company’s vision, mission and policy. The Company has established the “Good Corporate
Governance Working Group” to engage in the Company management and all employees and to act as a mechanism for
monitoring, supervising, improving, transferring policy from the top management level to operational level employees,
acknowledging problems, challenges and recommendations from employees in all level, and evaluating works to achieve the
Company’s goal. The Committee comprises executives from all divisions and is responsible for reviewing and considering
related regulations, practices and guidelines, presenting results of the study and recommendations, and implementing the
recommended solutions.
2. Shareholdersû Rights The Board of Directors realized that shareholders are the business owners who are not directly involved with the
Company’s management but authorized the Board of Directors to run the business on their behalf. The Company, therefore,
has a policy to maintain equal protection to interests and rights of all shareholders by concentrating on enabling
shareholders, who are regarded as the business owners, to receive information about the Company’s operation and to
participate in decision making process. The Company has arranged the shareholders’ meetings in accordance with legal
requirements and guidelines set by concerned authorities and agencies. The Company has a duty and responsibility to
ensure the meetings are transparent and fair as well as are in recognition to the benefits of shareholders and stakeholders as
follows:
• The Company organized the Shareholders’ Annual General Meeting once a year, and within four months after the
closing date of its accounting books. In case of urgent matter that affects or is directly involved with shareholders’ benefits or
related rules and laws and needs approval from shareholders, the Company will call an extraordinary shareholders’ meeting.
• After the Board of Directors resolved to organize a shareholders’ meeting, the Company informed the shareholders
of the date, time, place and agenda together with details via SET’s ELCID within the same day that the Board of Directors
made decision or before 9.00 a.m. of the next working day.
• The Company delivered to the shareholders the meeting notice to inform them of date, time, meeting place
together with a map, meeting agenda which is arranged according to their priority and chronology, background, reasons and
key issue of each agenda tabled for consideration or acknowledgement. The information included the Board of Directors’
opinion on each agenda to support shareholders’ decision. The Company also delivered to the shareholders the related
document including previous meeting report for the shareholders to discuss and certify, the document that the shareholders
of all types have to present to attend the meeting and meeting rules which enable the shareholders to clearly understand
including the list of attendees and voting rules. Furthermore, the Company sent to the shareholders the annual report of the
Board of Directors which contains critical information about the Company’s performance in the previous year and future
070 071Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
projects, balance sheet and profit and loss statement, proxy appointment as designed by the Department of Business
Development for the shareholders to assign a representative to attend the meeting and vote on their behalf. The Company
sent the meeting notice to the shareholders no less than 14 days prior to the meeting date. It also published the notice on
the Company’s website under the “Investors’ Information” section and advertised the meeting announcement in Thai and
English language newspapers for three consecutive days and no less than three days before the meeting.
• The Company invited shareholders to submit their questions and suggestion prior to the meeting. The Company
provided communications channel on its website by contributing one section for this activity. The shareholders can also use
other communication channels they find convenient and appropriate. The Company considered that receiving questions and
suggestions beforehand will enable the Company to prepare clearer information and additional explanation to the
shareholders.
• In the shareholders’ meetings, the Company provided convenience to the shareholders by preparing appropriate
and convenient venue where the shareholders could register two hours before the meeting time. The shareholders who
could not attend the meeting could assign other persons or the Company’s independent directors or Managing Director to
attend and vote on their behalf.
• The Company offered opportunities for the shareholders who arrived after the meeting already began to express
their opinion and vote on the agenda which was under discussion and not yet been voted.
• At the opening of the meeting, the chairman announced the quorum and declared all meeting procedures
including vote counting. During the meeting, the chairman would allow sufficient time and opened opportunities for the
shareholders to ask questions and request additional information or express their opinion openly and equally. The Company
prepared separate ballots for each agenda for each shareholder. To ensure rapid and accurate tally system, the Company used
a computerized system to tally the votes, which also increases transparency.
• To ensure transparent meeting, the chairman informed the meeting of each decision on each agenda as well as
agree, disagree and abstain votes.
• The meeting discussed and considered each agenda in the order set prior to the meeting as stated in the meeting
notice. The Company did not add urgent agenda without informing the shareholders in advance. The Company, however,
opened for other agenda (if any) to allow opportunities for the shareholders to make suggestion, express their opinion and
ask questions about the Company’s operation.
• The Company immediately informed SET the meeting resolution once the meeting was over, or no later than
9.00 a.m. of the next working day through SET’s ELCID.
• The Company usually completed the meeting report on time. The meeting report correctly and clearly stated
details, important information, resolutions and vote tally of each agenda. The report was presented to SET and the Registrar
within 14 days from the meeting date and published the report on the Company’s website under “Investors’ Information”
section for shareholders to easily review.
• For the Shareholders’ Annual General Meeting and dividend payment in the past year, the Company arranged for
the closing of the Company’s registration book twice. The Company’s registration book was first closed for shareholders to
receive the right to attend the shareholder’s meeting where the shareholders shall consider and approve annual dividend
payment. The second time was for maintaining the shareholders’ right to choose whether they wish to maintain their
shareholding status in order to receive dividend after the shareholders’ meeting has resolution on annual dividend payment.
• The Company clearly set direction for transparent operations and disclosed shareholding structure in its
subsidiaries and joint ventures. The shareholding structure is not crossed to ensure shareholder’s confidence of transparency
and that they will receive complete and fair returns. In approving connected transactions and/or significant items,
stakeholders are not allowed to vote.
• The Company has arranged for the shareholders to be treated well and equally and to receive basic rights
including the right to receive share certificates and share transfer, the right to receive correct and clear information, the right
to attend meetings and vote on important transactions, the right to choose directors to manage the Company, and the right
to receive profit sharing from the Company which comes in the form of dividend and/or other rights.
• To prevent exploitation of unpublished inside information, the Company made an announcement (dated
6 February 2000) prohibiting its directors, executives, employees, temporary staff, their spouses and children who have not
attained manhood from using unpublished inside information to buy, sell, transfer or receive the Company’s shares. The
070 071Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Company’s announcement (dated 5 February 2003) requires its executives, employees, and temporary staff to directly report
any changes in the company’s portfolio of themselves, their spouses, and children who have not attained manhood to the
Company’s managing director within three working days after the changes happen.
• The Company assigned a unit to be responsible for coordinating with and distributing information through SET
(ELCID) and other communication channels. The information disclosed included financial and non-financial information
including operating performance, financial statements and the management discussion and analysis (MD&A) every quarter
which stated the status, operating performance and future trend, etc. The information is distributed equally, fair, and correctly
to shareholders in Thailand and overseas.
• The Company’s shareholders can also contact the Company’s directly or through its website which contains
information in both Thai and English and is consistently updated.
3. Stakeholdersû Rights The Company takes into account the rights of all stakeholders. The Company’s Code of Ethics is used as guidelines for
clear and fair approaches for all groups of stakeholders. The Company’s executives and employees have acknowledged and
strictly respected the Code of Ethics which covers key practices based on scope of responsibility of all involved persons as
follows:
Shareholders:
• The Company considers continuous and sustainable growth in order to offer the highest possible long-term value
to its shareholders.
• The Company respected shareholders’ right in acquiring important information which is used for assessing the
Company’s operating performance. The Company shall disclose correct operating performance, including financial
statement, to shareholders on regular basis and according to international practice which is generally accepted in the capital
markets in Thailand and overseas.
• The Company has a policy to maintain accuracy in recording accounting items in accordance to accounting
standards and related laws. The information is audited by the internal auditors, the Audit Committee and the Company’s
independent auditors.
Business partners:
• The Company has ensured that standardized and ethical procurement process is in place under the following
principles
- There must be competition among bidders and proper and fair selection.
- Certain criteria in assessing and selecting business partners are in place.
- Agreements must be prepared properly in accordance with internationally accepted standards.
- The management and monitoring of contract are in place to ensure every condition under the agreement is
respected and to prevent corruption in every procurement procedure.
• The Company intends to strengthen and maintain sustainable relationship with business partners who have clear
objectives in terms of technical quality, value of goods, and services that are worth investment, and trust each other.
• The Company has no policy to allow its directors and employees to receive personal benefits from business
partners.
• The Company strictly follows competition rules.
• The Company shall not search for competitors’ confidential information through inappropriate or corrupted ways.
• The Company shall not make groundless accusation of its competitors.
Employees:
• The Company fairly offers appropriate benefits to employees.
• The Company provides safety both in work environment for its employees and the property of the employees and
the Company.
• The Company equally, honestly and equitably promotes, transfers, rewards or punishes employees by considering
each employee’s capability.
072 073Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
• The Company equally and consistently offers opportunities for all employees to develop their knowledge and
skills.
• The Company strictly complies with laws and regulations related to its employees.
Society and Environment
• In operating its business, the Company has a policy to take into account the environment and fully respects
relevant environmental laws and regulations.
• The Company encourages its employees to take responsibility towards the environment.
• The Company consistently and continuously exchanges knowledge and experience with other people and
organizations to ensure appropriate environmental conservation, production improvement and operations that fully address
the quality of environment.
• The Company respects local culture and tradition.
• The Company appropriately participates in various activities initiated by the communities in which it is operating.
Stakeholders can directly contact the Company or through other channels provided, including the Company’s website
which provides convenience in two-way communications, and other channels that the stakeholders find more appropriate.
4. Shareholdersû Meetings In 2006, the Company held the Shareholders’ Annual General Meeting (AGM) on April 20, 2006. The Company prepared
and sent the notification to attend AGM and its related documents 14 days before the meeting date to every shareholder
whose name appeared in the Company’s registration book on its the closing date. The Company also published an
announcement in Thai and English daily newspapers for three consecutive days and no less than three days before the
meeting date to ensure that shareholders had the opportunity to learn about the meeting schedule and agenda and had
sufficient time to study and understand all document in advance. The Company prepared related and necessary information
as well as the Board of Director’s opinion on every agenda, such as names, profile and brief information of nominees for
director election. At the beginning of the meeting, the chairman announced to the meeting names of the attending directors,
auditor and legal advisors and informed meeting and voting rules. Throughout the meeting, the Company opened
opportunity for shareholders to fully air their views and expressed their useful opinions, encouraged questions and provided
ballots for every shareholder attending the meeting for voting. Computerized system is used to tally votes. Each agenda is
consider and voted separately. The appointment of individual director and directors’ remuneration approval are considered
and voted separately. The report, which was prepared in writing, recorded important information of each agenda, including
voting result of each agenda which specified in detail the agree, disagree and abstention votes, questions, answers, opinions
and recommendations. The report was disseminated through the Company’s website within 14 days after the Shareholders’
Annual General Meeting and after the report was sent to SET in order that the shareholders can follow up and check the
information. The report was also sent to the Registrar (the Department of Business Development) for review and reference.
5. Leadership and Vision The Company’s directors have different skills, knowledge, capability and experience in many disciplines, which
enhances management efficiency. The Company’s directors, as the leader of the organization, play a key role in leading the
Company to success. The directors plan and formulate strategies and policy to increase organizational competitiveness,
which means the organizational growth, increasing long-term value to shareholders, and responsibility for all stakeholders.
With integrity and ethics, the Company’s directors are responsible for ensuring that the Company operation fully complies
with the law, related regulations and decision made in the shareholders’ meetings, and ensuring that the executives’
management and administration are in line with the Company’s goals and preset framework for the maximum benefits of
shareholders while taking into account the best benefits of society.
Each of the Company’s director realizes the responsibility towards the shareholders who are the business owners
and have the right to appoint the directors. The directors perform and take responsibility in operating the business for
the best benefits of the shareholders, or Fiduciary Duty. Their four duties are Duty of Care, Duty of Loyalty, Duty of Obedience
and Duty of disclosure.
The Company’s directors maintain independence in decision making for the best possible benefits of the Company
and its shareholders. The directors play a vital role in formulating, approving, and reviewing vision, mission, key policies,
financial goals and budget, and strategic plans, monitoring operation results of the management to regularly keep track of
072 073Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Courses Directors Chairman Director Certificate Director Accreditation Audit Finance for Non- Program Program Committee Finance Director
Mr. Cherdpong Siriwit P P P Mr. Viravat Chlayon P P Mr. Pongpayome Vasaputi
Mr. Lae Dilokvidhyarat P P P Mr. Chulasingh Vasantasingh P Mr. Panich Pongpirodom P Mr. Suchart Thada-Thamrongvech P P P P Mr. Kraisi Karnasuta P Ms. Sutharat Angchanpen P P Mr. Vinit Tangnoi P Mr. Chanin Vongkusolkit P Mr. Areepong Bhoocha-oom P Mr. Narong Sitasuwan P
business progress, providing timely advice and help in adjusting plans that may not on the right track, ensuring sufficient
internal control and regular monitoring, and providing policy on appropriate risk management which is a very important and
urgent policy that the Company has to implement and materialize. The directors approved annual key performance indices
and evaluation criteria in the beginning of the year and required performance report on regular basis for efficient
monitoring, reviewing and adjustment. By the end of the year, the indices and criteria will be used for evaluating performance
of the management and the Board of Directors, which is linked to remuneration determination. The sub-committees
including the Audit Committee, Risk Management Committee and Human Resources and Remuneration Committee also play
crucial roles in supervising and monitoring closely the management performance.
In addition to appraising the Company’s performance against the preset criteria, the Board of Directors has
implemented self assessment measures since 2002. The factors considered cover many important areas, including directors’
readiness, strategy formulation and business planning, risk management and internal control, conflict of interest prevention,
financial and performance report monitoring, the Board of Directors’ meeting and nomination of the Board of Directors and
the management. Results were used in reviewing and improving their future work process.
The Company has followed SET’s guideline which viewed that a director of a listed company should hold directorship
in no more than five listed companies. However, the present Chairman of the Board of Directors (Mr. Cherdpong Siriwit) is
a highly capable and has great experience in energy industry and therefore holds the position of Chairman of the Board in
other listed companies, including PTT Public Company Limited, PTT Exploration and Production Public Company Limited, Thai
Oil Public Company Limited, Rayong Refinery Public Company Limited, and PTT Chemical Public Company Limited, and
a director of Thai Oil Power Company Limited, all of which are subsidiaries of PTT Public Company Limited. The appointment
was for the benefit of directing all the companies under the PTT Group into the same direction. For the Managing Director,
who holds the highest position in the Company’s management, the Company has limited his directorship in other state
enterprises and listed companies to no more than five, not including subsidiaries, associated companies and joint venture
business, in order to enable him to fully perform his tasks, increase opportunities to exchange experience and strengthen
relationship with business partners and other organizations that will benefit the Company’s operations.
To assist the newly appointed directors in their assignment, the Company provided them with a summary of the
Company’s businesses, the Company Group’s structure, organizational structure, their operations, the Articles of Association,
rules and regulations, key policies, Code of Conduct and directors’ rules based on the requirements of SET and SEC.
Furthermore, to promote understanding of roles, duty and responsibility as well as necessary skills for the directors to
do their job best as the directors of a listed company, the Company has a policy to encourage the directors to participate in
seminars arranged by related organizations, such as the IOD and SET. The directors who attended trainings and seminars
organized by IOD are as follows:
074 075Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Operating a business based on full compliance with rules and regulations set by the government’s supervising
agencies is one of the Company’s crucial principles. In the Board of Directors meetings, the management prepared
information summary and presented to the Board of Directors for their acknowledgement of such announcement, rules,
regulations and memorandum, both newly written and amendment version issued by SEC and SET.
