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Page 1: Electricity Generating : Annual Report 2011

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2011 Highlights

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

Awards and Recognition

EGCO

May 10th best listed companies in Thailand, 4th best public companies in the energy and resources sector and 5th best public company on net margin in a poll conducted by Money and Banking Magazine

July Nam Theun 2 hydropower project is voted top hydropower project of the year 2011 in a Global Energy Magazine poll.

August An excellent showcase for shareholder meeting with the full score of 100 in the quality assessment of 2011 Annual General Shareholders’ Meeting organized by the Thai Investors Association

The Lopburi Solar Project with the combined capacity of 84 MW was selected the project to honor H.M. the King’s 84th birthday anniversary on December 5, 2011. This project also won the Thai Crown Standard for being Clean Development Mechanism for general public’s benefit in accordance with the criteria of the Thailand Greenhouse Gas.

September Being selected one of the five companies for “the Corporate Social Responsibility Excellence” from the Thailand Corporate Excellence Awards 2010 hosted by Thailand Management Association, Sasin Graduate Institute of Business Administration of Chulalongkorn University and GfK MarketingWise Company Limited

December Receiving the SET Awards hosted by the Stock Exchange of Thailand (SET) and the Finance and Banking Magazine

• Top Corporate Governance Report Award

• Corporate Social Responsibility Award for listed company with the market capitalization over 10,000 million

Excellent Corporate Governance Performance in 2011 by IOD with the score of 96 and full score in three categories being the rights of shareholders, role of stakeholders and disclosure and transparency

The 55 MW solar power plant in Lopburi has started supplying electricity to EGAT.

February 21, 2012 “Board of Directors for Exemplary Practices” for 2010 - 2011, “Board with Consistent Best Practice” and “Audit Committee of the Year” in a contest organized by the Thai Institute of Directors, SET, the Thai Chamber of Commerce, the Federation of Thai Industries, the Thai Bankers’ Association, the Listed Companies Association and the Federation of Thai Capital Market Organizations

Khanom Electricity Generating Company Limited (KEGCO)

July 7 National Safety Awards for the 12th consecutive year, at the 25th National Work Safety Week by Ministry of Labor

September 14 Outstanding Establishment in the year 2010 for Achievement on Labor Relations and Welfare” for the 5 consecutive years, by Ministry of Labor

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

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EGCO Cogeneration Company Limited (EGCO Cogen)

September 22 Received “Certificate of CSR-Rayong” from governor of Rayong

Roi Et Green Company Limited (Roi Et Green)

June National Safety Awards for the second consecutive year, at the 25th National Work Safety Week by Ministry of Labor

July Certificate for Green Industry : First level - Recognition for “Green Commitment” by Ministry of Industry, demonstrating commitment to avoid any environmental impact on the community, with good communication among staffs in the company.

EGCOM Tara Company Limited (EGCOM Tara)

January 25 Certificate of Standard for Corporate Social Responsibility (CSR-DIW) B.E. 2010

September 8 Certificate for Quality of Drinking Water by Ministry of Public Health for 9 consecutive years

September 22 Certificate of Standard for Corporate Social Responsibility (CSR-DIW Continuous) B.E. 2011

November 24 Certificate of Standard for Excellent Healthy Workplace (Good Level) by Ministry of Public Health for the 5 consecutive years

Certificate of Standard for Certificate for Drugs free workplace : Excellent Level 2011 by Ministry of Labor

Business Activities

A. Incorporation/Acquisition/Business Transfer/New Investment

January EGCO has been awarded the licenses for 2010 Firm Small Power Producer Cogeneration projects from Electricity Generating Authority of Thailand (EGAT) in accordance with the resolution of the Energy Regulatory Commission. The projects are TJ Cogen, TP Cogen and SK Cogen, with installed capacity of 125 MW each.

March 1 EGCO acquired a 12.50% interest in Xayaburi Power Company Limited (Xayaburi) from CH.Karnchang Public Company Limited. Xayaburi plans to develop a 1,285 MW run-of-river hydroelectric project on the Mekong River in Laos PDR. The commercial operation date is currently scheduled for January 2019.

March 25 EGCO completed the acquisition of an additional 26.125% interest in Quezon Power (Philippines) Limited Co. (Quezon) bringing EGCO’s total ownership interest in Quezon to 52.125%. In addition, EGCO completed the acquisition of 100% of the outstanding shares of Pearl Energy Philipppines Operating Inc. (PEPOl), previously named Covanta Philippines Operating Inc. (CPOI), the entity which provides operation and maintenance services to Quezon through a long-term Operation and Maintenance Agreement.

November 25 EGCO’s wholly owned SPP projects with the combined capacity of 375 MW namely TJ Cogen, TP Cogen and SK Cogen, have entered into the firm Power Purchase Agreement for cogeneration system with Electricity Generating Authority of Thailand.

December 22 55 MW solar power plant in Lopburi has started supplying electricity to EGAT on December 22, 2011.

B. Accreditation of Standard Systems

Rayong Power Plant

June 24 Passing surveillance audit for ISO 9001:2008 by TUV NORD

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July 26 - 28 Passing surveillance audit for ISO14001:2004 and TIS 18001:2542 and OHSAS 18001:2007 by MASCI (Management System Certification Institute - Thailand)

KEGCO

April 25 - 26 Passing re-certificate audits for ISO 9001:2008 (Quality Management), TIS 18001:1999 & OHSAS 18001:2007 (Occupational Health and Safety Management), and ISO14001:2004 (Environmental Management) by TUV NORD

August 31 Passing surveillance audit for ISO 9001:2008 by TUV NORD

EGCOM Tara

February 4 Passing surveillance audit no. 1 for ISO 9001:2008 and ISO14001:2004 by United Registrar of Systems (Thailand) Limited (URS : UKAS)

February 11 Certificate of Standard for OHSAS 18001:2007 and TIS 18001:1999 by United Registrar of Systems (Thailand) Limited (URS : UKAS)

April 27 Certificate of Standard for TIS 17025-2543 & ISO/IEC 17025-2005 by Thai Industrial Standards Institute (TISI)

August 18 Passing surveillance audit no. 2 for ISO 9001:2008 / ISO14001:2004 and OHSAS 18001:2007 & TIS 18001:1999 by United Registrar of Systems (Thailand) Limited (URS : UKAS)

Roi Et Green

December 21 Passing 2nd surveillance audit for ISO 9001:2008 by Moody International Certification Group

Activities for Shareholders and Investors

A. Shareholders’ Meeting

April 21 2011 Annual General Shareholders’ Meeting

May 4 2010 Final Dividend Payment at 2.75 baht per share

September 16 2011 Interim Dividend Payment at 2.50 baht per share

B. Opportunity Day/Analyst Meeting

March 2 Opportunity Day/Analyst Meeting No. 1/2011 to announce 2010 annual performance

May 19 Opportunity Day/Analyst Meeting No. 2/2011 to announce 2011’s first quarter performance

August 16 Opportunity Day/Analyst Meeting No. 3/2011 to announce 2011’s second quarter performance

November 21 Opportunity Day/Analyst Meeting No. 4/2011 to announce 2011’s third quarter performance

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

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C. Investor Meeting

February 23 - 25 Non-Deal Roadshow for institutional investors in Hong Kong by Nomura Securities

March 17 - 18 JP Morgan’s Thailand Conference in Bangkok by JP Morgan Securities

March 28 - 30 Thailand Focus 2011 in Bangkok by SET & Phatra Securities

May 26 TISCO Corporate Day at TISCO Building by Tisco Securities

July 7 The Pulse of Asia Conference in Singapore by DBS Vickers Securities

D. Knowledge Sharing and Site Visit

January 13 - 15 Site Visit to a One Watershed Forest, One Energy Source project in Chiangmai

January 24 Newsletter to Shareholders & Investors

June 8 Site Visit to Kaeng Khoi 2 Power Plant in Saraburi Province

August 10 Solar Power Plant Briefing & Site visit in Lopburi Province

September 12 - 15 Site Visit to a One Watershed Forest, One Energy Source project in Chiang mai

September 19 Newsletter to Shareholders & Investors

December 29 Newsletter to Shareholders & Investors

Activities for Employees

May 14 Drive Talk : D Dedication to Excellence

June 10 Breastfeeding Corner Project

June 16 and June 23 Annual Physical Check up for Employees

August 1 Drive Talk : R Result Oriented

September 7 - 8 EGCO Group Sport Day

September 20 Drive Talk : I Initiative and Dynamic

September 29 Annual fire drill

December 28 EGCO New Year Party

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Activities to Promote Good Corporate Governance

April 7 Dhamma Seminar on “Corporate Governance”

October 18 Seminar on “Risk Management for Executives”

Activities for Society and Environment

EGCO

January - December A Watershed Forest : A Source of Energy for Life Project, under the ‘Reduce Global Warming for His Majesty the King’ campaign : In collaboration with the Department of Alternative Energy Development and Efficiency (DEDE), The Ministry of Energy, developing the 3rd model mini hydro power plant at Huoy Wok Village, Ban Klang, Tambon Ban Luang, Amphoe Jom Thong, Chiang Mai.