Directors and management perform duties as designated or as the status and title holder in the Company or as
seconded in any affiliates for the Company’s benefit. In case there is any lawsuit claiming due to such performance, the Legal
Department will be responsible for its defense until the case becomes final. The Company has set aside Baht 2 million a year
as a reserve for loss, including damages, cost of legal defense, fines, compensations by court’s order, civil penalties as
applicable by law or any other money which is considered punishment or warning where the Company will be liable for such
loss if the duty is duly performed as a result of his/her authority whether or not such action is taking place now or was done
in the pass unless it is a fraud or corruption which the Company shall not be responsible for any loss incurred and will
demand all expenses resulting from defending such a case from the corrupted or fraudulent directors or executive officers.
The Company also sent concerned staff to attend training course for Board of Directors Secretary, as well as other
relevant courses, organized by the IOD. This is to improve their knowledge and understanding of their responsibility that are
crucial to support the Board of Directors’ operations.
When directors need more related information, they can contact the Company’s high-level executives. The Company
also assigned the Corporate Secretary Department to coordinate and render the secretariat and administration works for the
Company’s directors.
6. Conflict of Interests With commitment to good corporate governance practice, the Company’s Board of Directors has ensured
transparency in business operations and prevented conflict of interest. To maintain transparency and prevent personal
interests, the Company’s Board of Directors have implemented guidelines prohibiting directors, executives, employees,
temporary staff, spouse and children who have not attained manhood from using the Company’s internal information, which
is important and yet not disclosed to the public, for their own or others’ interests. Anyone breaking this rule will be
disciplinarily punished.
The Audit Committee has reported to the Board of Directors every quarter about connected transactions which were
carefully reviewed based on SET’s rules and regulations. Such connected transactions are disclosed on page 58-63 of the
Annual Report and in the Form 56-1.
7. Business Ethics The Company has introduced Code of Conduct, Code of Ethics for Executives and Code of Ethics for Employees as
guidelines in its operations and actions with full concerns to the responsibility for shareholders, social and environment
responsibility, ethical practices toward customers, business partners, the Company, oneself, colleagues, supervisors,
subordinates, society and political sector. The Board of Directors is responsible for arranging a system to ensure the Company
operates in accordance with applicable law and relevant ethical practice. The code of ethics are based on the strong belief
that sustainable and successful business operations and leadership can be achieved not only through commitment to work,
technology development, efficient management and corporate good governance practice but also business ethics,
transparency, morale, responsibility for stakeholders, society and environment. (The three codes of conduct are published on
the Company’s website.)
8. Balance of Power of Non-Executive Directors The 13-member Board comprises 12 non-executive directors (including five independent directors) and one executive
director. The number of independent directors are more than one third of the entire Board. Chairman of the Board is an
independent, non-executive director and is not the same person as the Managing Director. Responsibilities of the Board
members are clearly identified, ensuring that the directors properly act as a representative of shareholders and there is
sufficient balance of power. To enhance the Board’s efficiency, the Company has set up three Sub-Committees to assist the
Board in different areas including the Audit Committee, the Human Resource and Remuneration Committee and the Risk
Management Committee. Their duties and responsibilities are published on page 34-36 of the Annual Report.
The Company highly places importance on the dependence in decision making of the Board of Directors for
maximum benefits of the Company and overall shareholders. Every director performs his/her duties with integrity and care to
protect the Company’s benefits as he/she realizes his/her status as a representative of the shareholders and the responsibility
in leading, monitoring, supervising, giving advice and assistance in the management operation.
074 075Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
To encourage the non-executive directors’ meeting, the Board of Directors provide the non-executive directors’
meeting at least once a year. In 2006, the Board organized a non-executive directors’ meeting in December 2006. The issues
discussed in the meeting include directors’ self assessment and recommendations for increasing the Board’s efficiency
namely the Board of Directors’ meeting, management supervision, sub-committee supervision, management’s report,
business plan, internal audit system and corporate performance assessment.
9. Aggregation or Segregation of Positions The Company has clearly separated responsibilities in policy formulation, supervision, and management. The
Chairman is an independent director, not the same person as the Managing Director, has no relations to the management, is
the leader and plays an important role in making decision on the Company’s policy as agreed at the Board of Directors’
meeting which considered and jointly worked with the management on business goal setting. The Chairman of the Board
leads and ensures the Board of Directors’ meeting is effective and efficient, by encouraging every director to participate in
the meeting and openly share their opinion. The Chairman supports and regularly provides advices on business operations
through the Managing Director without intervening in the management’s responsibility. The Managing Director, who holds
the highest position in the management, is responsible for routine management. Scope of responsibility of the Managing
Director and the person in charge of this position is clearly set.
The Managing Director is obliged to manage and operate the Company in compliance with the objectives, rules and
resolutions of the Board of Directors’ meeting in which independent directors participated. The Managing Director also has
the authority to manage permanent and contractual employees. In managing the Company’s business, the Managing
Director who reports to the Board of Directors has the authority to hire, appoint, punish, terminate, promote and adjust
salaries of employees and contractual staff members. This, however, is limited to the employees or contractual staff members
to whom these actions are enforced by the Board of Directors’ or the Company’s rules and regulations to be authorized and
approved by the Board of Directors. The Managing Director also has the authority to set work conditions for employees and
contractual staff members, order and announce direction for business operation which is neither contrary to the Company’s
rules and regulations nor the Board of Directors’ resolution. The Managing Director will undertake other businesses under the
Company’s rules and regulations and the Board of Director’s resolution, and sets the scope of works for employees and
contractual staff members at all levels.
In terms of outsiders-related actions and businesses, the Managing Director has the authority to take action on behalf
of and binding to the Company except for those actions and businesses that the Managing Director or any person having
conflict of interest as stakeholders or contrary party to the Company or its subsidiaries. In such case the Managing Director
may take action only under approval by the Board of Directors meeting in which independent directors attended. For this
action, the Managing Director may authorize other person to take action on his behalf, except in any business that may bind
the Company as the borrower, buyer or order maker and involves a project worth more than Baht 30 million. Any juristic act
made by the Managing Director, which violates the Company’s rules and regulations or the Board of Directors’ resolution, will
not hold the Company liable, except ratification is made by the Board of Directors.
The Managing Director has authority to approve the procurement not exceeding Baht 30 million each, and the
donation not exceeding Baht 100,000 each. The donation not exceeding Baht 300,000 each has to be proposed for approval
from the Chairman of the Board and the donation of higher value each is under the authority of the Board of Directors.
When the Managing Director is not in office or not able to perform his tasks, or when the position is vacant, the
Deputy Managing Directors will take charge as the Acting Managing Director as orderly appointed by the Board of Directors.
The Acting Managing Director has the same authority and scope of responsibility as the Managing Director except for the
authority as the member of the Board of Directors.
10. Remuneration of Directors and the Management Since 2005, the Company has set a written policy and criteria on remuneration of directors and the management in
order to ensure that the remuneration is based on the clear and appropriate criteria, method and process, in line with the
current situation, provides maximum benefits to the operations of the Company Group and motivate and retain qualified
human resources.
076 077Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Remuneration for the directors and top executives is related to the goal and performance of the Company Group,
their responsibility, and the practice in other companies in the same industry in terms of business and size. The remuneration
is also determined to motivate and retain human resources of required knowledge, capability, skills and experience that
contribute to the success of the Company Group.
The directors who are assigned to take extra responsibility, such as being appointed to Sub-Committees, will receive
additional remuneration. The executive director will receive remuneration as a director that is linked to both corporate and
the Board’s performance. The Board of Directors’ remuneration is submitted to the shareholders’ meeting for approval on
annual basis. Currently, the remuneration is classified into two types: annual bonus and meeting allowances.
Remuneration of the top management is in line with the policy and criteria set by the Board, and is considered and
reviewed by the Human Resource and Remuneration Committee based on the key performance indices set earlier. The Board
will finally approve the remuneration of the management.
As required by the SEC, the remuneration of directors and the management is revealed on page 26-27.
11. Board of Directorsû Meetings The Company annually scheduled the Board of Director’s meetings in advance. Tentatively, the meeting is organized
on the third Monday of each month. Next meeting schedule was confirmed in each meeting to ensure the directors and
management were informed of the schedule and were able to fix their schedule in order to achieve effective meetings. There
are some additional meetings as necessity occurs. Sub-Committees’ meetings are also scheduled in advance.
Meeting agenda was clearly categorized and monthly schedule was clearly prepared. The Chairman and Managing
Director, who also acted as the Secretary to the Board, jointly discussed the meeting agenda to ensure the important
activities were covered and informed the directors in advance as well as sent meeting notice to them beforehand. However,
the directors might propose other meeting agenda with 10 day advance notice. For urgent matters or any critical events that
may have direct or indirect impact on the Company, the directors were allowed to submit and propose to the meeting during
the Board of Directors’ meeting.
The Company usually sent meeting notice together with agenda and document to each of the director approximately
seven days before the meeting date so that the directors had sufficient time to study them beforehand. During the meeting,
the Chairman encouraged each director to fully express their opinion and consider each agenda carefully, as well as allowed
sufficient time for the management to provide enough information for the directors to discuss on the matter. Directors could
express their opinion openly and freely. Every director regards it is his/her duty to attend every meeting except when
necessary. Top executives are present at the Board meeting to clarify or provide additional information on the matter, which
assisted the directors in making decision and allowed the executives to observe the Board of Directors’ operations.
Each meeting lasted for two hours averagely. The Company assigned the “Corporate Secretary Department” to render
secretariat and administrative works including meeting arrangement, document preparation for the Board of Directors’
meeting and shareholders’ meetings of the Company and its subsidiaries, recording, preparing and keeping meeting minutes
of the Board’s and shareholder’s meetings for the Company and its subsidiaries, provision of information for consideration,
support, and facilitating and coordinating on any activities and administrative works of the Company’s and subsidiaries’
Board. The Board’s meeting minutes produced in writing, included complete materialized information, and was completed
within three days after the meeting. After the meeting, the concerned divisions were informed of the Board’s resolutions for
further implementation. The Company arranged proper place for keeping the meeting minutes, which can be checked,
investigated and referred to at any time.
In 2006, the Board and Sub-Committees arranged meetings as follows:
• The Board held 13 regular and special meetings
• The Audit Committee held five meetings
• The Risk Management Committee held three meetings
• The Human Resources and Remuneration Committee held four meetings
076 077Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
12. Sub-Committees The Board of Directors have set up various Sub-Committees, each of which comprises non-executive members, to
assist the Board of Directors in screening and reviewing assigned tasks to ensure accuracy and completion before submitting
to the Board for approval or concurrence as the case may be.
The Sub-Committees include
• The Audit Committee
• The Human Resources and Remuneration Committee
• The Risk Management Committee
The responsibility of each sub-committee is shown on page 34-36. Each Sub-Committee regularly reported to the
Board of Directors.
13. Internal Control and Audit It is regarded that internal control both at managerial and operational levels is very important, thus, clearly specifies
scope of responsibility and authority of the management and employees in writing to ensure sufficient internal control
which is appropriate for the Company’s business operations. The Company provides for sufficient control on the Company’s
assets and property utilization and clearly identifies scope of responsibility of every level of operational staff to create check
and balance. Accurate, systematic and timely financial reports are provided for the management and public disclosure.
Remarks: - The figure before / shows the number of meetings the director attended
- The figure behind / shows the total number of meetings held while the director was in office
- Mr. Viroj Klangboonkrong was resigned since 1 May 2006
- Mr. Panich Pongpirodom was appointed as the Company’s Director since 1 May 2006
- Mr. Kamphuy Jirararuensak and Mr. Boonchoo Direksathapon were resigned since 1 October 2006
- Mr. Pala Sookawesh and Mr. Sujarit Patchimnun were resigned since 15 November 2006
- Mr. Pongpayome Vasaputi, Mr. Lae Dilokvidhyarat, Ms. Sutharat Angchanpen, and Mr. Vinit Tangnoi were appointed the Company’s Directors since 1 December 2006
Name of Directors Board of Audit Risk Management Human Resources and Directors Committee Committee Remuneration Committee
The participation of each director at the said meetings is as follows:
Mr. Cherdpong Siriwit 13 / 13 4 / 4
Mr. Viravat Chlayon 13 / 13 5 / 5 3 / 3
Mr. Suchart Thada-Thamrongvech 13 / 13 4 / 5 1 / 1
Mr. Chulasingh Vasantasingh 10 / 13
Mr. Kraisi Karnasuta 11 / 13
Mr. Chanin Vongkusolkit 10 / 13
Mr. Areepong Bhoocha-oom 12 / 13 5 / 5 4 / 4
Mr. Narong Sitasuwan 12 / 13
Mr. Panich Pongpirodom 9 / 9 2 / 2
Mr. Pongpayome Vasaputi 1 / 1
Mr. Lae Dilokvidhyarat 0 / 1
Ms. Sutharat Angchanpen 1 /1
Mr. Vinit Tangnoi 0 / 1 0 / 1
Mr. Viroj Klangboonkrong 4 / 4 1 /1 1 / 1
Mr. Kumphuy Jirararuensak 10 / 10 2 / 2
Mr. Boonchoo Direksathapon 10 / 10 2 / 2
Mr. Pala Sookawesh 8 / 11
Mr. Sujarit Patchimnun 8 / 11
078 079Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
The Company has the Internal Audit Division which is responsible for auditing all activities to ensure that the
Company’s operation is in accordance with the policy and guidelines set by the management, and achieves the goals and
objectives.
The Company has assessed the sufficiency and appropriateness of internal control according to the COSO-Internal
Control Integrated Framework in five areas as follows:
1. Control Environment for assessing the environment or factors arranged to ensure the internal control is required
by the Company
2. Risk Assessment for analyzing risk impact and formulating measures to manage risks that may prevent the
Company from achieving its preset goal
3. Control Activities for evaluating the appropriateness of scope of responsibility and scope of authorization in
approving various activities such as procurement, expense approval and accounting record
4. Information and Communication for communicating the complete, accurate and updated information which is
sufficient for decision making
5. Monitoring to ensure that every task has been implemented and is in line with the preset procedures in order to
achieve corporate goals
In assessing the sufficiency and appropriateness of internal control system, the Company has reviewed, improved,
corrected and updated it to be proposed to the Audit Committee every year. In 2006, the assessment result indicated that the
Company has sufficient internal control system appropriate for the Company’s operations.
14. Board of Directorsû Report The Board of Directors is responsible for the consolidated financial statements of the Company and its subsidiaries
and financial information published in the annual report. The financial statements are made to the generally accepted
accounting standards in Thailand. The Company adopts proper accounting policy and consistently adheres to it, uses
thorough consideration and makes careful projection. The Company also sufficiently discloses significant information in the
financial statements.
The Board arranges for efficient internal control system, which provides reasonable confidence that the accounting
record is accurate, complete and sufficient to sustain the Company’s assets, and to unveil weakness to prevent corruption or
any significant irregularities. The Audit Committee is responsible for the quality of the financial statements and internal
control system. The Audit Committee’s opinion on this matter is published in the Audit Committee’s Report on page 86.
The Board regards that the Company’s internal control is satisfactory and can create reasonable confidence on the
financial statements credibility of the Company’s and its subsidiaries as of 31 December 2006. The Board has prepared
a report on its responsibility on financial statements as published on page 87.
15. Investorsû Relations The Board of Directors realizes that the Company’s financial and non-financial information have impact on decision of
investors and stakeholders. The Company, therefore, puts high importance to the accurate, complete, transparent and equal
disclosure of significant information through various information distribution channels of SET and the Company’s website.
The Company regularly held meetings between its management and analysts and investors to equally provide information
and address their concerns.
The Company has assigned the “Investor Relations Department” to communicate and provide information and news
on the Company’s activities to institutional investors, shareholders, analysts, concerned governmental organizations and
general public. Investors can contact the department at Tel. (66) 2978 5086-7 or at website: www.ratch.co.th or via e-mail
address: [email protected].
In 2006, the Company provided information through following activities:
• Analysts meeting to announce quarterly operating performance, allowing opportunity for analysts to meet with
the Company’s management and receive answers to their questions. Meeting document was published on the Company’s
website.
• Analysts and individual investors’ visit to Ratchaburi Power Plant, offering opportunity for them to learn about the
Company’s modern electricity generating process and efficient environment management system of the plant.
078 079Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
• Preparation of Form 56-1 and annual report (Form 56-2) for publishing through SET’s ELCID and on the Company’s
website. Annual report is sent to shareholders and those who are interested in the Company’s performance on annual basis.
16. Human Resource Responsibility The Company highly values human resources, which is a key factor enabling all operations to achieve its goal. Based
on its commitment to develop and maintain human resource in order to generate outstanding performance and sustainable
growth, the Company has formulated policy and continuously implemented efficient human resource programs. The
Company arranges organizational structure to include a department directly responsible for to human resource and gives
high importance to recruiting qualified employees to join the team. The Company has a plan to increase the capability of its
human resource in line with the Company’s business expansion. The Company promotes human resource development to
enhance their knowledge and ability, enable them to continuously create good work, and prepare them to be ready for
competition and the Company’s business direction. In addition to on-the-job training and work rotation to enhance
individual employee’s skills and capability, the Company has provided internal and external trainings and supported seminars
within and outside the country to encourage employees to work better within their scope of responsibility and with integrity
and ethical practices. The Company also supports employee career path development through systematic career
development programs.
The Company creates and promotes unique organizational culture that is embraced by the management and
employees. RATCH’s culture is as follows:
R – Respect, meaning the respect given to value and diversity of its employees and the provision of
opportunity for all to participate in the Company’s activities
A – Awareness, meaning awareness and knowledge in related areas and the thirst for knowledge which is a key
self-development factor
T – Teamwork, meaning team spirit, unity and commitment to solving problems in constructive way to achieve
mutual success
C – Creativity, meaning to have new ideas and creativity that promotes work improvement
H – Honesty, meaning to have integrity, discipline and ethics
The Company values internal communications that is crucial to create good understanding among employees. The
Company, therefore, promotes mutual learning and participation among its employees through the Intranet system and the
meeting of the Welfare Committee that represent all employees. Employees are encouraged to participate in ensuring work
excellence practice. Services and benefits are provided in accordance to the Company’s business and labor market. For
performance appraisal, clear objective is clearly and mutually set in advance by the supervisor and subordinates and used as
the guideline for performance appraisal and remuneration consideration.
In previous year, the Company has improved and implemented Human Resource Information System (HRIS)
to increase efficiency in human resource management, focusing on systematic assessment based on appropriate principles.
The Company also joined leading players in the industry in conducting a research on salary and benefit standard in
the industry and used the findings as a guideline in deciding appropriate rewards and benefits that are attractive enough
to retain qualified human resources that is in line with the Company’s performance.
080 081Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Environmental and social responsibilities are important in achieving sustainable success in our business operation.
Thus, the Company requires for all of its electricity generating plants to implement sufficient environmental protection
measures and to control possible impact from its activities in compliance to the related laws and safety regulations. In
conjunction, the development and contribution to enhance the quality of life for people living in nearby community are
implemented simultaneously.
In the past year, the Ratchaburi Power Plant, operated by the Company’s major subsidiary Ratchaburi Electricity
Generating Company Limited, has strictly followed the practice of prevention, correction and control of environmental
impact that has been set in the Ratchaburi Power Plant’s Environmental Impact Assessment Report (EIA) approved by the
National Environment Board on March 2, 1996. The Company also set its safety measures to control and prevent possible
impact as much as possible. Last year, the Company was assessed under the EMS ISO 14001 version 2004 by Det Norske
Veritas Company Limited, and, eventually, the Company has received the certification on July 14, 2006.
Environmental Management The Ratchaburi Power Plant has strictly followed the environmental impact reduction and environmental quality
monitoring plan, and regularly prepared and provided the report on such matters to the Office of the Natural Resources and
Environment Policy and Planning semiannually. Significant environmental management standards already implemented are
as follows:
• Continuous Emission Monitoring Systems (CEMs): the system collected emission sample from the end of
smokestacks at Ratchaburi Power Plant every 15 minutes to measure and keep record of carbon dioxide, nitrogen, sulfur
dioxide, carbon monoxide and dust. In the past year, the contaminated air index measured at the Ratchaburi Power Plant was
under the control limit, according to the standards specified by the ministerial announcement of the Ministry of Industry B.E.
2547 on contaminated substances emitted from electricity generating and distribution plants, and the ministerial
announcement of the Ministry of Science, Technology and Environment (B.E. 2539).
• Air Quality Measurement: The Company has installed a measuring tool at the end of each smokestack as well as
introduced Ambient Air Quality Monitoring Systems (AAQMs) by installing four permanent air quality monitoring stations in
the community near the power plant for 24-hour monitoring of sulfur dioxide, nitrogen dioxide, ozone and dust smaller than
10 micron, and dust levels. The monitoring showed that the level of pollutants, especially sulfur dioxide and nitrogen dioxide
in the air around the power plant was relatively low by the standards specified in the National Environment Board
announcements No. 10 (B.E. 2538), No. 21 (B.E 2544), and No. 24 (B.E. 2547).
• Waste Water Management: The analysis of waste water sample collected at the end of the pipes which are
approximately three kilometers from the Retention Pond No. 2 before being released to the irrigation canal (Bang Pa Canal)
shows that water quality index successfully met the Irrigation Department’s standards on waste water released to irrigation
system, the control standards on releasing waste water from industrial plant and industrial estates, and the Ministry of
Science, Technology and Environment announcement No. 23 (B.E. 2539).
• Surface Water Quality: Ratchaburi Power Plant collected water sample from four locations – Mae Klong River
at Ban Tha Rab, and three areas in Bang Pa Canal – before, after and at the Power Plant’s water release area. The water
sample was analyzed against the quality standard of surface water under the National Environment Board announcement
No. 8 (B.E. 2537). The analysis shows that the level of Dissolved Oxygen (DO) and the level of Biological Oxygen Demand
(BOD) in the four water samples varied in different seasons. As a result, the Ratchaburi Power Plant has tightened its standards
for monitoring surface water, especially for water in Bang Pa Canal. The Power Plant installed water quality measurement
tools before and after the Power Plant’s water release point, in order to continuously monitor water qualities including PH,
electricity conduction, temperature, DO and BOD levels.
• Noise Control: Ratchaburi Power Plant has measured loudness at the plant and nearby community four times
a year regularly. Noise measurement instruments have been installed to keep track of noise level 24-hours for three
consecutive days. Results shows that the noise level occurred by the power generating procedure was below 70 decibel and
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Environmental and Social Responsibilities
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the maximum noise was below 115 decibel which are within the allowed range specified in the National Environment Board
announcement No. 15 (B.E. 2540).
Safety Measures To effectively prevent and reduce possible impact, Ratchaburi Power Plant carefully formulated Safety Measures that
include planning and sparing sufficient space between buildings and facilities in the power plant area to prevent possible
accident from spreading, and installing advanced safety equipment, especially the automatic fire prevention equipment in
the area that risks of fire accident may occur while the electricity generators are operating.
Sub-systems used for fire prevention in the Power Plant are listed as follow;
• Fire alarm system: smoke and heat detectors were installed in every building within the Power Plant and
interoperate with the automatic fire distinguishing system. When the devices detect smoke and heat, they will immediately
send signal to the fire alarm and control equipment. Once there is flame, the detectors will activate the automatic fire
extinguishers. Automatic water sprinklers that have been installed around transformers will immediately sprinkle water once
receiving fire alarm signal.
• Fire prevention branches and hydrants: were installed within the electricity generating buildings and every 100
meters on roads around the buildings.
• Gas fire distinguisher: the automatic system interoperates with the fire alarm system. There are three gas fire
distinguishing systems as follows:
- Carbon Dioxide Fire Prevention System is used in emergency in front of the gas turbine unit
- The FM200 system is used at electricity system room. FM200 is an environmentally friendly gas that does not
harm the global atmosphere
- Inert gas is used when fire breaks up at generator control room.
• Foam system is located at every oil tank. The system will immediately activate when receive signal from fire alarm
system. It will inject foam under oil tank to prevent fire from spreading. Sprinklers around gas tank will also spray water to
cool down the tanks, preventing tanks from deforming and prevent fire from spreading to the nearby oil tanks.
• Water pumps and water resources is separated into two units as follows;
- Unit 1: pumping water from raw water reservoir, which has 1.6 million cubic meters of water. This will be used
for fire accident at the Combined-Cycle Power Plant.
- Unit 2: pumping water from two 8,800 cubic meter water tanks. The Unit 2 will be used in case of fire at the
Combined-Cycled Power Plant
However, in case one of the water pump units does not work, water from other area can be channeled into the fire spot.
In addition, the Ratchaburi Power Plant employs loss management system for its safety management within the
Power Plant. This includes rules for people working in the Power Plant and employees and practice guidelines for contractors
who have to work in the Power Plant area. The Company regularly train and remind its staff of safety rules that covers general
safety measure, safety measure for working in high places, safety for working in poor ventilated areas, rules on working on
high risk areas such as rules related to working with electricity system, and loading and unloading hydrogen, and chlorine
tank change, before they start to work. In 2006, the Company upgraded the high-risk work supervision measure. In addition
to strict control, the company introduced four-hour after-work monitoring system.
In case that the accident prevention equipment fails to perform and the accident starts to expand, the Ratchaburi
Power Plant has already prepared systematic emergency plan to limit and minimize possible losses. In its emergency plan, the
plant is prepared for emergency in four areas – the Thermal Power Plants area, the Combined-Cycled Power Plants area, and
another two areas surrounding production buildings and warehouse. The Ratchaburi Power Plant clearly assigns specific
person to take care of each area in case of emergency. Fire drill is held regularly on yearly basis. In 2006, the Ratchaburi Power
Plant held an internal fire drill, in cooperation with PTT Public Company Limited’s Pipe System Operation Center Region 5,
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Mueang Ratchaburi Administration’s Disaster Relief Unit, the Disaster Relief Unit of the Baan Rai District Administration in Mueang District, Ratchaburi Hospital’s Emergency Unit, and the Director of Disaster Prevention Department of Mueang District. The Company invited public and private organizations and media to observe the training and advice on improvement. The project was completed on November 8, 2006.
Social Responsibility In addition to efficient environmental management, the Company realizes its duty to build and maintain recognition from nearby community. In the past year, the Company operated two important social responsibility projects to meet with the requirement of the nearby community. The projects are successful and have made significant progress.
1. Ratchaburi Power Plant’s Community Development Project
The progress report of the project in the past one year indicated that communities around the Power Plant are stronger, have better quality of life and environment. Major progresses are as follows:
• Ratchaburirom Park Project : With an objective to make it district park, the Company has completely created two park for the community- the Tha Ruea Ratchaburirom Park located in Phang Phuai sub-district, Damnern Saduak District and Ban Rai Ratchaburirom and transferred the parks to their Sub-district Administrative Organization. Another three parks are in progress, including those in, Sam Ruean sub-district in Mueang District, Don Sai sub-district, and Ban Singh sub-district in Photharam District.
• Village Bank and Revolving Funds : In 2006, three village banks and revolving funds were established, making the total number of 24 banks. Currently, total members of the village bank and revolving funds are 3,879 persons, increasing 518 persons or 15.41 percent from the year 2005. Total fund is Baht 14,442,185 representing an increase of 53.66 percent or Baht 5,043,466.
• Community Development : The Company aims to promote skills development, enabling local residents to generate higher income. In 2006, the number of skill groups has increased from 34 to 60 groups and the number of members is now 1,484 persons. The project also built three additional career group networks , which are organic agricultural network, occupation network, and cow raiser network.
• Bang Pa Canal Conservation : The project is aimed on creating awareness on water resource development and promoting cooperation that comes in the form of management committee, comprising of representatives from the government and communities. The project participants cooperated in conducting Bang Pa Canal survey to collect information about problems and to find the best possible solutions. At present, 9 clubs were established in four sub-districts, namely Sam Ruan, Phikun Thong, Ban Rai and Phang Phuai. After all, the Bang Pa Canal Conservation Network was established, a conservation and development plan of Bang Pa Canal, district level and five conversation and development plans of Bang Pa Canal, village level have been finished and applied, and 58 surveys of the water resources have been achieved.
• Health and environment : the Company held activities to promote health knowledge to people who live in surrounding communities and encouraged community involvement in public health development. Organic and bio fertilizer has been promoted. The project also supports the study and development of garbage management, which improves the environment of the community. People have changed their garbage disposal habit. The involved communities have high awareness on environment. Participation in various activities increased by more than 100 percent.
In addition to the Ratchaburi Power Plant’s Community Development Project, the Company provided social services in other areas as follows:
• Health:
The Company arranged mobile medical and dental unit to provide service to people living around Ratchaburi Power Plant. The Company also has had a very good cooperation from private organizations in providing various free services, such as hair cut, Thai massage and eye check. In the past year, the Company also added the new eyeglasses making service to 133 elderly people who need eyeglasses but do not have financial support. People in the surrounding communities were highly satisfied with the widely recognized mobile medical and dental unit.
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• Sports:
The Company sponsor Ratchaburi Province male football team in the national tournament. The team won the Provincial League 2 and was granted the right to enter the Provincial League 1- the professional football league. Consequently, this project has promoted football development in Ratchaburi province, which is now ready to start a professional football club, which is able to welcome visiting teams to play in its home. Football development plan has been continuously prepared. People in Ratchaburi province are very proud of their male football team, which has brought pride and fame to the province and to the Company as the province main contributor and supporter.
• Education:
To promote and enhance education opportunity to children, the Company has offered scholarships to poor children with good academic record in 27 schools near the Ratchaburi Power Plant. The scholarship students have to pass the criteria that corporately set by all participating schools. In the past year, 870 scholarships were presented, including 704 scholarships of Baht 2,000 each for primary school students, and 166 scholarships of Baht 3,000 each for high school students. The Ratchaburi Governor granted an honor to present the scholarships to students.
The Company also supports the establishment of four funds for quality of life development, which are the Quality of Life Fund for Mueang District, the Quality of Life Fund for Photaram District, the Quality of Life Fund for Damnern Saduak District, and the Quality of Life Fund for Ratchaburi Province, which is responsible for the improvement of quality of life of people in six districts and one sub-district Each fund management committee is comprising of representatives from government organizations and from people in the community, in order to ensure that these funds are managed effectively for the best benefits of the people and to achieve the funds objectives. The establishments of these funds result in good public understanding of the Company’s commitment to social development and the betterment of people living in Ratchaburi province and its sincere responsibility to community development.
2. Ratchaburi Power Plant’s Pollution and Environment Problem Solving Project
The project was initiated to encourage public participation in monitoring the operations of Ratchaburi Power Plant in accordance the Company’s intention to enhance relationship between the Power Plant and its surrounding communities to live and grow together based on good understanding and recognition.