March 14 - 18 EGCO Forest Conservation Youth Camp : 35th and 36th youth camps at Doi Inthanon National Park, Chiang Mai. March 21 - 25

May 17 EGCO Green Blood Youth Network in Northern Regions : Organizing “Dern Keun Doi” (“Walking up the hill”) activity with the aim of reducing garbage and preserving the environment as good deeds on Visakha Bucha Day at Doi Suthep-Pui National Park.

August 18 - 20 The 5th Forest : The Circle of Life Project : In collaboration with Thai Forest Conservation Foundation and Doi Inthanon National Park, organizing a tree planting activity aiming to return natural equilibrium to the watershed forest at Doi Inthanon Natural Park and Ban Teen Pha, Amphoe Mae Cham, Chiang Mai.

August 24 Appointing ceremony of a model school for “How to Fight Global Warming with Sustainable Living” under the “How to Fight Global Warming with Sustainable Living” Project at Nikhom Vittaya School, Rayong.

October 10 - 13 Seminar on “How to Fight Global Warming with Sustainable Living” for mainstay teachers from 21 schools in five regions under the “How to Fight Global Warming with Sustainable Living” Project.

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Rayong Power Plant

January - December Organizing sport activities attended by communities around the power plant and Map Ta Phut Municipality, Rayong with the objective to promote good relationships and good health.

March 8 - 11 The 8th EGCO Youth Camp Project (Rayong Power Plant) : Organizing a visit to an ecological power plant at Rayong Power Plant under EGCO Group, and activity to raise awareness in conserving natural resources at Khao Laem Ya - Samet Islands National Park.

May 11 Demonstration workshop of basic fire fighting and fire control of fires caused by the use of household gas stoves for Mab Kha community-Samnak Ai Ngon located in the surrounding area of the power plant.

June 2 Tree-planting Activity : Preserving the environment and creating a protection strip at Rayong Power Plant in collaboration with Map Ta Phut Municipality and communities in the surrounding area of the power plant.

August 10 Staff of Rayong Power Plant together with Huai Pong Community-Sa Pan Nam Tuam planted Thai flame-trees in community areas to pay homage to Her Majesty the Queen on the occasion of National Mother’s Day.

August 11 Cleaning Community Activity : Collaborating with communities in the surrounding areas of the power plant (Huai Pong Nai communities 1 and 2, and Talad Huai Pong community) to preserve the environment and promote public- mindedness.

September 26 - 30 International Rattan Ball Game at Rayong Stadium in collaboration with the Electricity Generating Authority of Thailand and Tirathai Public Company Limited.

October 20 - 21 Restoring Public Health Knowledge Workshop Project for volunteers in communities in the vicinity of power plants November 18 (public health volunteers) twice : once at Huai Pong Public Health Service Center and once at Mab Kha Public Health Service Center.

December 2 Planting Trees, Building Dams, and Dredging Nam Cha Canal Activity in communities situated at the rear of the power plant with the aim of restoring the environment and quality of life of communities as part of performing good deeds to celebrate the 7th Cycle Birthday of His Majesty the King.

December 17 - 18 Improving and Repairing the Electrical System of Temple, Schools and Communities Project in the surrounding areas of the power plant to install electrical system at a multipurpose building for the Nong Wai Som community, Rayong.

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KEGCO

January - December Biological Agriculture for Sustainable Living Project : Organizing lectures and demonstrations of “making organic fertilizer for agricultural use” for 11 schools in Amphoe Khanon, Nakhon Sri Thammarat.

Breeding of Blue Swimming Crab Project : In collaboration with Nakhon Sri Thammarat Coastal Fisheries Research and Development Center in breeding blue swimming crabs, and releasing them as well as breeders into the sea at Khanom Bay, Amphoe Khanom, Nakhon Sri Thammarat.

Community Relations Development Project : Repairing and maintaining the electrical system of schools, temples, a child development center and Islamic communities for safety.

January 8 National Children’s Day 2011 Activities : With the objective of providing children, youths and communities in the surrounding areas of the power plant with the opportunity to participate in the activities and visit Khanom Power Plant.

March 4 Skill Improvement for Youths Project : In association with Ban Ta Muang School, organizing the 12th knowledge competitive examination at primary level to win a scholarship in 2011 and scholarship and certificate presentation ceremony to students who passed the examination.

March 26 - April 8 Southern Flood Victim Relief : 5,157 relief packages and 27,000 litres of drinking water given to villagers in Amphoe Khanom, Nakhon Sri Thammarat and Surat Thani.

April 21 - 26 Field Trip for Elders in Amphoe Khanom Project : Taking elders from the Elderly Club of Khanom Hospital and elders living in the surrounding areas of the power plant on a field trip to the north for their pleasure.

May 19 Enhancing Relations within Communities Activity : Community relations football match and social gathering for community leaders to promote good relations.

May 24 - 27 The 37th EGCO Forest Conservation Youth Camp : at Khao Luang National Park, Nakhon Sri Thammarat.

June 23 - 30 5th New Home under the Sea (Artificial Reef) Project : Dropping 28 containers into the sea near Khanom Power Plant as well as collaborating with schools in Nakhon Sri Thammarat to organize the container drawings contest “Land of Dolphins” to encourage young people to help preserve natural resources and the environment.

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July 8 Annual Presentation of Lent Candle Activity : Together with its staff offered lent candles to 13 temples in Amphoe Khanom to carry on this tradition.

July 11 Releasing Freshwater Animals Activity : Shrimps and several breeds of freshwater fish were released in Klong Ban Klang Pumping Station to pay homage to Her Majesty the Queen on her birthday.

August 17 - 21 Youth Field Trip for Learning Project : Taking students from 23 schools in Amphoe Khanom on a field trip to the National Scientific Week Fair at the Convention and Exhibition Center, Bitec, Bangna with the objective to promote learning outside the classroom among the young generation.

August 25 Scholarship and Sport Equipment Presentation Ceremony 2011 : for 23 schools in Amphoe Knanom, Nakhon Sri Thammarat.

November 15 - 25 Making EM Ball Activity : Together with the Office of the Energy Regulatory Commission 11th District and communities in the surrounding areas of Khanom Power Plant, making 84,000 EM balls and accumulating 1,000 litres of fluid EM and giving them to the Electricity Generating Authority of Thailand for treating waste water after floods in the area around the power plant in Pranakorn Sri Ayutthaya.

Roi Et Green

September 30 The 1st Mobile Medical Unit Project : Offering medical check-ups to people living in communities around the power plant in Tambon Nau Muang, Muang District, Roi Et.

October 11 Donating Relief Packages to Flood Victims in Tambon Din Dum Project : Giving relief packages to villagers in Tambon Din Dum, Amphoe Jung Han, Roi Et and subsidies to schools affected by floods in the areas near the pump building of the power plant.

November 3 Drinking Water Storage Tank for Flood Relief in Ban Din Dang Project : A drinking water storage tank of 1,000 litres filled up with water was given to Din Dang Village, Tambon Dong Singh, Amphoe Jung Han, Roi Et for consumption during the floods for villages near the pump building of the power plant.

November 24 The 5th Help Farmers Harvest Project : Staff from the power plant helped farmers harvest on paddy fields adjacent to the power plant. This activity has been carried on for five consecutive years since 2007.

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Page 26: Electricity Generating : Annual Report 2011

FINANCIAL PERFORMANCE (Million Baht)

Sales and service income 7,661 8,609 9,145 10,320 10,939 13,839 16,022 15,620 15,378 11,463

Other income 449 386 349 378 655 848 805 852 898 669

Cost of sales and services 5,589 5,678 5,411 5,872 5,711 5,815 8,151 7,593 6,017 4,926

Administrative expenses and others 1,933 1,888 1,772 1,776 1,680 2,154 2,202 1,894 1,323 963

Impairment charge - - - - - - - (34) 170 342

Finance costs 694 564 568 630 839 1,166 1,859 2,220 2,631 2,807

Share of profit (loss) from subsidiaries,

an associate and interests in joint ventures 5,200 6,109 6,273 4,619 5,051 (83) 27 29 (545) (73)

Net Profit (loss) attributable to Minority interests 126 115 114 86 134 169 264 232 303 236

Net Profit (loss) before Fx 4,968 6,858 7,903 6,952 8,281 5,299 4,378 4,595 5,287 2,784

Fx gain (loss) 22 (56) 33 (25) 121 716 (285) 67 707 174

Net Profit (loss) attributable to Equity holders

of the Company 4,990 6,803 7,936 6,927 8,402 6,016 4,093 4,662 5,994 2,958

FINANCIAL POSITION (Million Baht)

Total assets 72,956 67,040 62,920 58,330 53,600 50,459 61,250 55,066 56,437 55,824

Total liabilities 14,423 11,712 11,826 12,788 11,604 14,661 29,136 25,963 29,736 34,876

Parent's shareholders' equity 57,978 54,819 50,572 45,066 41,475 35,289 31,041 28,173 25,895 20,276

Minority interests 555 509 521 476 521 509 1,073 982 859 724

Treasury stock - - - - - - - (52) (52) (52)

Issued and paid-up share capital 5,265 5,265 5,265 5,265 5,265 5,265 5,265 5,265 5,265 5,265