Rajabhat Institute University, Jom Bueng Village, Ratchaburi province, is the project leader conducting a project study. This institute works closely with specialists and scholars from Chulalongkorn and Mahidol universities, as independent third-party, to study on economic and social as well as scientific and technology aspects. The study covers 72 villages located within five-kilometer range from the Power Plant and seven villages outside this range. Objectives of the study are as follows:
• Collecting and studying secondary data on population, economy, problems on people living near the power plant that may arise from the power plant activities
• Collecting and analyzing sample of air, soil, water, plants and thermal infrared imagery to find the causes of problem and impact that communities are concerned with
• Studying the changes of types and numbers of insects around the power plant
• Discussing with the people in the local community and surveying their opinions about pollution problems and the Ratchaburi Power Plant
• Analyzing the relationship between scientific rationale and belief or perception about pollution of people living near the Power Plant
• Providing suggestions that are accepted by all parties
• Preparing future monitoring plan for the Power Plant operations
Key study process includes public participation and project information distribution, as well as technical hearing on the study results among specialists. The project is expected to complete in February 2007.
Moreover, Ratchaburi Electricity Generating Company Limited realizes the problem of ozone gas, thus, it has hired SECOT Company Limited to conduct survey and analyze the causes of ozone increase in Ratchaburi Province. The report will be complete in October 2007.
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Audit Committeeûs Report
The Audit Committee of the Ratchaburi Electricity Generating Holding Public Company Limited comprised of
three members. Mr. Suchart Thada-Thamrongvech is the chairman of the Audit Committee. Mr. Viravat Chlayon, and
Mr. Areepong Bhoocha-oom are audit committee members. Mr. Thoedpan Indramaha, Director of the Internal Audit
Division acts as the Committee’s secretary.
The Audit Committee members have the qualifications of independent directors as specified in the Company’s
regulation on Company Directors B.E. 2549. Under the regulation, the committee members must not be nominees of the
major shareholders in order to retain independence from major shareholders, executives and related persons, and must
not be neither senior executives nor staff or consultant receiving salary from the Company. None of the committee
members holds more than 0.5% of paid-up capital of the Company.
The Audit Committee has the responsibility as specified in the Company’s regulation on Audit Committee B.E. 2549.
In 2006, the Audit Committee held five meetings. All the Audit Committee members attended the meeting except
for the fifth meeting when Mr. Suchart Thada-Thamrongvech traveled abroad. The management of the Company and its
subsidiaries and the auditors participated in the meetings to present information, obtain opinions and suggestions that
are useful to the management of the Company. The results of each meeting were presented to the Board of Directors of
the Company and its subsidiaries for their acknowledgement. Significant activities are as follows:
• Reviewing that the internal control is sufficient and appropriate, especially in five areas including control
environment, risk assessment, control activities, information and communication measure, and monitoring. The reviews
showed that the Company and its subsidiaries have sufficient and appropriate internal control system, which provided
confidence that all business activities will achieve the objectives and goals set by the management.
• Reviewing quarterly and annual financial statements of the Company and its subsidiaries in cooperation with
the auditor prior to presentation to the Board of Directors of each company. It is confirmed that the financial statements of
the Company and its subsidiaries complied with the generally accepted accounting standards and with sufficient
disclosure.
• Reviewing the reasonableness and disclosure of connected transactions. It is found that most of the connected
transactions are long-term agreement with EGAT, which is the Company’s major shareholder. The management reported
progress and changes in these transactions to the Audit Committee every quarter.
• Reviewing the company’s compliance to securities and stock exchange and related business laws and
regulations. The result showed that business activities of the Company and its subsidiaries complied with the related laws
and regulations.
• Reviewing performance and recommendations of the Internal Audit Division, which follows the audit plan
approved by the Audit Committee. The Committee viewed that the Company and its subsidiaries have sufficient and
appropriate internal control and transparent corporate governance with no significant irregularities.
The Audit Committee agreed to propose the Board of Directors to hire PriceWaterhouse Coopers ABAS Company
Limited and appointed Miss Nangnoi Chaorentaweesap (registration no. 3044) or Mrs. Anothai Leekitwattana (registration
no. 3442), or Mr. Prasan Chuapanich (Registration no. 3051) as the auditor for the Company and its subsidiaries in 2007,
for the fourth consecutive year. The audit fee is Baht 2,233,000 (the fee in 2006 was Baht 1,771,000), which is the part of the
Company at the amount of Baht 692,200 (the fee in 2006 was Baht 478,500). The Company did not hire PriceWaterhouse
Coopers ABAS Company Limited to provide other services to the Company and its subsidiaries except for the auditing
purpose.
Mr. Suchart Thada-Thamrongvech
Chairman of the Audit Committee
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The Board of Directorsû Report on Its Responsibility to Financial Report
The Board of Director is responsible for the consolidated financial statements and the company financial statements
of Ratchaburi Electricity Holding Public Company Limited including financial information as appeared in this annual report.
The financial statements were stated in accordance with generally accepted accounting principles, applying the appropriate
accounting policies and consistently adhered with careful discretion and best estimation in the preparation. Besides,
significant information was disclosed sufficiently in the notes accompanying the financial statements for the benefit of
shareholders and investors in a transparent manner.
The Board of Directors has provided and maintained the appropriate and efficient internal control system to
reasonably ensure that the accounting data are accurate, complete, and sufficient to maintain its assets and to prevent
fraud and materially irregular operation.
In this regard, the Board of Directors has appointed the Audit Committee to review the accounting policies, the
quality of the financial reports, the internal control, and internal audit system. The opinions of the Audit Committee with
regard to the matters, which appear in the Report of the Audit Committee, are already shown in this annual report.
The consolidated financial statements and the company financial statement of the Company have been audited by
the Company’s Auditor, namely PricewaterhouseCoopers ABAS Limited. In auditing the Board of Directors provided all
relevant information and documents to enable the Auditor to examine and express his opinion in conformity with
generally accepted standards, The Auditor’s opinion, which appears in the auditor’s report, is already shown in this annual
report.
The Board of Directors is of the opinion that the overall internal control system in five areas including organizational
structure and environment, risk management, information system and communication control activities and monitoring
system of the Company is satisfactory and can bring about reasonable confidence that the consolidated financial
statements and the company financial statements of the Company for the year ending December 31,2006 are reliable and
prepared in conformity with generally accepted accounting principles and carried out accurately in accordance with law
and all relevant rules and regulations.
Cherdpong Siriwit Narong Sitasuwan
Chairman Director and Managing Director
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Auditorûs Report
To the Shareholders of Ratchaburi Electricity Generating Holding Public Company Limited
I have audited the accompanying consolidated and company balance sheets as at 31 December 2006 and 2005, and
the related consolidated and company statements of income, changes in shareholders’ equity, and cash flows for the
years then ended of Ratchaburi Electricity Generating Holding Public Company Limited and its subsidiaries, and of
Ratchaburi Electricity Generating Holding Public Company Limited, respectively. The Company’s management is
responsible for the correctness and completeness of information in these financial statements. My responsibility is
to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan
and perform the audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a
reasonable basis for my opinion.
In my opinion, the consolidated and company financial statements referred to above present fairly, in all material
respects, the consolidated and company financial position as at 31 December 2006 and 2005, and the consolidated
and company results of operations, and cash flows for the years then ended of Ratchaburi Electricity Generating
Holding Public Company Limited and its subsidiaries, and of Ratchaburi Electricity Generating Holding Public
Company Limited, respectively, in accordance with generally accepted accounting principles.
Nangnoi Charoenthaveesub
Certified Public Accountant
(Thailand) No. 3044
PricewaterhouseCoopers ABAS Limited
Bangkok
9 February 2007
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Ratchaburi Electricity Generating Holding Public Company Limited
As at 31 December 2006 and 2005
C o n s o l i d a t e d C o m p a n y
Notes 2006 2005 2006 2005 Baht Baht Baht Baht
The notes to the consolidated and company financial statements on pages 095 to 119 are an integral part of these financial statements.
ASSETS
Current Assets
Cash and cash equivalents 3 3,124,488,996 4,388,090,118 560,827,669 1,527,141,359
Short-term investments - held-to-maturity 4 7,760,363,283 4,849,496,812 6,925,564,295 3,650,000,000
Long-term investments due within one year 4 -
- Promissory notes and bills of exchange, net 281,707,147 114,446,940 - -
- Marketable securities - held-to-maturity 62,401,234 177,576,334 - -
Trade receivable from a related party 19 8,644,763,373 6,536,324,588 - -
Advances to and other receivables from
related parties 19 26,152,142 21,432,700 9,031,734 11,579,428
Spare parts and supplies, net 5 1,798,959,085 2,084,298,915 - -
Other current assets 527,561,506 128,548,731 81,536,552 38,171,609
Total Current Assets 22,226,396,766 18,300,215,138 7,576,960,250 5,226,892,396
Non-Current Assets
Long-term trade receivable from a related party 19 24,754,154 29,704,985 - -
Long-term investments 4 -
- Promissory notes and bills of exchange, net 509,819,395 276,644,969 509,819,395 -
- Marketable securities - held-to-maturity, net 119,065,766 81,480,273 100,000,000 -
Long-term loans to related parties 19 - 649,555,838 504,031,000 1,199,755,838
Long-term receivable from related parties 19 - - 3,969,121 1,217,223
Investments in subsidiaries 6 - - 25,713,492,339 25,032,680,859
Interests in joint ventures 6 3,985,924,832 3,035,731,484 321,035,003 49,699,965
Property, plant and equipment, net 7,8 45,233,230,330 47,561,454,787 40,332,970 42,993,157
Other non-current assets 5,860,608 5,749,330 5,402,854 4,745,881
Total Non-Current Assets 49,878,655,085 51,640,321,666 27,198,082,682 26,331,092,923
Total Assets 72,105,051,851 69,940,536,804 34,775,042,932 31,557,985,319
Balance Sheets
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C o n s o l i d a t e d C o m p a n y
Notes 2006 2005 2006 2005 Baht Baht Baht Baht
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Current Liabilities
Trade payable 6,185,411,188 4,896,779,093 - -
Trade payable to a related party 19 176,212,088 67,098,687 - -
Current portion of long-term loans, net 8
- Long-term loans from financial institutions 777,686,273 481,689,873 - -
- Debentures 2,330,229,831 2,330,229,831 - -
Amounts due to related parties 19 24,211,608 187,791,528 3,494,595 627,341
Other payables 187,547,730 287,003,523 - -
Unearned revenue and accrued expenses to
related parties 19 35,039,268 95,784,839 - -
Other current liabilities
- Corporate income tax payable 42,696,503 25,761,655 - -
- Value added tax payable 231,048,663 183,690,881 917,318 861,404
- Reserve for loss from fire cause 11 750,240,421 - - -
- Dividends payable 10,500,286 10,710,442 10,500,286 10,710,442
- Others 258,791,740 376,680,505 64,728,735 56,420,543
Total Current Liabilities 11,009,615,599 8,943,220,857 79,640,934 68,619,730
Non-Current Liabilities
Long-term loans, net 8
- Long-term loans from financial institutions 22,235,859,678 23,013,545,951 - -
- Debentures 4,164,174,576 6,494,404,407 - -
Total Non-Current Liabilities 26,400,034,254 29,507,950,358 - -
Total Liabilities 37,409,649,853 38,451,171,215 79,640,934 68,619,730
Shareholders’ Equity
Share capital 9
Authorised share capital 14,500,000,000 14,500,000,000 14,500,000,000 14,500,000,000
Issued and paid-up share capital 14,500,000,000 14,500,000,000 14,500,000,000 14,500,000,000
Premium on share capital 1,531,778,000 1,531,778,000 1,531,778,000 1,531,778,000
Retained earnings
Appropriated
- Legal reserve 10 1,450,000,000 1,298,771,531 1,450,000,000 1,298,771,531
Unappropriated 17,213,623,998 14,158,816,058 17,213,623,998 14,158,816,058
Total Shareholders’ Equity 34,695,401,998 31,489,365,589 34,695,401,998 31,489,365,589
Total Liabilities and Shareholders’ Equity 72,105,051,851 69,940,536,804 34,775,042,932 31,557,985,319
The notes to the consolidated and company financial statements on pages 095 to 119 are an integral part of these financial statements.
Ratchaburi Electricity Generating Holding Public Company Limited
As at 31 December 2006 and 2005
Balance Sheets
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C o n s o l i d a t e d C o m p a n y
Notes 2006 2005 2006 2005 Baht Baht Baht Baht
Sales 19 50,372,699,091 44,034,963,981 - -
Cost of sales 19 (42,948,507,121 ) (36,478,528,496 ) - -
Gross profit 7,424,191,970 7,556,435,485 - -
Administrative expenses 19 (497,564,872 ) (961,011,679 ) (256,042,028 ) (209,236,066 )
Directors’ remuneration 15 (27,028,366 ) (32,305,243 ) (19,225,799 ) (19,759,500 )
Profit (loss) from sales 6,899,598,732 6,563,118,563 (275,267,827 ) (228,995,566 )
Other income 19
- Management service income 143,193,460 28,062,131 146,180,529 29,555,792
- Interest income 549,822,282 278,509,568 378,236,963 136,802,376
- Others 55,011,013 123,291,404 490,741 3,736,913
Other expense 11.1 (750,240,421 ) - - -
Operating profit (loss) 11 6,897,385,066 6,992,981,666 249,640,406 (58,900,485 )
Share of profit of subsidiaries and joint ventures 6 727,499,223 372,010,431 5,856,396,003 6,125,257,233
Profit before interest and tax 7,624,884,289 7,364,992,097 6,106,036,409 6,066,356,748
Interest expenses (1,443,753,384 ) (1,208,882,850 ) - -
Corporate income tax 12 (75,094,496 ) (89,752,499 ) - -
Net profit for the year 6,106,036,409 6,066,356,748 6,106,036,409 6,066,356,748
Basic earnings per share 13
Net profit for the year 4.21 4.18 4.21 4.18
The notes to the consolidated and company financial statements on pages 095 to 119 are an integral part of these financial statements.
Ratchaburi Electricity Generating Holding Public Company Limited
For the years ended 31 December 2006 and 2005
Statements of Income
090 091Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
090 091Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
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092 093Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
092Ratchaburi Electricity Generating Holding Public Company Limited
C o n s o l i d a t e d C o m p a n y
Notes 2006 2005 2006 2005 Baht Baht Baht Baht
Cash flows from operating activities
Net profit for the year 6,106,036,409 6,066,356,748 6,106,036,409 6,066,356,748
Adjustments to reconcile net profit to net cash
provided by operations:
- Depreciation 7 2,710,308,660 2,640,549,605 18,646,695 26,126,551
- Allowance for obsolescence spare parts
and supplies 5 64,108,609 61,419,106 - -
- Amortisation of deferred financing fee 8 30,822,296 276,560,912 - -
- Unrealised currency exchange (gains)/losses (5,257,129 ) 98,248 52,698 -
- Share of profit of investments in subsidiaries
and joint ventures 6 (727,499,223 ) (372,010,431 ) (5,856,396,003 ) (6,125,257,233 )
- Gain on disposals of property, plant and
equipment (98,842 ) (5,736,077 ) (221,366 ) (3,472,350 )
- (Gain)/loss on write off of property,
plant and equipment (7,745,805 ) 376,119 3,067 -
- Reserve for loss from fire cause 11 750,240,421 - - -
- Others 2,196,256 2,519,857 - -
Cash flows before changes in operating assets
and liabilities 8,923,111,652 8,670,134,087 268,121,500 (36,246,284 )
Changes in operating assets and liabilities:
(excluding the effects of acquisition and disposal)
- Trade receivable from a related party (2,103,487,954 ) 113,710,034 - -
- Advances to and other receivables from
related parties (4,719,442 ) 78,822,343 (204,205 ) (8,656,528 )
- Spare parts and supplies (72,396,161 ) (538,991,309 ) - -
- Other current assets and non-current assets (471,346,326 ) (17,130,291 ) (73,348,772 ) (23,439,394 )
- Trade payable and trade payable
to a related party 1,397,745,496 103,065,767 - -
- Amounts due to related parties and
other payables (258,511,491 ) 60,135,999 2,867,254 627,341
- Unearned revenue and accrued expenses
to related parties (60,745,571 ) 57,545,471 - -
- Other current liabilities (63,771,632 ) 46,929,402 8,311,408 10,832,165
Net cash receipts from (payments in) operating
activities 7,285,878,571 8,574,221,503 205,747,185 (56,882,700 )
The notes to the consolidated and company financial statements on pages 095 to 119 are an integral part of these financial statements.
Ratchaburi Electricity Generating Holding Public Company Limited
For the years ended 31 December 2006 and 2005
Statements of Cash Flows
092 093Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
C o n s o l i d a t e d C o m p a n y
Notes 2006 2005 2006 2005 Baht Baht Baht Baht
Cash flows from investing activities Net cash payments of short-term investments (2,887,662,391 ) (2,177,419,968 ) (3,256,777,031) (1,047,686,643 ) Net cash receipts from deposits at financial institutions and short-term investments used as collateral - 3,772,965,936 - - Cash receipts from redeems of long-term investments 290,305,920 782,142,880 - - Cash payments of long-term investments (599,279,804 ) - (599,279,804) - Cash payments of long-term investments used as collateral - (127,826,100 ) - - Cash receipts from redeems of long-term investments used as collateral - 363,334,023 - - Payment of short-term loan to a related party - - (2,655,000,000 ) (35,000,000 ) Receipt from short-term loan to a related party - - 2,655,000,000 35,000,000 Acquisition of interest in joint ventures 6 - (579,035,400 ) - (53,750,000 ) Payments for additional capital of joint ventures (267,081,000 ) - (225,000,000 ) - Payments for additional paid-up of shares of joint ventures 6 (173,874,000 ) (8,970,000 ) (56,250,000 ) - Receipt from decrease in capital of a subsidiary - - 50,000,000 - Payment of long-term loan to related parties - (242,747,957 ) (143,831,000 ) (768,033,357 ) Receipts from long-term loans to related parties 649,555,838 - 839,555,838 467,885,400 Dividends received from a subsidiary and a joint venture 6 218,260,875 483,152,544 5,135,499,486 5,562,540,900 Proceeds from disposal of property, plant and equipment 3,655,512 12,090,629 3,653,912 3,793,670 Purchases of property, plant and equipment (40,408,487 ) (790,405,183 ) (19,422,120 ) (25,488,304 ) Net cash receipts from (payments in) investing activities (2,806,527,537 ) 1,487,281,404 1,728,149,281 4,139,261,666
Cash flows from financing activities Receipts from short-term loans 2,560,000,000 10,000,000,000 - - Repayments of short-term loans (2,560,000,000 ) (10,000,000,000 ) - - Receipts from long-term loans 8 - 24,251,548,733 - - Repayments of long-term loans 8 (509,502,000 ) (36,274,015,493 ) - - Receipts from issuance of debentures 8 - 9,990,000,000 - - Repayments of debentures 8 (2,333,240,000 ) (1,166,620,000 ) - - Dividends paid to shareholders (2,900,210,156 ) (3,045,432,880 ) (2,900,210,156 ) (3,045,432,880 ) Net cash payments in financing activities (5,742,952,156 ) (6,244,519,640 ) (2,900,210,156 ) (3,045,432,880 )
Net increase (decrease) in cash and cash equivalents (1,263,601,122 ) 3,816,983,267 (966,313,690 ) 1,036,946,086 Beginning balance 4,388,090,118 571,106,851 1,527,141,359 490,195,273 Ending balance 3,124,488,996 4,388,090,118 560,827,669 1,527,141,359
Cash and cash equivalents are made up as follows: - Cash on hand and deposits at financial institutions 236,387,871 403,822,540 118,281,606 177,613,364 - Short-term investments - maturity within three months 2,888,101,125 3,984,267,578 442,546,063 1,349,527,995 3,124,488,996 4,388,090,118 560,827,669 1,527,141,359
Non-cash transactions: Purchase of machinery and equipment which has not been paid - 80,176,136 - - Purchase of machinery for construction which has not been paid 10,194,770 - - - Transfer advance payments to property, plant and equipment - 400,000,000 - - Transfer of machinery and equipment to other receivable - 33,664,430 - - Transfer from spare parts and supplies to property, plant and equipment 293,627,382 - - - Transfer from other receivables to machinery and equipment 33,664,430 - - -
Supplementary information for cash flows: Interest paid 1,443,987,987 1,208,004,740 - - Tax paid 65,822,252 84,555,475 7,594,602 1,964,562
The notes to the consolidated and company financial statements on pages 095 to 119 are an integral part of these financial statements.
Ratchaburi Electricity Generating Holding Public Company Limited
For the years ended 31 December 2006 and 2005
Statements of Cash Flows
094 095Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
094 095Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
1. General information Ratchaburi Electricity Generating Holding Public Company Limited (the Company) is a public company limited, incorporated and resident in Thailand. The address of its registered office is 19 SCB Park Plaza, Tower 3 East, 20th Floor, Ratchadapisek Road, Jatujak, Jatujak, Bangkok, Thailand.
The Company is listed on the Stock Exchange of Thailand. For reporting purposes, the Company and its subsidiaries and joint ventures are referred to as the Group.
The principal business of the Group is to generate and sell electricity to Electricity Generating Authority of Thailand (EGAT) and to invest in other companies, whose objectives are equivalent or similar to the Company’s objective, which is the Power Plant business. As at 31 December 2006, the Group employs 146 people (2005: 137 people).
These consolidated and company financial statements were authorised for issue by the management on 9 February 2007.
2. Accounting policies The principal accounting policies adopted in the preparation of these consolidated and company financial statements are set out below.
2.1 Basis of preparation
The consolidated and company financial statements have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the Accounting Profession Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act B.E. 2535.
The consolidated and company financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with Thai generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses in the reported periods. Although these estimates are based on management’s best knowledge of current events and actions, actual results may differ from those estimates.
An English version of the consolidated and company financial statements have been prepared from the statutory consolidated and company financial statements that are in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language statutory consolidated and company financial statements shall prevail.
2.2 Accounting standard effective from 1 January 2007
According to the notification of Federation of Accounting Professions No.26/2549 dated on 11 October 2006 and No.32/2549 dated on 3 November 2006 relating to the amendment of TAS 44 “Consolidated financial statements and accounting for investment in subsidiaries” and TAS 45 “Accounting for investments in Associates” which require the change from the equity method of accounting to cost method of accounting for the investment in subsidiaries and associates presented in the separated financial statements. In according to the cost method of accounting, income from the investment will be recognised when dividends are declared. The notification is mandatory from 1 January 2007. The Company also applies the cost method of accounting for interest in joint venture presented in the separate financial statements.
Ratchaburi Electricity Generating Holding Public Company Limited
For the years ended 31 December 2006 and 2005
Notes to the Consolidated and Company Financial Statements
094 095Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
094 095Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
2.3 Group accounting - investments in subsidiaries, and interests in joint ventures
2.3.1 Investments in subsidiaries
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill.
Inter company transactions, balances and unrealised gains (losses) on transactions between group companies are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group.
In the Company’s separate financial statements, investments in subsidiaries are reported using the equity method of accounting.
A list of the Group’s principal subsidiaries is shown in Note 6.
2.3.2 Interests in joint ventures
The Group’s interests in jointly controlled entities are accounted for by the equity method of accounting in the consolidated and company financial statements. The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that it is attributable to the other venturers. The Group does not recognise its share of profits or losses from the joint venture that result from the Group’s purchase of assets from the joint ventures until it resells the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in the net realisable value of assets or an impairment loss, the loss is recognised immediately.
A list of the Group’s principal joint ventures is shown in Note 6.
2.4 Foreign currency translation
Items included in the financial statements of each entity in the Group are measured using Thai Baht. The consolidated and company financial statements are presented in Thai Baht.
Foreign currency transactions are translated into Thai Baht using the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated to Thai Baht at the exchange rate prevailing at the balance sheet date. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the statement of income.
2.5 Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash flows statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks, short-term highly liquid investments with original maturity of three months or less.
2.6 Trade accounts receivable
Trade accounts receivable are carried at original invoice amount less allowance for doubtful receivables based on a review of all outstanding amounts at the year end. The amount of the allowance is the difference between the carrying amount of the receivable and the amount expected to be collectible. Bad debts are written off during the year in which they are identified.
096 097Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
096 097Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
2.7 Spare parts and supplies
Spare parts and supplies are stated at cost less allowance for obsolescence. Cost is calculated based on the moving average basis. The spare parts are categorised as fuel, specific spare parts and common spare parts. Specific spare parts are used for specific plant equipment in the power plant.
The allowance for specific spare parts is calculated using the straight-line method to write off the balances of specific spare parts on hand at the year end over the remaining useful life of the power plant.
2.8 Investments
Investments other than investments in subsidiaries and interests in joint ventures are classified as held-to-maturity. The classification is dependent on the purpose for which the investments were acquired. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis. Investments with fixed maturity that the management has the intent and ability to hold to maturity are classified as held-to-maturity and are included in non-current assets, except for maturities within 12 months from the balance sheet date, which are classified as current assets.
Purchases and sales of investments are recognised on the trade date, which is the date that the Group commits to purchase or sell the investments. Cost of investment includes transaction costs. Held-to-maturity investments are carried at amortised cost using the effective rate.
A test for impairment is carried out when there is a factor indicating that an investment might be impaired. If the carrying value of the investment is higher than its recoverable amount, impairment loss is charged to the consolidated and company statements of income.
2.9 Intangible assets
2.9.1 Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary/joint venture at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of joint ventures is included in interests in joint ventures. Goodwill is amortised using the straight-line method over its estimated useful life. Goodwill is tested for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold.
2.9.2 Development expenditure
Development expenditure is recognised as an expense as incurred. Costs incurred on development projects are recognised as intangible assets when it is probable that the project will be a success considering its commercial and technological feasibility, and only if the cost can be measured reliably. Other development expenditure is recognised as an expense as incurred. Development expenditure previously recognised as an expense is not recognised as an asset in a subsequent period. Development expenditure that has been capitalised is amortised from the commencement of the commercial operation on a straight-line basis over the period of its expected benefit.
2.10 Property, plant and equipment
Property, plant and equipment are initially recorded at cost. Plant and equipment are stated at historical cost less accumulated depreciation.
Depreciation is calculated using the straight-line method to write off the cost of each asset, except for land which is considered to have an indefinite life, to their residual values over their estimated useful lives as follows:
096 097Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
096 097Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
Equipment for the Gas Turbine power plant will be depreciated when it is in use.
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.
Repair and maintenance expenses are charged to the income statement during the financial period in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset.
Repair and maintenance expenses of equipment for the operation of gas turbines in the combined cycle power plant are according to the Contractual Service Agreement for the Combined Cycle Generating of Ratchaburi Power Plant with the Consortium of General Electric International Operations Co., Inc. and GE Energy Parts, Inc. It is recorded by using the straight-line method relating to the contract period and charged to the income statement during each financial period (Note 20).
Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in operating profit.
2.11 Deferred income taxes and income taxes
The Group does not recognise income taxes payable or receivable in future periods in respect of temporary differences arising from differences between the carrying amounts and tax base of assets and liabilities in the consolidated or company financial statements.
Subsidiaries have certain promotional privileges from the Board of Investment, which include exemption of income tax as described in Note 16. Income tax presented in the consolidated and company statements of income relates to non - BOI promoted activities.
2.12 Borrowings
Borrowings are recognised initially at the fair value of proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost using the straight-line method, any difference between proceeds (net of transaction costs) and the redemption value is recognised in the statement of income over the period of the borrowings.
2.13 Employees’ benefits
The Group operates a provident fund that is a defined contribution plan, the assets of which are held in a separate trust fund and managed by fund managers. The provident fund is funded by payments from employees and by the relevant Group companies. Contributions to the provident fund are charged to the consolidated and company statements of income in the year to which they relate. The Group does not recognise liabilities in respect of employee benefit potentially payable under the Thai Labour Law.
Years
Power plant, substations and transmission system 25
Equipment for Gas Turbine power plant 5 - 25
Operating and maintenance equipment and Equipment for Wind power plant 5
Buildings and structures 5 and 20
Furniture, fixtures and office equipment 5
Vehicles 5
098 099Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
098 099Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
2.14 Revenue recognition
A subsidiary has entered into a 25-year Power Purchase Agreement with Electricity Generating Authority of Thailand (EGAT) whereby the subsidiary will deliver the Net Electrical Generation to EGAT. Revenue comprises Availability Payments and Energy Payments. Availability Payments are recognised according to the terms set out in the Power Purchase Agreement, as conditions are met essentially on a time basis of power plant operation, net amount of sales taxes and discounts. Energy Payments are calculated based on electricity delivered.
Service income is recognised on the performance of services.
Interest income is recognised on an accrual basis unless collectibility is in doubt.
Dividend income is recognised when the shareholder’s right to receive payment is established.
Revenue from sales and service within the Group are eliminated in the consolidated financial statements.
2.15 Dividends
Dividends are recorded in the consolidated and company financial statements in the period in which they are approved by the Annual Shareholders’ meeting.
2.16 Provisions
Provisions, which exclude the provisions relating to employee benefits, are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.
2.17 Segment reporting
The Group engages in the power plant business through its own operations and through investments. Management considers its activities as an integrated and complementary line of business and determines that the Group has only one major business segment. Moreover, in terms of operating locations and market areas, the Group has only one geographical segment because it operates solely in Thailand.
2.18 Comparatives
The comparative figures have been adjusted to conform with changes in presentation in the current year.
3. Cash and cash equivalents
Cash on hand 180,000 210,000 100,000 100,000
Deposits held at call with banks 236,207,871 403,612,540 118,181,606 177,513,364
Short-term investments - maturity
within three months 2,888,101,125 3,984,267,578 442,546,063 1,349,527,995
Cash and cash equivalents 3,124,488,996 4,388,090,118 560,827,669 1,527,141,359
Consolidated Company 31 December 31 December 31 December 31 December As at 2006 2005 2006 2005 Baht Baht Baht Baht
098 099Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
098 099Ratchaburi Electricity Generating Holding Public Company Limited A n n u a l R e p o r t 2 0 0 6
As at 31 December 2006, deposits held at call with banks bear interest at the rates of 0.125% to 3.50% per annum (2005: 0.125% to 2.50% per annum) and short-term investments - maturity within three months bear interest at the rates of 4.50% to 5.15% per annum (2005: 1.875% to 4.08% per annum).
4. Short-term and long-term investments - Held-to-maturity On 23 June 2005, Ratchaburi Electricity Generating Company Limited, a subsidiary, had entered into the refinancing facilities agreement. The new loan agreement does not require the subsidiary to pledge investments as collateral and to maintain cash reserves for repayment of principal and interest. However, at the Board of Director’s meeting of the subsidiary held on 11 July 2005, it has approved the policy to maintain cash reserves for repayment of principal and interest in the next quarter. As at 31 December 2006, such reserves amounting to Baht 876.17 million were included in short-term investments and long-term investments (as at 31 December 2005: Baht 940.06 million).