PER SHARE DATA (Baht)

Net Profit (loss) before Fx 9.44 13.03 15.01 13.21 15.73 10.07 8.32 8.75 10.07 5.30

Net Profit (loss) 9.48 12.92 15.07 13.16 15.96 11.43 7.78 8.88 11.41 5.62

Book Value 110.13 104.13 96.06 85.60 78.78 67.03 58.96 53.55 49.21 38.51

Dividend 5.25 5.25 5.25 5.00 4.75 4.00 3.25 3.00 2.75 2.50

RATIO ANALYSIS 

Liquidity ratio (Time) 11.72 10.26 8.30 2.58 4.22 1.65 2.27 3.25 2.19 2.21

Cashflows liquidity ratio (Time) 1.82 2.08 1.08 1.11 1.20 1.58 1.29 1.33 1.01 1.02

Gross profit ratio (%) 27.05 34.04 40.83 43.10 47.80 57.98 49.13 51.39 60.88 57.02

Earnings ratio (%) 37.49 45.04 50.33 45.22 50.48 41.19 24.28 28.25 38.10 24.53

Return on equity ratio (%) 8.85 12.91 16.60 16.01 21.89 18.14 13.83 17.28 26.02 15.26

Return on assets ratio (%) 7.13 10.47 13.09 12.38 16.15 10.77 7.04 8.36 10.68 5.44

Debt to equity ratio (Time) 0.25 0.21 0.23 0.28 0.28 0.41 0.91 0.89 1.11 1.66

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

Remarks :1 According to the announcement published by the Department of Business Development regarding the 2009 financial statements format, the Group is required to present directors

and management remuneration that used to include in cost of sales. Therefore, comparative figures have been adjusted to conform with changes in presentation in the current year.2 From January 1, 2007, EGCO Group has changed the accounting policy for interests in joint ventures in the consolidated financial statements from "Proportionate Consolidation"

to the "Equity Method"; and adopted the accounting policy regarding Employee Benefits. The retrospective adjustments have been made on 2006 financial statements.

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

Unit : Million Baht

Unit : Million Baht

Unit : Million Baht

Unit : Million Baht

Unit : Million Baht

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Page 27: Electricity Generating : Annual Report 2011

FINANCIAL PERFORMANCE (Million Baht)

Sales and service income 8,609 9,145 10,320 10,939 13,839 16,022 15,620 15,378 11,463

Other income 386 349 378 655 848 805 852 898 669

Cost of sales and services 5,678 5,411 5,872 5,711 5,815 8,151 7,593 6,017 4,926

Administrative expenses and others 1,888 1,772 1,776 1,680 2,154 2,202 1,894 1,323 963

Impairment charge - - - - - - (34) 170 342

Finance costs 564 568 630 839 1,166 1,859 2,220 2,631 2,807

Share of profit (loss) from subsidiaries,

an associate and interests in joint ventures 6,109 6,273 4,619 5,051 (83) 27 29 (545) (73)

Net Profit (loss) attributable to Minority interests 115 114 86 134 169 264 232 303 236

Net Profit (loss) before Fx 6,858 7,903 6,952 8,281 5,299 4,378 4,595 5,287 2,784

Fx gain (loss) (56) 33 (25) 121 716 (285) 67 707 174

Net Profit (loss) attributable to Equity holders

of the Company 6,803 7,936 6,927 8,402 6,016 4,093 4,662 5,994 2,958

FINANCIAL POSITION (Million Baht)

Total assets 67,040 62,920 58,330 53,600 50,459 61,250 55,066 56,437 55,824

Total liabilities 11,712 11,826 12,788 11,604 14,661 29,136 25,963 29,736 34,876

Parent's shareholders' equity 54,819 50,572 45,066 41,475 35,289 31,041 28,173 25,895 20,276

Minority interests 509 521 476 521 509 1,073 982 859 724

Treasury stock - - - - - - (52) (52) (52)

Issued and paid-up share capital 5,265 5,265 5,265 5,265 5,265 5,265 5,265 5,265 5,265

PER SHARE DATA (Baht)

Net Profit (loss) before Fx 13.03 15.01 13.21 15.73 10.07 8.32 8.75 10.07 5.30

Net Profit (loss) 12.92 15.07 13.16 15.96 11.43 7.78 8.88 11.41 5.62

Book Value 104.13 96.06 85.60 78.78 67.03 58.96 53.55 49.21 38.51

5.25 5.25 5.00 4.75 4.00 3.25 3.00 2.75 2.50

RATIO ANALYSIS 

Liquidity ratio (Time) 10.26 8.30 2.58 4.22 1.65 2.27 3.25 2.19 2.21

Cashflows liquidity ratio (Time) 2.08 1.08 1.11 1.20 1.58 1.29 1.33 1.01 1.02

Gross profit ratio (%) 34.04 40.83 43.10 47.80 57.98 49.13 51.39 60.88 57.02

Earnings ratio (%) 45.04 50.33 45.22 50.48 41.19 24.28 28.25 38.10 24.53

Return on equity ratio (%) 12.91 16.60 16.01 21.89 18.14 13.83 17.28 26.02 15.26

Return on assets ratio (%) 10.47 13.09 12.38 16.15 10.77 7.04 8.36 10.68 5.44

Debt to equity ratio (Time) 0.21 0.23 0.28 0.28 0.41 0.91 0.89 1.11 1.66

2011 2010 20091 2008 20072 2006 2005 2004 2003 2002

Remarks :

According to the announcement published by the Department of Business Development regarding the 2009 financial statements format, the Group is required to present directors

and management remuneration that used to include in cost of sales. Therefore, comparative figures have been adjusted to conform with changes in presentation in the current year.

From January 1, 2007, EGCO Group has changed the accounting policy for interests in joint ventures in the consolidated financial statements from "Proportionate Consolidation"

to the "Equity Method"; and adopted the accounting policy regarding Employee Benefits. The retrospective adjustments have been made on 2006 financial statements.

2011 2010 20091 2008 20072 2006 2005 2004 2003 2002

2011 2010 20091 2008 20072 2006 2005 2004 2003 2002

2011 2010 20091 2008 20072 2006 2005 2004 2003 2002

2011 2010 20091 2008 20072 2006 2005 2004 2003 2002

9,4948,9958,110

Unit : Million Baht

Unit : Million Baht

Unit : Million Baht

Unit : Million Baht

Unit : Million Baht

7,7518,1308,216

7,9036,952

8,281

5,299 4,378 4,5955,287

2,784

8,278 8,230 9,13512,212 11,673 10,141 9,038

10,698 11,594

14,68716,827 16,472 16,276

12,132

6,273

4,619 5,051

(83) 27 29 (545) (73)

53,600 50,459

62,92058,330 61,250

55,066 56,437 55,824

72,95667,040

6,858

4,968

5,2006,109

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Page 28: Electricity Generating : Annual Report 2011

The previous year has been another year of challenge for the business sector. Although the global economy begins to recover from the economic crisis that has prevailed over the past three years, Thailand has experienced an economic upturn owing to the domestic demand with successive increases in private investment and consumption, and exports. Nonetheless, there has still been an impact caused by political instability, overall higher expenditure on energy, and flooding at the end of the year.

As regards the energy situation, particularly that of the power generating business, in 2011, the government sector has set up a 20-year plan in developing the country’s electric power productivity from 2010 to 2030. According to this plan, the emphasis will be placed on the security of the electric power system, dissemination of energy sources in producing electricity, and the use of renewable energy for the Green PDP plan to be in accordance with the 15-year Renewable Energy Development Plan of the Ministry of Energy as well as to enhance efficient energy consumption, and to promote efficient production of electricity using cogeneration.

The Electricity Generating Public Company Limited or the EGCO Group is determined to develop the organization, progressing and strengthening under good corporate governance with an awareness of the best interests of every stakeholder. To achieve sustainable growth as the first independent power producer in Thailand, in 2011, the Company adjusted its strategies in expanding investments in the energy business, both in Thailand and the ASEAN region, as well as investing in projects related to the use of energy of different forms or natural energy such as hydroelectric power, solar power and wind power. In addition to the management of existing projects, the Company is constantly searching for quality projects with good returns in the future and at an acceptable level of risk. The knowledge base regarding the energy market, investment opportunities and governance structure in the ASEAN countries has been continually developed in order to achieve the integrated business of the EGCO Group; covering the upstream - the energy business - and the downstream - the future electricity production and distribution business - in order to preserve our market share as the leading energy company, and to consistently strengthen the financial status and the operating results of the EGCO Group.

In the previous year, the EGCO Group purchased more shares from the Quezon Power (Philippines) Co., Ltd., the owner of the Quezon coal-fired Power Plant, acquiring a further 26.125 %, making the EGCO Group hold total shares of 52.125% in Quezon. In addition, the EGCO Group purchased shares from Xayaburi Power Co., Ltd (XPCL) accounting for 12.50% of the whole shares, to be part of the development of the Xayaburi Power Plant Project, a hydroelectric power plant in dam in Laos. Furthermore, in 2010 the EGCO Group was selected to be the small power producer responsible for three projects, on a firm contract basis, using cogeneration by the Electricity Generating Authority of Thailand (EGAT) according to the resolution of the Energy Regulatory Commission. Each project supplies 90 megawatts covering the period of 25 years. The Company and EGAT have already signed the sale contract.