Short-term and long-term investments - Held-to-maturity are as follows:
Short-term investments
Time deposit receipts 3,000,000,000 4,096,000,000 3,000,000,000 3,650,000,000
Promissory notes 1,500,000,000 300,000,000 1,500,000,000 -
Bonds - 453,496,812 - -
Bills of exchange, net 3,260,363,283 - 2,425,564,295 -
Total short term investments 7,760,363,283 4,849,496,812 6,925,564,295 3,650,000,000
Long-term investments due within one year
- Promissory notes and bills of exchange 281,707,147 114,446,940 - -
- Marketable securities 62,401,234 177,576,334 - -
Total long-term investments due within one year 344,108,381 292,023,274 - -
Long-term investments, net
- Promissory notes and bills of exchange, net 509,819,395 276,644,969 509,819,395 -
- Marketable securities, net 119,065,766 81,480,273 100,000,000 -
Total long-term investments, net 628,885,161 358,125,242 609,819,395 -
Total Short-term investments and long-term
investments - Held-to-maturity 8,733,356,825 5,499,645,328 7,535,383,690 3,650,000,000
Consolidated Company 31 December 31 December 31 December 31 December As at 2006 2005 2006 2005 Baht Baht Baht Baht
As at 31 December 2006, short-term investments bear interest at the rates of 5.00% to 6.40% per annum (2005: 2.875% to 4.20% per annum) and long-term investments bear interest at the rates of 6.70% to 6.90% per
annum (2005: 2.10% to 5.81% per annum).
100Ratchaburi Electricity Generating Holding Public Company Limited
Allowance for obsolescence represents allowance against specific spare parts.
6. Investments in subsidiaries and interests in joint ventures 6.1 The Group’s principal subsidiaries and joint ventures that were incorporated as a limited company in Thailand are as follows:
Subsidiaries
Ratchaburi Electricity Generating Company Limited, a 99.99% owned subsidiary of the Company, has objective to develop and operate the Ratchaburi Power Plant comprising Thermal Generating Units and Combined Cycle Generating Units. The output is sold to EGAT under a 25-year Power Purchase Agreement.
Ratchaburi Energy Company Limited, a 99.99% owned subsidiary of the Company, has objective to develop and operate power plant including investing in the power energy business.
Ratchaburi Gas Company Limited, a 99.99% owned subsidiary of the Company, has objective to invest in the power energy business.
- Within 1 year 854,500,395 290,305,920 509,819,395 -
- Later than 1 year and not later than 5 years 117,983,820 361,323,700 100,000,000 -
- Later than 5 years - 1,341,120 - -
Total 972,484,215 652,970,740 609,819,395 -
Add Premium/(Discount) 509,327 (2,822,224 ) - -
972,993,542 650,148,516 609,819,395 -
Less Current portion (344,108,381 ) (292,023,274 ) - -
628,885,161 358,125,242 609,819,395 -
Consolidated Company 31 December 31 December 31 December 31 December As at 2006 2005 2006 2005 Baht Baht Baht Baht
The maturity of long-term investments is as follows:
5. Spare parts and supplies, net
Fuel 622,299,299 589,935,934 - -
Specific spare parts 1,303,904,225 1,231,879,704 - -
Common spare parts 94,993 1,194,883 - -
Spare parts in transit 46,159,384 370,678,601 - -
Total 1,972,457,901 2,193,689,122 - -
Less Allowance for obsolescence (173,498,816 ) (109,390,207 ) - -
Spare parts and supplies, net 1,798,959,085 2,084,298,915 - -
Consolidated Company 31 December 31 December 31 December 31 December As at 2006 2005 2006 2005 Baht Baht Baht Baht
101A n n u a l R e p o r t 2 0 0 6
Ratch Udom Power Company Limited, a 99.99% owned subsidiary of the Company, has objective to invest in the power energy business.
Ratchaburi Alliances Company Limited, a 99.99% owned subsidiary of Ratch Udom Power Company Limited, has objective to invest in the power energy business.
Joint ventures
Tri Energy Company Limited, a 50.00% owned joint venture of Ratchaburi Gas Company Limited, has objective to generate electricity for sale solely to EGAT under a 20-year Power Purchase Agreement.
Ratchaburi Power Company Limited, a 25.00% owned joint venture of Ratchaburi Alliances Company Limited, has objective to develop the 1,400-Megawatt power project, the location will be within the existing power plant complex of Ratchaburi Electricity Generating Company Limited in Ratchaburi province.
Siam Ethanol Exports Company Limited, a 15.00% owned joint venture of Ratchaburi Energy Company Limited, has objective to produce alcohol for export.
Chubu Ratchaburi Electric Services Company Limited, a 49.99% owned joint venture of the Company, has objective to provide operation and maintenance services for the gas-fired combined cycle power plant to Ratchaburi Power Co., Ltd.
SouthEast Asia Energy Limited, a 25.00% owned joint venture of the Company, has objective to operate the hydro-electric power plant project (Nam Ngum 2) in the Laos People’s Democratic Republic.
6.2 Investments in subsidiaries and interests in joint ventures are as follows:
Investments in subsidiaries - - 25,713,492 25,032,680
Interests in joint ventures 3,985,924 3,035,731 321,035 49,700
Total investments in subsidiaries
and interests in joint ventures 3,985,924 3,035,731 26,034,527 25,082,380
Consolidated Company 31 December 31 December 31 December 31 December As at 2006 2005 2006 2005 Baht Baht Baht Baht
The movements in investments in subsidiaries and interests in joint ventures can be analysed as follows:
Consolidated Company
Bahtû000 Bahtû000
For the year ended 31 December 2006
Opening book value 3,035,731 25,082,380
Payment for additional paid-up share of joint ventures 173,874 56,250
Payment for additional capital of joint ventures 267,081 225,000
Receipt from decrease in capital of a joint venture - (50,000 )
Share of profit of subsidiaries and joint ventures 727,499 5,856,396
Dividends received from a subsidiary and a joint venture (218,261 ) (5,135,499 )
Closing book value 3,985,924 26,034,527
102Ratchaburi Electricity Generating Holding Public Company Limited
Payment for additional paid-up share of joint ventures
During the year ended 31 December 2006, SouthEast Asia Energy Limited, a joint venture, called for
additional paid-up share capital. The Company paid for the additional paid-up share capital in the same proportion
as its original investment of 25.00% amounting to Baht 56.25 million
During the year ended 31 December 2006, Siam Ethanol Exports Company Limited, a joint venture, called for
additional paid-up share capital. Ratchaburi Energy Company Limited, a subsidiary, paid for the additional paid-up
share capital in the same proportion as its original investment of 15.00% amounting to Baht 13.46 million.
During the year ended 31 December 2006, Ratchaburi Power Company Limited, a joint venture, called for
additional share capital. Ratchaburi Alliances Company Limited, a subsidiary, paid for the additional paid-up share
capital in the same proportion as its original investment of 25.00% amounting to Baht 104.17 million.
Payment for additional capital of joint ventures
During the year ended 31 December 2006, Ratchaburi Power Company Limited, a joint venture, registered
additional authorised share capital from 16.65 million shares to 23.25 million shares with a par value of Baht 100 per
share and called for partial payment. Ratchaburi Alliances Company Limited, a subsidiary, paid for the additional
authorized share capital in the same proportion as its original investment of 25.00% amounting to Baht 42.08
million.
During the year ended 31 December 2006, SouthEast Asia Energy Limited, a joint venture, registered
additional authorised share capital from 40 million shares to 400 million shares with a par value of Baht 10 per share
and called for partial payment. The Company paid for the additional authorized share capital in the same proportion
as its original investment of 25.00% amounting to Baht 225 million.
Receipt from decrease in capital of a subsidiary
At the Annual Shareholders’ meeting 2005 on 21 March 2006 and the Extraordinary shareholders’ meeting 1/
2006 on 7 April 2006, of Ratchaburi Energy Company Limited, a subsidiary, passed a resolution to approve decrease
of authorised share capital from 19 million ordinary shares with a par value of Baht 10 per share to 14 million
ordinary shares with a par value of Baht 10 per share. On 17 July 2006, the subsidiary paid the amounting of Baht 50
million to Ratchaburi Electricity Generating Holding Public Company Limited, the parent company and it registered
the decreased share capital with the Ministry of Commerce on that date.
Dividends received from a subsidiary
During the year ended 31 December 2006, Ratchaburi Electricity Generating Company Limited, a subsidiary,
approved to pay additional dividends in respect of 2005 performance for 1,827.50 million shares of Baht 1.61 per
share, totalling Baht 2,942.50 million. The Company received dividends in May 2006. It also approved the payment
of interim dividends in respect of 2006 performance for 1,827.50 million shares of Baht 1.20 per share, totalling Baht
2,193 million. The Company received dividends in September 2006.
Dividends received from a joint venture
During the year ended 31 December 2006, Tri Energy Company Limited, a joint venture, paid dividends for
34.237 million shares of Baht 5.15 and Baht 7.60 per share. Ratchaburi Gas Company Limited, a subsidiary, received
dividends for its portion of 50.00% amounting to Baht 88.16 million in June 2006 and amounting to Baht 130.10
million in December 2006.
103A n n u a l R e p o r t 2 0 0 6
Company 31 December 2006
Portion of Cost Equity Business Investment Method Method Dividends % Bahtû000 Bahtû000 Bahtû000
Ratchaburi Electricity Generating Co., Ltd. Electricity generating 99.99 18,275,000 22,497,103 5,135,499
Ratchaburi Energy Co., Ltd. and its joint venture Electricity generating 99.99 140,000 90,514 -
Siam Ethanol Exports Co., Ltd. (construction phase)
and investing in power
energy business
Ratchaburi Gas Co., Ltd. and its joint venture Investing in power 99.99 1,165,903 2,931,269 -
Tri Energy Co., Ltd. energy business
Ratch Udom Power Co., Ltd. and its subsidiary Investing in power 99.99 420,900 194,606 -
Ratchaburi Alliances Co., Ltd and its joint venture energy business
Ratchaburi Power Co.,Ltd.
Chubu Ratchaburi Electric Services Company Limited Provide operation and 49.99 10,000 11,531 -
maintenance services
SouthEast Asia Energy Limited Electricity generating 25.00 325,000 309,504 -
(construction phase)
20,336,803 26,034,527 5,135,499
The principal subsidiaries and joint ventures, which are all incorporated in Thailand, are as follows:
Company 31 December 2005
Portion of Cost Equity Business Investment Method Method Dividends % Bahtû000 Bahtû000 Bahtû000
Ratchaburi Electricity Generating Co., Ltd. Electricity generating 99.99 18,275,000 22,471,866 5,562,541
Ratchaburi Energy Co., Ltd. and its joint venture Electricity generating 99.99 190,000 142,081 -
Siam Ethanol Exports Co., Ltd. (not yet operating) and
investing in power
energy business
Ratchaburi Gas Co., Ltd. and its joint venture Investing in power 99.99 1,165,903 2,124,823 -
Tri Energy Co., Ltd. energy business
Ratch Udom Power Co., Ltd. and its subsidiary Investing in power 99.99 420,900 293,910 -
Ratchaburi Alliances Co., Ltd and its joint venture energy business
Ratchaburi Power Co.,Ltd.
Chubu Ratchaburi Electric Services Company Limited Provide operation and 49.99 10,000 7,103 -
maintenance services
(not yet operating)
SouthEast Asia Energy Limited Electricity generating 25.00 43,750 42,597 -
(development phase)
20,105,553 25,082,380 5,562,541
104Ratchaburi Electricity Generating Holding Public Company Limited
The principal joint ventures, which are all incorporated in Thailand, are as follows:
Consolidated 31 December 2006
Portion of Cost Equity Business Investment Method Method Dividends % Bahtû000 Bahtû000 Bahtû000
Tri Energy Co., Ltd. Electricity generating 50.00 1,809,210 3,292,495 218,261
Ratchaburi Power Co., Ltd. Electricity generating 25.00 562,500 340,585 -
(construction phase)
Siam Ethanol Exports Co., Ltd. Produce alcohol for export 15.00 33,788 31,809 -
(construction phase)
Chubu Ratchaburi Electric Services Company Limited Provide operation and 49.99 10,000 11,531 -
maintenance services
SouthEast Asia Energy Limited Electricity generating 25.00 325,000 309,504 -
(construction phase)
2,740,498 3,985,924 218,261
Consolidated 31 December 2005
Portion of Cost Equity Business Investment Method Method Dividends % Bahtû000 Bahtû000 Bahtû000
Tri Energy Co., Ltd. Electricity generating 50.00 1,809,210 2,676,141 483,152
Ratchaburi Power Co., Ltd. Electricity generating 25.00 416,250 290,640 -
(development phase)
Siam Ethanol Exports Co., Ltd. Produce alcohol for export 15.00 20,333 19,250 -
(development phase)
Chubu Ratchaburi Electric Services Company Limited Provide operation and 49.99 10,000 7,103 -
maintenance services
(not yet operating)
SouthEast Asia Energy Limited Electricity generating 25.00 43,750 42,597 -
(development phase)
2,299,543 3,035,731 483,152
105A n n u a l R e p o r t 2 0 0 6
7 Pr
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106Ratchaburi Electricity Generating Holding Public Company Limited
8. Long-term loans, net The long-term loans are Thai Baht loans as follows:
Current portion of long-term loans from
financial institutions and debentures
Current portion of long-term loans from financial institutions 805,498,400 509,502,000 - -
Less Deferred financing fee amortised within one year (27,812,127 ) (27,812,127 ) - -
Current portion of long-term loans from financial institutions, net 777,686,273 481,689,873 - -
Current portion of unsubordinated and secured debentures 2,333,240,000 2,333,240,000 - -
Less Deferred financing fee amortised within one year (3,010,169 ) (3,010,169 ) - -
Current portion of unsubordinated and secured debentures, net 2,330,229,831 2,330,229,831 - -
Long-term loans from financial institutions
Long-term loans from financial institutions 22,437,497,600 23,242,996,000 - -
Less Deferred financing fee amortised more than one year (201,637,922 ) (229,450,049 ) - -
Long-term loans from financial institutions, net 22,235,859,678 23,013,545,951 - -
Unsubordinated and secured debentures 4,166,900,000 6,500,140,000 - -
Less Deferred financing fee amortised more than one year (2,725,424 ) (5,735,593 ) - -
Unsubordinated and secured debentures, net 4,164,174,576 6,494,404,407 - -
Total long-term loans from financial institutions and debentures 29,743,136,000 32,585,878,000 - -
Less Deferred financing fee (235,185,642 ) (266,007,938 ) - -
Total long-term loans from financial institutions and
debentures, net 29,507,950,358 32,319,870,062 - -
Consolidated Company 31 December 31 December 31 December 31 December As at 2006 2005 2006 2005 Baht Baht Baht Baht
Company
Equipment and vehicles Baht
At 31 December 2005 Cost 130,288,480 Less Accumulated depreciation (87,295,323 ) Net book value 42,993,157
Year ended 31 December 2006 Opening net book value 42,993,157 Additions 19,422,121 Disposals, net (3,435,613 ) Depreciation charge (Note 11) (18,646,695 ) Closing net book value 40,332,970
At 31 December 2006 Cost 143,697,158 Less Accumulated depreciation (103,364,188 ) Net book value 40,332,970
107A n n u a l R e p o r t 2 0 0 6
The movements in the long-term loans are as follows:
Consolidated Company
Baht Baht For the year ended 31 December 2006
Opening net book amount 32,319,870,062 -
Repayments of long-term loans (509,502,000 ) -
Repayments of debentures (2,333,240,000 ) -
Amortisation of deferred financing fee 30,822,296 -
Closing net book amount 29,507,950,358 -
The original long-term loans were secured liabilities under the Loan Agreement dated 9 October 2000 which were amended on 20 June 2002 and 27 June 2003. The long-term loans are secured over land, buildings, power plant and equipment of a subsidiary. In addition, the Power Purchase Agreement, the Asset Purchase Agreement, the Major Maintenance Agreement, insurance policies and other related agreements with the lenders had been assigned as collateral in accordance with the conditions under the Loan Agreement.