Message from the Chairman

“...EGCO Group is determined to develop the organization, progressing and strengthening under

good corporate governance with an awareness of

the best interests of every stakeholder...”

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Moreover, the Lopburi Solar project by Natural Energy Development Co.,Ltd (NED), in which the EGCO Group holds 33.33% of the shares, has commenced producing and distributing electricity to EGAT for phase one, accounting for eight megawatts. The contract will be complete in mid-2012. This is a solar power plant using solar cell technology on the largest thin film in the world with a productivity of 55 megawatts.

With all these examples of progress, in 2011 the EGCO Group had a total of 15 power plants in operation, accounting for the ratio of productivity to shareholding at 4,419.97 megawatts - 58.95 megawatts more when compared to 2010. Of this number, 3,864.19 megawatts was distributed to EGAT. When compared to the country’s total productivity of 31,446.71 megawatts, this comprises 12.29 % of the country’s total productivity. The EGCO Group is a power producer producing electricity from a great variety of types of energy, in compliance with the policy of the government sector in disseminating energy consumption to promote energy security.

As regards the 2011 operating results, the Company obtained a net profit of 4,990 million baht, or a net profit of 9.48 baht per share. However, if not taking into account the impact caused by the exchange rate and the expense of special circumstances - the EGCO Group would have gained a net profit of 6,049 million baht. In total, the EGCO Group owns property worth 72,956 million baht and paid dividend from the operating results of the first half of 2011 at 2.50 baht per share. The Company is certain that the dividend payment will continue to remain at a satisfactory and appropriate level.

The EGCO Group, aware of the sustainability of the environment and society in general as the foundations of success of every enterprise, adheres to operating under the vision of “conserving the environment and developing society” by fostering and reducing any impact caused by business operations alongside enhancing competency and collaboration with every sector in continually developing the environment and society. Moreover, staff are encouraged to take part in such operations on a regular basis. The Company believes that it will help strengthen capacity and work skills as well as instill public-mindedness in EGCO employees, making them become quality personnel within the organization in addition to being civil-minded citizens in society. Bearing this in mind, projects for community and society are operated in a progressive manner covering three aspects: the promotion and development of quality of life in community, the conservation of the environment and natural resources, and the promotion of learning about the environment and creating public-mindedness among youth.

With its determination to move the Company forward, in 2011 the EGCO Group received recognition from a number of sectors. The Company was ranked tenth for best listed companies of the year, fourth for best companies in the energy and public utilities category, fifth for the best companies in Thailand as regards net profit to total revenue according to the ranking conducted by Money and Banking Magazine. Furthermore, the Company received the ‘Top Corporate Governance Report Awards’ and ‘Corporate Social Responsibility Awards’ for the companies listed in Stock Exchange of Thailand with over 10,000 million baht worth of stocks at the stock exchange price at the SET Awards 2011 organized by the Stock Exchange of Thailand (SET) and Money and Banking Magazine. The Company was one of five companies to obtain Corporate Social Responsibility Excellence at the Thailand Corporate Excellence Awards organized by

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Thailand Management Association in collaboration with the Sasin Graduate Institute of Business Administration of Chulalongkorn University. Added to all this were “The Board of Directors of the Year for Exemplary Practices 2010/2011”, “The Audit Committee of the Year” and the “Board with Consistent Best Practices” at the Board of the Year Awards 2010/2011 organized by the Thai Institute of Directors, the Stock Exchange of Thailand, the Thai Chamber of Commerce, the Federation of Thai Industries, the Thai Bankers’ Association, the Thai Listed Companies Association and the Federation of Thai Capital Market Organizations.

In relation to the operational standards of power plants, the EGCO Group has received continual acceptance from various institutes :

Nam Theun 2 Power Plant Project was recognized and selected as a Distinctive Hydroelectric Power Plant in the World in 2011 under the Renewable Energy Type; Lopburi Solar Project received the Crow Standard as the operator of the Clean Development Mechanism (CDM) project and as a social contributor; Khanom Power Plant received the “Best Practice Workplace on Safety, Occupational Health and Work Environment Award” at the national level for the 12th

consecutive year during the 25th Safety Week organized by the Ministry of Labor, and the “Best Practice Workplace on Labor Relations and Labor Welfare Award” for the fifth consecutive year; EGCO Cogen Power Plant received the Corporate Social Responsibility Certification of Rayong; Roi Et Green Power Plant obtained the “Best Practice Workplace on Safety, Occupational Health and Work Environment Award” at the national level for the second consecutive year during the Safety Week organized by the Ministry of Labor, and received Green Commitment Level 1 with the aim to reduce the impact on the environment from the Ministry of Industry.

The above-mentioned success is a result of the support from every sector relating to the EGCO Group. On behalf of the Company’s Board, executives and every EGCO member of staff, I would like to express my sincere gratitude to all shareholders, joint venture partners, trading partners and every involved party for their continued support. We hope to have your trust in ensuring you that the Company will conduct itself in accordance with the principles of good corporate governance and social responsibility in the highest interests of all stakeholders and will continue to do so to develop the sustainable growth of the organization alongside that of our country.

Mr. Pornchai Rujiprapa Chairman of the Board of Directors

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07 Mr. Phaiboon Siripanoosatien • Independent Director • Nomination and Remuneration Committee Member • Corporate Governance and Social Responsibility Committee Member

04 Mr. Thanapich Mulapruk • Independent Director • Audit Committee Member

05 Police Lieutenant General Pijarn Jittirat • Independent Director • Corporate Governance and Social Responsibility Committee Member • Nomination and Remuneration Committee Member

06 Mr. Somphot Kanchanaporn • Independent Director • Audit Committee Member

01 Mr. Pornchai Rujiprapa • Chairman • Chairman, Investment Committee

02 Mr. Aswin Kongsiri • Independent Director • Vice Chairman • Chairman, Corporate Governance and Social Responsibility Committee • Nomination and Remuneration Committee Member

03 Mr. Chaipat Sahasakul • Independent Director • Chairman, Audit Committee

08 Mr. Kulit Sombatsiri • Director • Corporate Governance and Social Responsibility Committee Member

09 Mr. Surasak Supavititpatana • Director • Investment Committee Member

Board of Directors as at January 31, 2012

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12 Mr. Toshiro Kudama • Director

10 Mr. Thawat Vadjanapornithi • Director • Nomination and Remuneration Committee Member

11 Mr. Hideaki Tomiku • Director • Chairman, Nomination and Remuneration Committee • Investment Committee Membe

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

13 Mr. Ryota Sakakibara • Director • Investment Committee Member

14 Mr. Satoshi Yajima • Director

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

08 Mr. Akio Matsuzaki • Director Vacating the office by resignation on January 29, 2012

04 Mr. Wisudhi Srisuphan • Director Vacating the office by resignation on February 28, 2011

06 Mr. Kurujit Nakornthap • Director • Corporate Governance and Social Responsibility Committee Member Vacating the office by resignation on December 1, 2011

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

02 Mr. Mark Jobling • Director • Chairman, Nomination and Remuneration Committee • Investment Committee Member Vacating the office by resignation on February 23, 2011

03 Mr. Shinji Tsuchiya • Director Vacating the office by resignation on February 23, 2011

01 Mr. Peter Albert Littlewood • Director Vacating the office by resignation on February 23, 2011

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

Board of Directors during 2011 - January 31, 2012

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The positions of EGCO’s Board of Directors as at January 31, 2012

Mr. Pornchai Rujiprapa (59) • Chairman

• Chairman, Investment Committee

Education

• Ph.D. (Regional Economics.), University of Pennsylvania, U.S.A • M.Sc. (Regional Economics.), from University of Pennsylvania, U.S.A. • M.P.A. (Programming Planning Administration) from National Institute of Development Administration (NIDA) • B.Sc. (Agro-Industry) from Kasetsart University • Certificate of Executive Program, Class 7, Capital Market Academy • Certificate of Directors Accreditation Program, Thai Institute of Directors Association • National Defense Course (Class of 41), National Defence College Working Experience

October 2006 - Present Chairman, Electricity Generating Authority of Thailand 2010 - Present Permanent Secretary, Ministry of Science and Technology Ministry of Science and Technology 2006 - September 2010 Permanent Secretary, Ministry of Energy Ministry of Energy December 2006 - 2008 Director PTT Public Company Limited 2005 - 2009 Chairman PTT Chemical Public Company Limited 2003 - 2006 Deputy Permanent Secretary, Ministry of Energy Ministry of Energy 1999 - 2003 Deputy Secretary-General, The National Economic and Social Development Board (NESBD) Office of the Prime Ministry

Mr. Aswin Kongsiri (66) • Independent Director

• Vice Chairman

• Chairman, Corporate Governance and Social Responsibility

Committee

• Nomination and Remuneration Committee Member

Education

• Bachelor’s Degree (Honours) in Philosophy, Politics and Economics, Oxford University, England • Banff School of Advanced Management, Alberta, Canada • The National Defense Course for the Joint State-Private Sectors, Class 6, National Defence College • Certificate of Chairman 2000 Program, Thai Institute of Directors Association • Certificate of Directors Certification Program, Thai Institute of Directors Association Working Experience