On 16 June 2005, the subsidiary entered into an underwriting agreement with four local financial institutions. Under the agreement, these four financial institutions had jointly agreed to underwrite the refinancing facilities totalling Baht 34,262 million, which comprised Tranche A long-term credit facilities of Baht 24,262 million, debenture facilities of Baht 10,000 million and Tranche C short-term credit facilities of Baht 10,000 million as temporary facilities before completion of debenture issuance to refinance the full amount of existing loans.
On 23 June 2005, such subsidiary entered into a loan agreement with six local financial institutions which comprised Tranche A long-term credit facilities of Baht 24,262 million and Tranche C short-term credit facilities of Baht 10,000 million. On 25 July 2005, the subsidiary drew down the Tranche A and Tranche C credit facilities totalling of Baht 34,262 million to repay the full amount of the existing loans. On that day the subsidiary redeemed the mortgage and pledge as collateral of land, buildings, power plant and equipment and investment in securities toward the existing loans, and mortgaged and pledged land, building, power plant and equipment as collateral in accordance with the refinancing agreement and debentures.
According to the debt restructuring, the subsidiary paid the penalty charge on prepayment of existing loans amounting to Baht 154.50 million, and write off deferred financing fee for prepayment of existing loans amounting to Baht 236.52 million, which are recorded as administrative expenses in the third quarter of 2005.
During 26 to 29 July 2005, the subsidiary issued and distributed the unsubordinated debentures, bearing the name of the holders, secured, with the debenture holder representative and principal installment repayments to the general public and institutional investors. The debenture comprised Tranche B1 of Baht 7,000 million with a three-year repayment period and a fixed interest rate of 3.67% per annum and Tranche B2 of Baht 3,000 million with a five-year repayment period and a fixed interest rate of 3.67% per annum for the first and second year and Minimum Lending Rate (MLR) minus 2 per annum throughout the remaining periods. The subsidiary used proceeds from issuing of debentures amounting to Baht 10,000 million to pay the full amount of Tranche C short-term credit facilities on 29 July 2005.
108Ratchaburi Electricity Generating Holding Public Company Limited
Periods Interest (%)
25 July 2005 - 24 July 2007 MLR - 2.5
25 July 2007 - 24 July 2009 MLR - 2.0
25 July 2009 - 24 July 2015 MLR - 1.5
9. Share capital and premium on share capital
As at 31 December 2004 1,450,000,000 14,500,000,000 1,531,778,000 16,031,778,000
Issue of shares - - - -
As at 31 December 2005 1,450,000,000 14,500,000,000 1,531,778,000 16,031,778,000
Issue of shares - - - -
As at 31 December 2006 1,450,000,000 14,500,000,000 1,531,778,000 16,031,778,000
The maturities of long-term loans are as follows:
- Within 1 year
Long-term loans from financial institutions 805,498,400 509,502,000 - -
Unsubordinated and secured debentures 2,333,240,000 2,333,240,000 - -
- Later than 1 year and not later than 5 years
Long-term loans from financial institutions 9,151,626,400 6,308,120,000 - -
Unsubordinated and secured debentures 4,166,900,000 6,500,140,000 - -
- Later than 5 years
Long-term loans from financial institutions 13,285,871,200 16,934,876,000 - -
29,743,136,000 32,585,878,000 - -
Consolidated Company 31 December 31 December 31 December 31 December As at 2006 2005 2006 2005 Baht Baht Baht Baht
As at 31 December 2006, the total authorised number of ordinary shares is 1,450,000,000 shares (31 December 2005: 1,450,000,000 shares) with a par value of Baht 10 per share (31 December 2005: Baht 10 per share).
All issued shares are fully paid.
Long-term credit facilities (Tranche A) are subject to the Minimum Lending Rate (MLR) minus margins as follows:
Premium on Number of Ordinary shares share capital Total Shares Baht Baht Baht
109A n n u a l R e p o r t 2 0 0 6
10. Legal reserve
Opening balance 1,298,771,531 995,371,531 1,298,771,531 995,371,531
Appropriation during the year 151,228,469 303,400,000 151,228,469 303,400,000
Closing balance 1,450,000,000 1,298,771,531 1,450,000,000 1,298,771,531
Consolidated Company 2006 2005 2006 2005 Baht Baht Baht Baht
Fuel costs 37,780,677,994 31,481,542,696 - -
Depreciation on property, plant and equipment (Note 7) 2,710,308,660 2,640,549,605 18,646,695 26,126,551
Service charges for operation and maintenance expenses
(Note 20) 760,785,170 726,387,969 - -
Spare parts, repair and service charges for major
maintenance 1,285,568,854 1,282,525,399 - -
Insurance premium 242,778,217 177,907,099 - -
Staff costs 155,563,710 145,551,720 98,022,121 83,000,819
Amortisation of deferred financing fee 30,822,296 40,036,717 - -
Reserve for loss from fire cause 750,240,421 - - -
Write off deferred financing fee for prepayment of
existing loans - 236,524,195 - -
Financing fee for new loans - 55,911,191 - -
Penalty charge on prepayment of existing loan - 154,500,674 - -
Consolidated Company 2006 2005 2006 2005 Baht Baht Baht Baht
11.1 Reserve for loss from fire cause
As a result of the fire at the Flue Gas Desulfurisation (FGD) unit at Thermal Power Plant Unit 1 on 13 October 2005, a subsidiary is in the process of FGD restoration. As at 31 December 2006, the process has not yet been completed. The insurance company made partial payment for the damage from the fire. A subsidiary and the insurance company are still in negotiation with respect to the insured sum from which to calculate the compensation. As at 31 December 2006, a subsidiary assessed and recorded a reserve for the loss from the fire totalling Baht 750 million.
Under the Public Companies Act B.E. 2535, the Company is required to set aside as a statutory reserve at least 5% of its net profit until the reserve is not less than 10% of the registered capital. The reserve is non-distributable.
11. Operating profit The following expenditure items have been charged in arriving at operating profit:
110Ratchaburi Electricity Generating Holding Public Company Limited
12. Corporate income tax Corporate income tax of Baht 75.09 million, which is presented in statement of income for the year ended �31 December 2006, is calculated by 30% on taxable income from non-BOI promoted activities amounting of Baht 250.31 million, see Note 17.
13. Earnings per share Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year.
Net profit attributable to shareholders (Baht) 6,106,036,409 6,066,356,748 6,106,036,409 6,066,356,748
Weighted average number of ordinary shares in issue
(share) 1,450,000,000 1,450,000,000 1,450,000,000 1,450,000,000
Basic earnings per share (Baht) 4.21 4.18 4.21 4.18
Consolidated Company 2006 2005 2006 2005
There are no dilutive potential ordinary shares in issue during the years presented.
14. Dividends At the Board of Directors’ meeting held on 21 August 2006, it was approved to pay interim dividends in respect of 2006 performance for 1,450 million shares of Baht 1.00 per share, totalling Baht 1,450 million. These dividends were paid to the shareholders in September 2006.
At the annual shareholders’ meeting held on 20 April 2006, it was approved to pay dividends in respect of 2005 performance as follows:
(a) Interim dividends for 1,450 million shares of Baht 1.00 per share, totalling Baht 1,450 million. These interim dividends were paid to shareholders in September 2005.
(b) Dividends for 1,450 million shares of Baht 1.00 per share, totalling Baht 1,450 million. These dividends were paid to shareholders in May 2006
At the annual shareholders’ meeting held on 20 April 2005, it was approved to pay dividends in respect of 2004 performance as follows:
(a) Interim dividends for 1,450 million shares of Baht 0.90 per share, totalling Baht 1,305 million. These interim dividends were paid to shareholders in October 2004.
(b) Dividends for 1,450 million shares of Baht 1.10 per share, totalling Baht 1,595 million. These dividends were paid to shareholders in May 2005
15. Directorsû remuneration Directors’ remuneration for the year ended 31 December 2006 in the consolidated and company statements of income is Baht 27.03 million and Baht 19.23 million, respectively (2005: Baht 32.30 million and Baht 19.76 million, respectively) comprises meeting fees and bonus. Expenses were approved at the Company’s Annual Shareholders’ meeting.
111A n n u a l R e p o r t 2 0 0 6
16. Provident fund The Group joined the contributory employees’ provident fund of Electricity Generating Authority of Thailand (EGAT) for their employees. Membership of the fund is on a voluntary basis. The contributions comprise the employees’ and the Group’s contribution at the same rate. The funds are managed by authorised fund managers in accordance with the Provident Fund Act B.E. 2530.
17. Promotional privileges Ratchaburi Electricity Generating Company Limited
On 22 November 2000, Ratchaburi Electricity Generating Company Limited, a subsidiary, received promotional privileges from the Office of the Board of Investment for two promotional certificates comprising Thermal Generating Power Plant and Combined Cycle Generating Power Plant. Under these privileges, the subsidiary has received exemption from certain taxes and duties as detailed in the certificates, including exemption from corporate income tax for a period of 8 years from the date of the first revenue earned (31 October 2000 for the Thermal Generating Power Plant and 18 April 2002 for the Combined Cycle Generating Power Plant). As a promoted entity, the subsidiary is required to comply with the terms and conditions as specified in the promotional certificates.
The revenues for promoted and non-promoted business activities for the years ended 31 December 2006 and 2005 are as follows:
Ratchaburi Energy Company Limited
On 29 December 2006, Ratchaburi Energy Company Limited, a subsidiary, received promotional privileges from the Office of the Board of Investment for PTO – An associated gas power plant project. Under these privileges, the subsidiary has received exemption from certain taxes and duties as detailed in the certificate, including exemption from corporate income tax for amounts not exceeding 100% of capital investment exclude cost of land and working capital, for a period of 8 years from the date of the first revenue earned. As a promoted entity, the subsidiary is required to comply with the terms and conditions as specified in the promotional certificate. As at 31 December 2006, the project is during construction phase.
18. Financial instruments Foreign Currency Risk
The Group has no significant foreign currency risk since the major business transactions of the Group are carried out in Thai Baht. In respect of currency exchange risk, which mainly relates to the purchase of spare parts and maintenance expenses in US Dollars, the Group manages its short-term exchange risk by entering into forward exchange contracts, normally of a maturity of no longer than 30 days. In addition, the pricing formula contained in the PPA with EGAT allows for the inclusion of the exchange risk factor relating to the purchase of spare parts and maintenance expenses.
2006 2005 Baht Baht
BOI promoted activities 50,398,054,150 44,035,546,576
Non BOI promoted activities 228,743,983 278,978,176
50,626,798,133 44,314,524,752
112Ratchaburi Electricity Generating Holding Public Company Limited
Trading for speculative purposes is prohibited. All derivative transactions are subject to approval by the managing director of each company before execution. Decisions on the level of risk undertaken are confined to the managing director of each company, which has established limits by transaction type and by counter party.
Credit Risk
The Group has no significant concentrations of credit risk relating to its cash and investments. The Group places its cash and investments with high quality institutions. The Group’s policy is designed to limit exposure with any one institution and to invest its excess cash in low risk investment accounts. The Group has not experienced any losses on such accounts.
The Group has no significant credit risk with any single counterparty or group counterparties as the only customer of the Group is EGAT, a State Enterprise.
Interest Rate Risk
Interest rate risk arises from the fluctuations in market interest rates, which may have a negative effect on current and future operations of the Group. Management believes that exposure to interest rate risk is minimal because the floating interest rate according to the condition in the long-term loans agreements (Note 8) is included in the availability payment as specified in the Power Purchase Agreement (Note 20). Therefore, the Group does not enter into a hedging agreement to protect against such risk.
19. Related party transactions Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with the Company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Company. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Company and close members of the family of these individuals and companies associated with these individuals also constitute related parties.
In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form.
A major shareholder of the Company is Electricity Generating Authority of Thailand (EGAT) which holds 45% of the Company’s total ordinary shares, and EGAT Employee’s Provident Fund, which holds about 0.84% of the Company’s total ordinary shares. The Company’s remaining shares are widely held.
Information regarding the Company’s subsidiaries and joint ventures is shown in Note 6.
During the year, the Group has entered into a number of transactions with related parties, the terms are agreed in the agreement. Purchases of fuel oil and electricity from EGAT are at market price.
Details of the agreements made with the related parties are shown in Note 20.
The following material transactions were carried out with related parties:
113A n n u a l R e p o r t 2 0 0 6
Consolidated Company 2006 2005 2006 2005 For the years ended 31 December Bahtû000 Bahtû000 Bahtû000 Bahtû000
(a) Sales, management service income, interest income and other income
Sales
- Electricity Generating Authority of Thailand (Note 20) 50,372,699 44,034,964 - -
Management service income
- Subsidiaries - - 3,009 1,614
- Joint ventures 143,193 28,062 143,172 27,942
Interest income
- Subsidiaries - - 31,684 21,132
- Joint ventures - 16,196 3,395 16,196
Other income
- Electricity Generating Authority of Thailand 2,100 5,723 - -
- Joint ventures 10,260 - - -
In the first quarter 2006, the Company has received development fee under the Shareholders Agreement, from a joint venture amounting to Baht 101 million. This amount included in management service income from joint ventures.
(b) Purchases of goods and services
Purchases of fuel oil
- Electricity Generating Authority of Thailand 1,549,535 1,576,939 - -
Purchases of electricity
- Electricity Generating Authority of Thailand 105,920 147,733 - -
Operation and major maintenance expenses
- Electricity Generating Authority of Thailand (Note 20) 903,139 1,041,148 - -
Restoration expenses of Flue Gas Desulphurisation
- Electricity Generating Authority of Thailand (Note 20)
(The expense was compensated by the insurance
company) 294,000 - - -
Management service expense
- A subsidiary - - 359 1,551
Consolidated Company 2006 2005 2006 2005 For the years ended 31 December Bahtû000 Bahtû000 Bahtû000 Bahtû000
114Ratchaburi Electricity Generating Holding Public Company Limited
(c) Outstanding balances arising from sales/purchases of goods and services
Outstanding trade receivable from a related party as above has the credit term within 1 month.