November 2011 - Member of Monetary Policy Committee Present Bank of Thailand October 2010 - Present Chairman, Thai Orix Leasing Co., Ltd. (TOLC) August 2010 - Present Governor, The Stock Exchange of Thailand April 2010 - Chairman, Krungthai - Axa Life Insurance November 2011 Co., Ltd.(KAL) November 2010 - Chairman, Thoresen Thai Agencies Present Public Company Limited January 2009 - 2010 Director and Audit Committee Member Thoresen Thai Agencies Public Company Limited October 2007 - Present Chairman, Ch. Karnchang Public Company Limited 2007 - Present Chairman, Ton Poh Thailand Fund 2005 - Present Independent Director, Bangkok Aviation Fuel Services Public Company Limited 1999 - Present Independent Director, The OHTL Public Company Limited (Mandarin Oriental Hotel) 1993 - Present Independent Director, Thai Reinsurance Public Company Limited 1981 - Present Independent Director, Padaeng Industry Public Company Limited 2005 - August 2010 Independent Director and Executive Committee Member Krung Thai Bank Public Co., Ltd. 2003 - November 2008 Independent Director, Thai Rating and Information Services Company Limited

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Mr. Chaipat Sahasakul (57) • Independent Director

• Chairman, Audit Committee

Education

• Ph.D. in Economics, University of Rochester, U.S.A. • M.A. in Economics, Thammasat University • B.A. in Economics, Thammasat University • Certificate of Executive Program, Class 12, Capital Market Academy • The National Defense Course for the Joint Public-Private Sectors, Class 21, National Defence College • Politics and Governance in Democratic Systems for Executives Course 11, King Prajadhipok’s Institute • Certificate of Directors Certification Program, Thai Institute of Directors Association • Certificate of Audit Committee and Continuing Development Program, Thai Institute of Directors Association • Certificate of Monitoring Fraud Risk Management, Thai Institute of Directors Association • Certificate of Monitoring the System of Internal Control and Risk Management, Thai Institute of Directors Association • Certificate of Monitoring the Quality of Financial Reporting, Thai Institute of Directors Association Working Experience

August 2010 - Present Governor The Stock Exchange of Thailand May 2010 - Present Independent Director and Audit Committee Member, Thai Vegetable Oil Public Company Limited May 2009 - Present Chairman, University Research policy Committee, Bangkok University July 2005 - Present Independent Director and Audit Committee Member Pylon Public Company Limited 2001 - April 2009 Secretary - General Agricultural Futures Trading Commission 2005 - 2006 Director, Audit Committee Member and Chairman of Risk Management Committee Government Housing Bank 1998 - 2001 Senior Executive Vice President MFC Asset Management Public Company Limited 1991 - 1996 Senior Vice President and Spokesman Stock Exchange of Thailand

Mr. Thanapich Mulapruk (62) • Independent Director

• Audit Committee Member

Education

• LL.M., Chulalongkorn University • LL.B., Chulalongkorn University • Thai Bar Certificate, Thai Barrister at law of Thailand • National Defence College, 1998 (Class 41) • Certificate of Directors Certification Program (class 78), Thai Institute of Directors Association • Certificate of Executive Program, Class 7, Capital Market Academy • Certificate of Audit Committee and Continuing Development Program, Thai Institute of Directors Association • Certificate of Monitoring Fraud Risk Management, Thai Institute of Directors Association • Certificate of Monitoring the System of Internal Control and Risk Management, Thai Institute of Directors Association • Certificate of Monitoring the Quality of Financial Reporting, Thai Institute of Directors Association Working Experience

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

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Police Lieutenant General Pijarn Jittirat (63) • Independent Director

• Corporate Governance and Social Responsibility

Committee Member

• Nomination and Remuneration Committee Member

Education

• Master of Public Administration, Chulalongkorn University • Bachelor of Public Administration, Police Cadet Academy • Advanced Course in Administration, Class 29, Institute of Administration Development • Advanced Course in Police Administration, Class 13 • National Defense College Class 44 • Certificate of The Board’s Role on Fraud Presentation and Detection, Thai Institute of Directors Association • Certificate of Role of the Compensation Committee, Thai Institute of Directors Association • Certificate of Directors Certification Program, Thai Institute of Directors Association Working Experience

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

Mr. Somphot Kanchanaporn (65) • Independent Director

• Audit Committee Member

Education

• MBA, National Institute of Development Administration (NIDA) • B.S. (Police Science and Administration), California State University at Los Angeles • Certificate of Directors Accreditation Program (DAP), Thai Institute of Directors Association • National Defense College, (Class 41st) • Certificate of Executive Program, Class 7, Capital Market Academy • Certificate of Monitoring Fraud Risk Management, Thai Institute of Directors Association • Certificate of Monitoring the System of Internal Control and Risk Management, Thai Institute of Directors Association • Certificate of Monitoring the Quality of Financial Reporting, Thai Institute of Directors Association Working Experience

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

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Mr. Kulit Sombatsiri (48) • Director

• Corporate Governance and Social Responsibility

Committee Member

(Authorized Director)

Education

• MBA, University of Southern California, U.S.A. • MPA, San Diego State University, U.S.A. • BA, Public Administration, Ramkhamhaeng University • Certificate of Executive Program, Class 10, Capital Market Academy • Certificate of Directors Certification Program, Thai Institute of Directors Association Working Experience

2011 - Present Director Electricity Generating Authority of Thailand October 2011 - Present Inspector General, Ministry of Finance 2009 - Present Director Krung Thai Asset Management Public Company Limited March 2010 - State Enterprise Development Advisor September 2011 The State Enterprise Policy Office, Ministry of Finance September 2008 - Deputy-Director General February 2010 The State Enterprise Policy Office, Ministry of Finance 2007 - August 2008 Director, Bureau of Monetary Management The Treasury Department, Ministry of Finance 2005 - 2007 Deputy Secretary General The National Telecommunications Commission

Mr. Phaiboon Siripanoosatien (48) • Independent Director

• Nomination and Remuneration Committee Member

• Corporate Governance and Social Responsibility

Committee Member

Education

• Master of Political Science, Sukhothai Thammathirat University • Bachelor of Engineering, Chulalongkorn University • Certificate of Directors Certification Program, Thai Institute of Directors Association • Certificate of Democratic Politics and Governance for High- Level Administrators, Class 7, King Prajadhipok’s Institute • Certificate of Management of Public Economy, Class 1, King Prajdhipok’s Institute • Certificate of Executive Program, Class 3, Capital Market Academy Working Experience

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

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Mr. Surasak Supavititpatana (59) • Director

• Investment Committee Member

(Authorized Director)

Education

• Bachelor of Engineering (Electrical Engineering), Kasetsart University • Certificate of Management of Public Economy for Executive, King Prajadhipok’s Institute • Certificate of Directors Certification Program, Thai Institute of Directors Association • Certificate of Finance for Executive Decision, Continuing Education Center, Chulalongkorn University • Certificate of Positioning Utility Executives for Change, University of Idaho • Certificate of Air War College, High Education Institute Working Experience

January 2010 - Present Deputy Governance-Generation Electricity Generating Authority of Thailand October 2006 - Assistant Governor-Power Plant 2 January 2010 Electricity Generating Authority of Thailand November 2000 - Mae Moh Power Plant Production Division September 2006 Manager Electricity Generating Authority of Thailand

Mr. Thawat Vadjanapornithi (59) • Director

• Nomination and Remuneration Committee Member

(Authorized Director)

Education

• Bachelor of Engineering (Electrical Engineering), Chulalongkorn University • Certificate of Management of Public Economy for Executive (Class 7), King Prajadhipok’s Institute • Certificate of Directors Certification Program (Class 86), Thai Institute of Directors Association • Certificate of Finance for Executive Decision, Continuing Education Center, Chulalongkorn University • Certificate of Masterful Coaching Workshop, Hay Group • Certificate of Senior Executive Development Program-2, Foundation for International Human Resource Development Working Experience

October 2010 - Present Deputy Governance-Corporate Social Responsibility, Acting EGAT Spokesman Electricity Generating Authority of Thailand January 2010 - Assistant Governor-Human Resources September 2010 Electricity Generating Authority of Thailand October 2008 - Assistant Governance-Corporate Social December 2009 Responsibility Electricity Generating Authority of Thailand December 2007 - Assistant Governance-Administration, September 2008 Development Area Electricity Generating Authority of Thailand

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Mr. Hideaki Tomiku (54) • Director

• Chairman, Nomination and Remuneration Committee

• Investment Committee Member

(Authorized Director)

Education

• International Law, Tokyo University Working Experience

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

Mr. Toshiro Kudama (53) • Director

(Authorized Director)

Education

• Master of Mechanical Engineering, Tokyo Institute of Technology • Bachelor of Mechanical Engineering, Tokyo Institute of Technology Working Experience

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

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Mr. Ryota Sakakibara (39) • Director

• Investment Committee Member

(Authorized Director)

Education

• Bachelor of Economics, The University of Tokyo Working Experience

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

Mr. Satoshi Yajima (44) • Director

(Authorized Director)

Education

• Bachelor of Electrical Engineering, Waseda University, Japan Working Experience

2002 - Present General Manager, Overseas Business Group 2 International Affairs Department The Tokyo Electric Power Company Inc.

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Mr. Sahust Pratuknukul (56) • Director

• Nomination and Remuneration Committee Member

(During April 22, 2010 - September 30, 2011)

• President and Director

• Chairman, Risk Management Committee

• Chairman, Group Business Committee

• Chairman, Good Corporate Governance Committee

• Chairman, EGCO Management Committee

• Investment Committee Member

• Corporate Governance and Social Responsibility

Committee Member

(Appointed to be President on October 1, 2011)

(Authorized Director) Education

• Bachelor of Engineering (Electrical Engineering), Chulalongkorn University • Certificate of the Joint Public-Private Sectors Regular Course, National Defence College • Certificate of Senior Executive Development Program-1, GE Co., Ltd. • Certificate of Finance for Executive Decision Program, Continuing Education Center, Chulalongkorn University • Certificate of Directors Certification Program, Thai Institute of Directors Association Working Experience

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

January 2008 - Director, EGAT International Co., Ltd. December 2010 October 1, 2006 Assistant Governor-Policy Electricity Generating Authority of Thailand October 1, 2005 Assistant Chief Executive Officer-Planning Electricity Generating Authority of Thailand October 1, 2003 Director, Energy Economic Division Electricity Generating Authority of Thailand

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Mr. Mark Jobling (40) • Director

• Chairman, Nomination and Remuneration Committee

• Investment Committee Member

(Authorized Director)

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

Education

• BachelorofEconomics,MonashUniversity• BachelorofLaws(Honours),MonashUniversity• BarristerandSolicitor(Victoria)• Solicitor(HongKong) Working Experience

2009-Present Director NaturalEnergyDevelopmentCo.,Ltd.2009-2011 ManagingDirector-SoutheastAsia CLPHoldings2009-2011 ChiefExecutiveOfficer OneEnergy2006-2009 SeniorVicePresident-Business Development OneEnergy2003-2006 GeneralCounsel,CLPPowerAsia

The positions of EGCO’s Board of Directors during 2011 - January 31, 2012

Mr. Peter Albert Littlewood (60) • Director

(Authorized Director)

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

Education

• MA(1stClassHonours),CambridgeUniversity,U.K. Working Experience

2009-Present Director NaturalEnergyDevelopmentCo.,Ltd.2003-Present ExecutiveDirectorandChiefOperating Officer CLPPowerAsiaLimited,HongKong2001-2010 Director,BLCPPowerLimited2000-2005 Director RayongElectricityGeneratingCo.,Ltd.2000-2005 Director KhanomElectricityGeneratingCo.,Ltd.2000-2005 Director EGCOEngineering&ServiceCo.,Ltd.1999-2003 ProjectManagerforCLP’sgenerating plantprojects CLPGroup1998 GeneralManagerforCLP’sgeneration businessgroupandlaterforCLP strategicdevelopment CLPGroup

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Mr. Shinji Tsuchiya (41) • Director

(Authorized Director)

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

Education

• BachelorofEngineering(MechanicalEngineering), KeioUniversity Working Experience

April2009-Present HeadofSoutheastAsiaIPPTeam GlobalPowerGenerationandMarketing UnitofMitsubishiCorporationNovember2005- ManagerMarch2009 PowerGenerationandMarketing InternatinalUnitofMitsubishiCorporation ElectricidadAguiladeTuxpan(co.)November2005 CommercialDirector ElectricidadSoldeTuxpan

Mr. Wisudhi Srisuphan (62) • Director

(Authorized Director)

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

Education

• M.A.A.BusinessEconomics,ThammasatUniversity• M.E.(C.E.)LamarUniversity,U.S.A.• LLB.(SecondClassHonour),RamkhamhaengUniversity• B.Eng.inCivilEngineering,ChulalongkornUniversity• NationalDefenseCourse(Class38),NationalDefenseCollege• PoliticsandGovernanceinDemocraticSystemsforExecutive Course(Class6),KingPrajadhipok’sInstitute• CMA(Class6),CapitalMarketAcademy• CertificateofRoleofChairmanProgram, ThaiInstituteofDirectorsAssociation• CertificateofDirectorsCertificationProgram, ThaiInstituteofDirectorsAssociation Working Experience

November2010- IndependentDirectorPresent PruksaRealEstatePublicCompanyLimitedJune2010-2011 Chairman CATTelecomPublicCompanyLimitedOctober2006-Present Director,OfficeoftheCouncilofStateAugust2004-Present Chairman,RealEstateInformationCenterJune2010- ChairmanSeptember2010 SunshineCorporationPublicCompany LimitedDecember2009- ChairmanJune2010 SiamCityBankPublicCompanyLimitedOctober2008-2010 Director TheElectricityGeneratingAuthorityof ThailandJuly2008-June2010 ViceChairman DhipayaInsurancePublicCompany Limited2009 Director-General TheCustomDepartment,Ministryof Finance2008-2009 DeputyPermanentSecretary MinistryofFinance2006-2009 ChairmanoftheBoard TheGovernmentSavingBank2006-2009 Director ThaiAirwaysInternationalPublic CompanyLimited

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Mr. Somboon Arayaskul (58) • Director

• Investment Committee Member

• Corporate Governance and Social Responsibility

Committee Member

(Authorized Director)

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

Education

• MasterofEngineering(MechanicalEngineering), VillanovaUniversity,U.S.A.• BachelorofEngineering(MechanicalEngineering), MapuaInstituteofTechnology,Philippines• CertificateofDirectorsCertificationProgram, ThaiInstituteofDirectorsAssociation• CertificateoftheGeneralManagerProgram, HarvardBusinessSchoolWorking Experience

December2007- DeputyGovernor-DevelopmentPresent ElectricityGeneratingAuthorityof ThailandApril2008- DirectorJanuary2009 RatchaburiElectricityGeneratingHolding PublicCompanyLimitedOctober2006- VicePresident-ThermalPowerPlantDecember2007 Construction ElectricityGeneratingAuthorityof Thailand

2007-2008 Director-General TheCustomDepartment,Ministryof Finance2006-2008 ChairmanoftheBoard ThailandofTobaccoMonopoly, MinistryofFinance2007 Director-General TheExciseDepartment,Ministryof Finance2003-2007 Director-General TheTreasuryDepartment,Ministryof Finance2005-2006 Chairman CATTelecomPublicCompanyLimited2002-2006 Director PTTExplorationandProductionPublic CompanyLimited2000-2006 ChairmanoftheBoard TheGovernmentHousingBank2000-2005 Director,PTTPublicCompanyLimited2002-2003 Director-General FiscalPolicyOffice,MinistryofFinance1999-2002 Comptroller-General TheComptroller’sDepartment,Ministryof Finance

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Page 46: Electricity Generating : Annual Report 2011

Mr. Vinit Tangnoi (60) • President and Director

• Chairman, Risk Management Committee

• Chairman, Group Business Committee

• Chairman, Good Corporate Governance Committee

• Chairman, EGCO Management Committee

• Investment Committee Member

• Corporate Governance and Social Responsibility

Committee Member

(Authorized Director)

(Mr. Vinit Tangnoi’s contract as President expired on

September 30, 2011)

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

• MasterofScience(IndustrialEngineering), UniversityofTexasatArlington,U.S.A.• B.Eng.(Mechanical),KasetsartUniversity• CertificateofAdvanceManagementProgram, HarvardBusinessSchool,HarvardUniversity,U.S.A.• CertificateofSeniorExecutiveProgram,SasinGraduate InstituteofBusinessAdministrationofChulalongkornUniversity• CertificateofArmyWarCollegeRegularProgram, InstituteofArmyAcademics• CertificateofDirectorsCertificationProgram, ThaiInstituteofDirectorsAssociation• CertificateofLeaderProgram,CapitalMarketAcademy Working Experience

March2011- DirectorSeptember2011 XayaburiHydropowerCompanyLimitedAugust2009- ChairmanSeptember2011 NaturalEnergyDevelopmentCompany LimitedJanuary2009- ChairmanSeptember2011 GulfElectricCompanyLimitedOctober2008- ChairmanSeptember2011 KhanomElectricityGeneratingCompany LimitedOctober2008- ChairmanSeptember2011 EGCOEngineeringandServiceCompany LimitedOctober2008- Director,BLCPPowerCompanyLimitedSeptember2009October2008- ChairmanSeptember2009 RayongElectricityGeneratingCompany Limited

Mr. Kurujit Nakornthap (56) • Director

• Corporate Governance and Social Responsibility

Committee Member

(Authorized Director)