(d) Amounts due from/to, advances and loans to related parties
Trade receivable from a related party
- Electricity Generating Authority of Thailand 8,644,763 6,536,325 - -
Long-term trade receivable from a related party
- Electricity Generating Authority of Thailand 24,754 29,705 - -
Trade payable to a related party
- Electricity Generating Authority of Thailand 176,212 67,099 - -
Amounts due to related parties
- Electricity Generating Authority of Thailand 21,962 187,792 268 -
- A subsidiary - - 976 627
- A joint venture 2,250 - 2,250 -
24,212 187,792 3,494 627
Unearned revenue and accrued
expenses to related parties
- Electricity Generating Authority of Thailand 33,623 95,785 - -
- A joint venture 1,416 - - -
35,039 95,785 - -
Consolidated Company 31 December 31 December 31 December 31 December As at 2006 2005 2006 2005 Bahtû000 Bahtû000 Bahtû000 Bahtû000
Advances to and other receivables from related parties
- Electricity Generating Authority of Thailand 17,414 15,894 - 5,885
- Subsidiaries - - 294 167
- Joint ventures 8,738 5,539 8,738 5,528
26,152 21,433 9,032 11,580
Long-term loans to related parties
- Subsidiaries - - 504,031 550,200
- A joint venture - 649,556 - 649,556
- 649,556 504,031 1,199,756
Long-term receivable from related parties
- Subsidiaries - - 3,969 1,217
Consolidated Company 31 December 31 December 31 December 31 December As at 2006 2005 2006 2005 Bahtû000 Bahtû000 Bahtû000 Bahtû000
115A n n u a l R e p o r t 2 0 0 6
A long-term loan to Ratchaburi Gas Company Limited, a subsidiary, amounting to Baht 360.20 million is promissory note at call bearing interest at the rate of 12 months fixed deposit interest rate for juristic persons of a commercial bank plus 1 per annum. During the year 2006, interest rates are 4.25% to 6.00% per annum. (As at 31 December 2005: Baht 550.20 million bearing interest at the rate of 4.25% per annum). The Company classifies this loan and interest receivable as a long-term loan and other non-current assets, respectively because the subsidiary will repay loan and interest when it receives dividends from its joint venture, Tri Energy Company Limited.
A long-term loan to Ratch Udom Power Company Limited, a subsidiary, amounting to Baht 143.83 million is promissory note at call bearing interest at the rate of 12 months fixed deposit interest rate for juristic persons of a commercial bank plus 1 per annum. During the year 2006, interest rates are 4.75% to 6.00% per annum (As at 31 December 2005: Nil). The Company classifies this loan and interest receivable as a long-term loan and other non-current assets, respectively because Ratch Udom Power Company Limited, a subsidiary, will repay loan and interest when it receives the loan and interest settlement from Ratchaburi Alliances Company Limited.
20. Significant agreements, Commitments and contingent liabilities Company and Subsidiaries
Power Purchase Agreement with a related party
On 9 October 2000, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a 25-year Power Purchase Agreement with EGAT whereby the subsidiary will deliver the Net Electrical Generation from the Thermal Generating Units 1 and 2 and the Combined Cycle Generating Blocks 1, 2 and 3 to EGAT at the agreed condition. Under the Power Purchase Agreement (PPA), the subsidiary will receive revenue from EGAT comprising of an Availability Payment (AP) and an Energy Payment (EP).
The Availability Payment (AP) covers repayment of principal and interest of loan, equity return for shareholders, fixed expenses in operation and maintenance and administrative expenses. Expenses will be adjusted to cover the change of interest rate, Consumer Price Index and exchange rate.
The Energy Payment (EP) covers production costs comprising of fuel costs, variable costs in operation and maintenance, which will be adjusted in accordance to the fuel costs, efficiency ratio and Consumer Price Index.
Power Purchase Agreement
On 11 September 2006, Ratchaburi Energy Company Limited, a subsidiary, entered into the Power Purchase Agreement (capacity of 2 Megawatts) with Electricity Generating Authority of Thailand (EGAT) effective for one year. If any parties would like to extend this period, the extension must be notified to the other party at least 30 days before the contract period is due and this contract will be extended for another one year.
On 11 October 2005, Electricity Generating Authority of Thailand (EGAT) has notified to Ratchaburi Energy Company Limited, a subsidiary, informing that EGAT will operate the small Hydro Power Plant Project, Pasak Cholasid, and consider providing compensation only for the portion that can generate further benefit. Consequently, the Power Purchase Agreement signed between a subsidiary and EGAT on 1 February 2005 must be implicitly cancelled. On 19 December 2005, the subsidiary sent the notification letter to EGAT claiming compensation amounting to Baht 26.12 million. As at 31 December 2006, the exact amount of compensation has not been confirmed yet.
Fuel Purchase Agreements
On 27 October 2000, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a 25-year Gas Sales Agreement with PTT Public Company Limited (PTT) whereby PTT will supply natural gas to the subsidiary at an agreed quantity and price.
116Ratchaburi Electricity Generating Holding Public Company Limited
On 1 June 2004, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a 3-year Diesel
Purchase Agreement with PTT Public Company Limited (PTT) whereby PTT will supply diesel to the subsidiary at the
agreed quantity and price.
Gas Sales Agreement
On 17 January 2006, Ratchaburi Energy Company Limited, a subsidiary, entered into the Gas Sales Agreement
to purchase a byproduct from crude oil production with PTTEP Siam Company Limited and PTT Exploration and
Production Public Company Limited to use flare gas in a power plant project (capacity of 2 Megawatts) with the
initial price at Baht 26.65 per 1 million B.T.U. for eight years from the commencement of commercial operations,
currently expected to be the second quarter of 2007.
Operation and Maintenance Agreement and Other Service Agreement from a related party
On 26 October 2000, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into an
Operation and Maintenance Agreement with EGAT for a period of approximately 9 years whereby EGAT will operate
and provide maintenance services including general maintenance and major overhaul for the subsidiary. The
original operation and maintenance charge is approximately Baht 633 million per annum, adjusted by the Annual
Consumer Price Index. In addition, there is an additional charge, which is based on the actual costs incurred.
On 1 August 2002, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a Parts
Management Agreement for Gas Turbine Model MS9001FA with EGAT for a period of 12 years with an original
contract price of Baht 12 million per annum, adjusted by the annual Consumer Price Index. In addition, there is an
additional charge, based on the actual costs incurred.
Supply of Parts and Maintenance Services Agreement
On 26 September 2001, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a
Supply of Parts and Maintenance Services Agreement for the Combined Cycle Generating of Ratchaburi Power Plant
with the Consortium of General Electric International Operations Co., Inc. and GE Energy Parts, Inc. for a period of 12
years with a total contract price of US Dollars 264 million. On 29 December 2005, the Supply of Parts and
Maintenance Services Agreement was terminated and replaced by the Contractual Service Agreement dated 29
December 2005.
Contractual Service Agreement
On 29 December 2005, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a
Contractual Service Agreement for the Combined Cycle Generating of Ratchaburi Power Plant with the Consortium
of General Electric International Operations Co.,Inc. and GE Energy Parts, Inc. The agreement is effective from the
agreement date until the expiration of the operation of gas turbine of the Power Purchase Agreement in year 2027
with a total contract price of US Dollars 429 million. As at 31 December 2006, such subsidiary has outstanding
commitments amounting US Dollars 393 million
Flue Gas Desulfurisation (FGD) of Thermal Generating Unit 1 restoration contracts
On 7 February 2006, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a FGD
Main Procurement Works contracts with Mitsubishi Corporation. The total contract value is Japanese Yen 2,417
million. As at 31 December 2006, such subsidiary has commitments under this contract of approximately Japanese
Yen 517 million.
On 27 June 2006, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a FGD#1
Restoration Contract with EGAT. The total contract value is Baht 420 million. As at 31 December 2006, such subsidiary
has commitments under this contract of approximately Baht 126 million.
117A n n u a l R e p o r t 2 0 0 6
Agreement to acquire machinery and equipment and Agreement to acquire electrical equipment, construction, installation and testing
As at 31 December 2006, Ratchburi Energy Company Limited, a subsidiary, has outstanding commitment amounting to US Dollars 560,000 from acquiring machinery and equipment and amounting to Baht 8.4 million from acquiring electrical equipment, construction, installation and testing for PTO – An associated gas power plant project which is in the construction phase.
Land Lease Agreement and Common Facility Agreement
On 7 June 2004 and 21 October 2005, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into a land lease agreement with Ratchaburi Power Company Limited to let Ratchaburi Power Company Limited lease an area of 143 rais and 2 rais, respectively, in the Ratchaburi Power Plant area for a power plant project for a period of 25 years and 3 months commencing from Ratchaburi Power’s commercial operation date. In addition, on 25 November 2005, Ratchaburi Electricity Generating Company Limited, a subsidiary, entered into Common Facility Agreement with Ratchaburi Power Company Limited whereby a subsidiary will provide certain facilities, utilities, services, right to use and access rights relating to the construction, operation and maintenance of the facility to Ratchaburi Power Company Limited at the agreed condition. This agreement is effective from the agreement’s date until the expiry of the land lease agreement dated 7 June 2004.
Financial Support Agreements
According to the Sponsor Agreement dated 14 December 2005, the Company has committed to guarantee to the Lender of Ratchaburi Power Project to provide financial support for the construction of power plant in a proportion of investment of 25.00% approximately US Dollars 53.5 million, under the terms and condition of the Loan Agreement between Ratchaburi Power Company Limited, a jointly controlled entity, and the Lender of the project.
According to the Shareholders Agreement dated 27 February 2004, Ratchaburi Alliances Company Limited, a subsidiary, agrees to increase the registered capital of Ratchaburi Power Company Limited and subscribe for such new shares at a proportion of 25.00% up to the maximum aggregate amount of US Dollars 52.5 million, which is equivalent to approximately Baht 2,100 million, or inject capital until the completion of the project upon the prior approval of all shareholders.
On 26 May 2006, the Company, other shareholders and three local financial institutions entered into an Equity Contribution Agreement with SouthEast Asia Energy Co., Ltd., a joint venture, and Nam Ngum 2 Power Co., Ltd., whereby the Company was obliged to pay capital to the joint venture amounting to Baht 2,202.25 million (represent 25% of investment proportion) for the operation of the Hydro Power Plant Project - Nam Ngum 2 in Lao People’s Democratic Republic. Furthermore, the Company and other shareholders also entered into an Equity Subordinate Agreement to guarantee that the Company and other shareholders will not claim for any liabilities or receipt money from the joint venture and Nam Ngum 2 Power Co., Ltd. until the commitments mentioned in the agreement are fully complied.
On 29 September 2005, the Company and Chubu Electric Power (Thailand) Company Limited has entered into a Shareholders Agreement to set up Chubu Ratchaburi Electric Services Company Limited. The Company made the first payment of paid-up capital in October 2005 totalling amount of Baht 10 million. As of 31 December 2006, the Company has commitment to make payment for the unpaid shares amounting to Baht 10 million. In addition, under this Shareholders Agreement, should the Chubu Ratchaburi Electric Services Company Limited require additional funding exceed its registered capital, the Company agreed to provide financial support in the form of shareholder loans or guarantees to Chubu Ratchaburi Electric Services Company Limited in proportion of the Company’s shareholding of 50.00%.
118Ratchaburi Electricity Generating Holding Public Company Limited
According to the Shareholders Agreement dated 23 September 2004, Ratchaburi Energy Company Limited, a subsidiary, acquired 15.00% of the share capital of Siam Ethanol Exports Company Limited. As of 31 December 2006, the subsidiary has a commitment to make payment for the remaining unpaid share capital amounting to Baht 11.21 million.
In addition, under the Shareholders Agreement, should the Siam Ethanol Exports Company Limited require additional funding exceeding its registered capital, Ratchaburi Energy Company Limited, a subsidiary, agrees to provide financial support in the form of shareholder loans or guarantees to Siam Ethanol Exports Company Limited in proportion to Ratchaburi Energy Company Limited’s shareholding of 15.00%.
MOU-Power Purchase Agreement from Hydro Power Plant Project, Nam Ngum 3
On 18 December 2006, the Company, MDX Lao Company Limited and Marubeni Corporation Company Limited have entered into a MOU on Power Purchase Agreement from Hydro Power Plant Project, Nam Ngum3 located in Laos People’s Democratic Republic with Electricity Generating Authority of Thailand for a period of 27 years. It will be ready for commercial operation approximate in 2013, with a total capacity of 440 megawatts and a total project cost of US Dollars 708 million. Currently, it is in the negotiation of shareholders agreement with the above companies.
Guarantees
The Company has committed to guarantee to banks an amount of Baht 175 million to secure certain obligations under the Power Purchase Agreement which Ratchaburi Power Company Limited, a joint venture, has made with EGAT.
According to the guarantee agreement dated 27 December 2005, the Company, as a shareholder of Chubu Ratchaburi Electric Services Company Limited, has provided the performance guarantee to Ratchaburi Power Company Limited in respect of the service provided under the Operation and Maintenance Agreement, in a proportion of 50.00% of total contract price of the Operation and Maintenance Agreement per annum.
Letter of guarantee
As at 31 December 2006, Ratchaburi Electricity Generating Company Limited, a subsidiary, has a letter of guarantee provided by a bank in respect of electricity usage amounting to Baht 54.74 million (31 December 2005: Baht 61.44 million) and has no commitment under a letter of credit issued by a bank for the purchase of machinery (31 December 2005: Baht 13.97 million).
Pledge of share agreement
On 15 November 2005, the Board of Directors’ meeting of Ratchaburi Alliances Company Limited, a subsidiary, approved to pledge all of share certificates of Ratchaburi Power Company Limited, a joint venture, held by such subsidiary as collateral for loans from lenders of such joint venture.
Significant capital commitment of the Joint ventures
As at 31 December 2006, Ratchaburi Power Company Limited, a joint venture, has capital commitment relating to power plant construction contracts and supply contracts totalling Baht 5,087.07 million (represented 25.00% of our proportion). The construction is in process.
As at 31 December 2006, SouthEast Asia Energy Company Limited, a joint venture, has capital commitments relating to power plant construction contracts, totalling Baht 2,675.3 million and US Dollars 34.9 million (represented 25% of investment proportion), which is in construction phase.
119A n n u a l R e p o r t 2 0 0 6
Registration No. : 0107543000031
Location : 19 SCB Park Plaza, Tower 3 East, 20th Floor,
Ratchadapisek Road, Jatujak, Jatujak ,Bangkok 10900,
Thailand
Tel. (66) 2978 5000
Fax. (66) 2937 9321
Website : www.ratch.co.th
Core business : Investing in power generating companies
Registered capital : Baht 14,500 million
Paid up capital : Baht 14,500 million
Shares registrar : Thailand Securities Depository Company Limited
Stock Exchange of Thailand Building
62 Ratchadapisek Road, Klong Toey, Bangkok 10110, Thailand
Tel. (66) 2229 2800
Fax. (66) 2359 1259
Auditor : PriceWaterhouseCoopers ABAS Co., Ltd.
179/74-80 Bangkok City Tower, 15th Floor,
South Sathorn Road, Thoong Mahamek, Sathorn,
Bangkok 10120, Thailand
Tel. (66) 2286 9999, (66) 2344 1000
Fax. (66) 2286 5050, (66) 2286 0500
Legal Advisor : Siam Niti Law Office Company Limited
SCB Park Plaza, West Tower 1, 12th Fl
18 Ratchadapisek Road, Jatujak, Jatujak, Bangkok 10330,
Thailand
Tel. (66) 2937 5000
Fax. (66) 2937 5001
Ratchaburi Electricity Generating Holding Public Company Limited
RATCH2006
General Information
General Information
120Ratchaburi Electricity Generating Holding Public Company Limited
The leading private electricity generating company in the region
with a commitment to secure relationships in different areas
to continuously operate successful electricity generating business
We generate energy for the country
We create profitability and return it to the shareholders
We empower the organization with good corporate governance practice
We empower social, community, and environmental development
We empower... for sustainable growth
Ratchaburi Electricity Generating Holding Public Company Limited
The leading private electricity generating company in the region
with a commitment to secure relationships in different areas
to continuously operate successful electricity generating business
We generate energy for the country
We create profitability and return it to the shareholders
We empower the organization with good corporate governance practice
We empower social, community, and environmental development
We empower... for sustainable growth
Ratchaburi Electricity Generating Holding Public Company Limited