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

Education

• Ph.D.inPetroleumEngineering,UniversityofOklahoma,U.S.A.• MaterofScienceinPetroleumEngineering, UniversityofOklahoma,U.S.A.• BachelorofScience(withSpecialDistinction)inPetroleum Engineering,UniversityofOklahoma,U.S.A.• TheCivilServiceExecutiveProgramforSeniorCivilServants (VisionaryLeadership,Class46)byOCSC,Bangkok• SeniorExecutiveProgram(SEP60),attheLondonBusiness School,U.K.• CertificateofDirectorAccreditationProgram, ThaiInstituteofDirectorsAssociation• CertificateofAuditCommitteeProgram, ThaiInstituteofDirectorsAssociation• NationalDefenseCollege(Class2551(2008-2009)),ThailandWorking Experience

2011-Present Director,ElectricityGeneratingAuthority ofThailandNovember2010- DeputyPermanentSecretaryPresent MinistryofEnergySeptember2008- DirectorGeneral,DepartmentofMineralNovember2010 Fuel MinistryofEnergyDecember2006- DeputyPermanentSecretarySeptember2008 MinistryofEnergyJanuary2006- DeputyDirectorGeneral,DepartmentofDecember2006 MineralFuels MinistryofEnergy

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

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Page 47: Electricity Generating : Annual Report 2011

December2007- DeputyGovernor-GenerationSeptember2008 ElectricityGeneratingAuthorityof Thailand Director,EGATInternationalCo.,Ltd.2006-2008 Director RatchaburiElectricityGeneratingHolding PublicCompanyLimitedMarch2006 DeputyGovernor-SystemControl ElectricityGeneratingAuthorityof ThailandOctober2005 SeniorExecutiveVicePresident-System Control ElectricityGeneratingAuthorityof ThailandJune2005 AssistantChiefExecutiveOfficer-Planning ElectricityGeneratingAuthorityof ThailandOctober2004 AssistantGovernor-PolicyandPlanning ElectricityGeneratingAuthorityof ThailandOctober2003 AssistantGovernor-FuelManagement ElectricityGeneratingAuthorityof Thailand

Mr. Akio Matsuzaki (55) • Director

(Authorized Director)

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

Education

• MasterofEnergyScience,TokyoInstituteofTechnology• BachelorofAppliedPhysics,TokyoInstituteofTechnology Working Experience

2011-Present GeneralManager,ChibaThermalPower Station,EastThermalPowerOffice TheTokyoElectricPowerCompany,Inc.2010-2011 GeneralManager,OverseasPower Business,ThermalPowerDepartment TheTokyoElectricPowerCompany,Inc.2007-2010 ExecutiveVicePresidentandChief OperationOfficer,TeamEnergy Corporation,Philippines TheTokyoElectricPowerCompany,Inc.1999-2007 GeneralManager,OverseasProject Group,ThermalPowerplantEngineering Center,ThermalPowerDepartment TheTokyoElectricPowerCompany,Inc.

45

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Page 48: Electricity Generating : Annual Report 2011

Company’s Management 01 02 03 04 05 06

01 Mr. John M. Palumbo • Senior Executive Vice President - Business Development - International

02 Mr. Voravit Potisuk • Senior Executive Vice President - Business Development - Domestic

03 Mr. Piya Jetasanon • Senior Executive Vice President - Finance and Corporate Services

04 Mr. Chumsak Desudjit • Senior Executive Vice President

05 Mr. Chankij Jearaphunt • Senior Executive Vice President

06 Mr. Wajarapong Palakawong Na Ayudhya • Senior Executive Vice President

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

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Page 49: Electricity Generating : Annual Report 2011

01 02

01 Mr. Nattanont Meesuksabai • Senior Vice President - Accounting and Budget Division

02 Ms. Somsiri Yoosook • Senior Vice President - Finance Division

47

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Page 50: Electricity Generating : Annual Report 2011

01 02 03 04

01Mr.SakulPochanart • Executive Vice President - Strategy and Corporate Management

02Mr.DanujaSimasathien • Executive Vice President - Business Development (Domestic)

03Mr.NiwatAdirek • Executive Vice President - Business Development (International)

04Mr.KiatichaiSiljitsong • Executive Vice President - Asset Management

48 Annual Report 2011ElectricityGeneratingPublicCo.,Ltd.

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Page 51: Electricity Generating : Annual Report 2011

05 06 07 08

05 Mr. Suvapan Chomchalerm • Executive Vice President - Finance

06 Ms. Vasana Vongpormek • Executive Vice President - Corporate Service

07 Ms. Ngamphis Chitphromphan • Executive Vice President

08 Mr. Thongchai Chotkajornkiat • Executive Vice President

49

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Page 52: Electricity Generating : Annual Report 2011

04 02 03 01 05 06

01 Ms. Warunee Tantiwong • REGCO Deputy Director - Finance & Administration

02 Ms. Pantipa Moolasart • ESCO Deputy MD - Finance & Administration

03 Ms. Krisna Pinkaew • KEGCO Deputy MD - Finance & Administration

04 Mr. Narong In-Eav • REGCO Deputy Director - Operation

05 Mr. Permask Rattana-Ubon • ESCO Deputy MD - Operation

06 Mr. Mana Vitavasakul • KEGCO Deputy MD - Operation

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

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Page 53: Electricity Generating : Annual Report 2011

The positions of the Management and the Control Persons as of December 31, 2011

Mr. John M. Palumbo (48) • Senior Executive Vice President - Business Development -

International

• Risk Management Committee Member

• Good Corporate Governance Committee Member

• Group Business Committee Member

• EGCO Management Committee

Education

• BachelorofScienceinMechanicalEngineering(Honors), Columbia-University,SchoolofEngineeringandApplied Science,NewYork. Working Experience

2011-Present Director KhanomElectricityGeneratingCompany Limited2011-Present Director EGCOEngineering&ServiceCompany Limited2011-Present Director NorthpoleInvestmentCompanyLimitedAugust2009-2010 Director NaturalEnergyDevelopmentCompany Limited2004-2010 Director GulfElectricPublicCompanyLimited30January2007- DirectorNovember2008 BLCPPowerCompanyLimited2005-May2008 Director EGCOJointVentures&Development CompanyLimited2004-April2007 Director NamTheun2PowerCompanyLimited2003-2004 IndependentConsultanttotheManaging DirectorandtheHeadoftheSoutheast AsiaBusiness ChinaLight&PowerGroup(HongKong)2003-2004 TeamLeader&InfrastructureSpecialist ADBTechnicalAssistanceProgram2003 IndependentConsultanttoChief ExecutiveOfficer InternationalPowerPLC.1995-2003 PrincipalandManagingDirector DeltaAssociates(Thailand)Limited

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

Domestic

• Risk Management Committee Member

• Good Corporate Governance Committee Member

• Group Business Committee Member

• EGCO Management Committee

Education

• MBA,TheUniversityofTheThaiChamberofCommerce• B.Eng.(Electrical&Communication)ChulalongkornUniversity• CertificateofDirectorsCertificationProgram, ThaiInstituteofDirectorsAssociation• ExecutiveLeadershipProgram(ELP-NIDAWharton)) Working Experience

2011-Present Director EGCOEngineering&ServiceCompany Limited2011-Present Director KhanomElectricityGeneratingCompany Limited2011-Present Director GulfElectricPublicCompanyLimited2011-Present Director,BLCPPowerCompanyLimited2011-Present Director NamTheun2PowerCompanyLimited2010-2011 Director QuezonGeneratingCompanyLtd, Philippines2010-2011 Director ConalHoldingsCorporation,Philippines2004-2011 ExecutiveVicePresident-Business Development ElectricityGeneratingPublicCompany Limited1996-2004 SeniorVicePresident-Engineering BusinessDivision ElectricityGeneratingPublicCompany Limited2002-2003 ActingManagingDirector EgcomTaraCompanyLimited

51

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Page 54: Electricity Generating : Annual Report 2011

Mr. Piya Jetasanon (54) • Senior Executive Vice President - Finance and Corporate

Services

• Risk Management Committee Member

• Group Business Committee Member

• Good Corporate Governance Committee Member

• EGCO Management Committee

Education

• MBA,RamkhamhaengUniversity• B.A.(Economics),ThammasatUniversity• CertificateofDirectorsCertificationProgram, ThaiInstituteofDirectorsAssociation• CertificateofTLCPExecutiveDevelopmentProgram, ThaiListedCompaniesAssociation Working Experience

2011-Present Director GulfElectricPublicCompanyLimited2011-Present Director,BLCPPowerCompanyLimited2011-Present Director,EGCOInternational(BVI)Limited2011-Present Director NorthPoleInvestmentCompanyLimited2011-Present Director EGCOEngineering&ServiceCompany Limited2011-Present Director KhanomElectricityGeneratingCompany Limited2007-Present Director EGCOCogenerationCompanyLimited2007 Director,ThaiLNGPowerCorporationLtd.2005-2010 FirstSeniorVicePresident-Finance ElectricityGeneratingPublicCompany Limited2003-2005 SeniorVicePresident-Finance ElectricityGeneratingPublicCompany Limited1996-2003 Manager-FinanceDivision KhanomElectricityGeneratingCompany Limited1994-1996 Manager-TreasuryManagementSection ElectricityGeneratingPublicCompany Limited

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

• Director-Rayong Power Plant

• Risk Management Committee Member

• Group Business Committee Member

• Good Corporate Governance Committee Member

• EGCO Management Committee

Education

• B.Eng.(MechanicalEngineering),ChulalongkornUniversity• CertificateofDirectorsCertificationProgram, ThaiInstituteofDirectorsAssociation• CertificateinExecutiveLeadershipProgram, JointProgramNIDA-Wharton,UniversityofPennsylvania• GraduateDiplomainManagementofPublicEconomy(MPE-7), KingPrajadhipok’sInstitute Working Experience

2011-Present Director,BLCPPowerCompanyLimited2008-2009 DirectorandManagingDirector RayongElectricityGeneratingCompany Limited2009-Present Chairman,Roi-EtGreenCompanyLimited2009-Present Chairman EGCOGreenEnergyCompanyLimited2007-Present Chairman EGCOCogenerationCompanyLimited2009-Present Director KhanomElectricityGeneratingCompany Limited2009-Present Director EGCOEngineering&ServiceCompany Limited2008-2009 Director GulfCogenerationCompanyLimited NongkhaeCogenerationCompany Limited SamutprakarnCogenerationCompany Limited2006-2007 Director EGCOCogenerationCompanyLimited2001-2007 DeputyManagingDirectorOperation Group RayongElectricityGeneratingCompany Limited1998-2000 OperationDivisionManager RayongElectricityGeneratingCompany Limited

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

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Page 55: Electricity Generating : Annual Report 2011

Mr. Chankij Jearaphunt (56) • Senior Executive Vice President

• Managing Director - Khanom Electricity Generating

Company Limited

• Risk Management Committee Member

• Group Business Committee Member

• Good Corporate Governance Committee Member

• EGCO Management Committee

Education

• MasterofPublicAdministration(MPA)NationalInstituteof DevelopmentAdministration(NIDA)• B.Eng.(ElectricalEngineering),ChulalongkornUniversity Working Experience

2004-Present DirectorandManagingDirector KhanomElectricityGeneratingCompany Limited2004-Present Director EGCOEngineering&ServiceCompany Limited2004-September2009Director RayongElectricityGeneratingCompany LimitedApril2008-Present Director GulfEnergyCompanyLimited; GulfIPPCompanyLimited;and GulfPowerGenerationCompanyLimitedApril2007-April2009 Chairman Roi-EtGreenCompanyLimited;and EGCOGreenEnergyCompanyLimited2002-April2008 Director GulfCogenerationCompanyLimited; NongkhaeCogenerationCompany Limited SamutprakarnCogenerationCompany Limited2006-April2007 Director Roi-EtGreenCompanyLimited;and EGCOGreenEnergyCompanyLimited1998-2004 DeputyManagingDirector-Operation, KhanomElectricityGeneratingCompany Limited

Mr. Wajarapong Palakawong Na Ayudhya (58) • Managing Director - Egco Engineering & Service Company

Limited

• Risk Management Committee Member

• Group Business Committee Member

• Good Corporate Governance Committee Member

• EGCO Management Committee

Education

• BachelorDegreeofMechanicalEngineering, ChulalongkornUniversity• CertificateofDirectorsCertificationProgram, ThaiInstituteofDirectorsAssociation• CertificateofNIDAExecutiveLeadershipProgram, JointProgramNIDA-WhartonofUniversityofPensylvania• CertificationofTheSeniorExecutiveProgram, SasinGraduateInstitueofBusiness Working Experience

2011-Present Director KhanomElectricityGeneratingCompany Limited2011-Present Director EgcoEngineeringandServiceCompany LimitedMarch2011-Present Director CovantaPhilippinesOperatingInc.March2011-Present ManagingDirector EGCOEngineering&ServiceCo.,Ltd.May2008-Present Chairman,EGCOMTaraCo.,Ltd.November1999- Director,AgroEnergyCo.,LtdPresentMay1997- DeputyManagingDirector-OperationFebruary2011 EGCOEngineering&ServiceCo.,Ltd.

53

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Page 56: Electricity Generating : Annual Report 2011

Mr. Suvapan Chomchalerm (51) • Executive Vice President - Finance

Education

• M.Sc.(Accounting),ThammasatUniversity• B.Sc.(Accounting),ChulalongkornUniversity Working Experience

May2010-May2011 DeputyManagingDirector&Chief FinancialOfficer(EGCO’sRepresentative) BLCPPowerLimited2000-April2010 SeniorVicePresident-Accountingand BudgetDivision ElectricityGeneratingPublicCompany Limited1994-2000 Manager-AccountingandBudgetAnalysis Section,AccountingandBudgetDivision

Mr. Nattanont Meesuksabai (51) • Senior Vice President - Accounting and Budget Division

Education

• MasterofBusinessAdministration(MBA), ChulalongkornUniverity• B.Sc.(CostAccounting),ChulalongkornUniversity Working Experience

2011-Present SeniorVicePresident-Accountingand BudgetDivisionManager ElectricityGeneratingPublicCompany Limited2009-April2011 AdministrationDivisionManager EGCOEngineeringandServiceCompany Limited2005-2009 InternalAuditSectionManager ElectricityGeneratingPublicCompany Limited1997-September2005AccountingSectionManager ElectricityGeneratingPublicCompany Limited

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

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Page 57: Electricity Generating : Annual Report 2011

Ms. Somsiri Yoosook (47) • Senior Vice President - Finance Division

Education

• MasterofBusinessAdministration(Finance), YoungstownStateUniversityU.S.A.• BachelorofScience(Accounting)(2ndClassHonors), KasetsartUniversity Working Experience

2011-Present SeniorVicePresident-Finance ElectricityGeneratingPublicCompany Limited2003-April2011 VicePresident-SubsidiariesFinance ElectricityGeneratingPublicCompany Limited2001-2002 VicePresident-ProjectFinance ElectricityGeneratingPublicCompany Limited1996-2003 Manager-LoanSection KhanomElectricityGeneratingCompany Limited1994-1995 Manager-DisbursementSection ElectricityGeneratingPublicCompany Limited

55

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Page 58: Electricity Generating : Annual Report 2011

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

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Page 59: Electricity Generating : Annual Report 2011

1

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Page 60: Electricity Generating : Annual Report 2011

95.0%

74.2%

EGCO’s Group Structure and ShareholdersAs at 31 December 2011

ESCO

100.0% 100.0% 74.0% 80.0% 100.0%

EGCO-Rayong

Egcom Tara

AE

EGCO Green

Roi-Et Green EGCO BVI NED Wind

100.0%

GCC

100.0%

NKCC

100.0%

SCC

100.0%

GEN

100.0%

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100.0%

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100.0%

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EGCO Cogen KEGCO North Pole East Water

EGAT25.41%

TEPDIA23.94%

General Public50.65%

100.0%

58

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Page 61: Electricity Generating : Annual Report 2011

73.3%

QPI

98.0%

QPL

EGCO’s Group Structure and ShareholdersAs at 31 December 2011

50.0% 100.0% 33.3% 50.0% 35.0% 18.7%

Egcom Tara

EGCO Green

Roi-Et Green

100.0%

EGCO BVI

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Conal

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55.0%

SPPC

55.0%

WMPC

100.0%

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26.7%

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PEPOI

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General Public

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Page 62: Electricity Generating : Annual Report 2011

EGCO’s Organization StructureAs at 31 December 2011

Board of Corporate Governance & Social

Responsibility Committee

SEVP BusinessDevelopment International

SEVP Finance &Corp Services

SEVP BusinessDevelopment DomesticRayong Power Plant

Nomination &Remuneration Committee

Investment Committee

Corporate Secretary

EVP BD(International)

ProjectDevelopers

EVP BD(Domestic)

ProjectDevelopers

EVP Asset EVP Corporate

& Admin

EVP Strategy &

Corporate Planning

Human Resources

EVP Finance

And Budget

Internal AuditSeconded Management

To Subsidiaries

Audit Committee

Report Functionally

Report Administratively

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EGCO’s Organization StructureAs at 31 December 2011

Board of DirectorsCorporate Governance & Social

Responsibility Committee

SEVP BusinessDevelopment International

SEVP Finance &Corp Services

SEVP BusinessDevelopment DomesticRayong Power Plant

Nomination &Remuneration Committee

Investment Committee

Corporate Secretary

EVP BD EVP BD EVP AssetManagement

AssetManagement

Engineering

ProjectManagement

EVP CorporateServices

Procurement& Admin

MIS

Legal

EVP Strategy &Corporate

Management

Corporate Planning

CorporateCommunications

Human Resources

EVP Finance

Finance

AccountingAnd Budget

Internal Audit

Controller

Seconded ManagementTo Subsidiaries

Audit Committee

President

Report Functionally

Report Administratively

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Page 64: Electricity Generating : Annual Report 2011

“...EGCO is a holding company, its main source

of revenue is from the dividend income from subsidiaries and share of profits from joint

ventures...”

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Page 65: Electricity Generating : Annual Report 2011

The Electricity Generating Public Company Limited or EGCO is the first independent power producer in Thailand incorporated on May 12, 1992 by the Electricity Generating Authority of Thailand (EGAT). Such incorporation marked the commencement of the Thai government’s privatization initiatives to allow broader private sector investment in the electricity generating sector. On March 23, 1994, EGCO was transformed into a public company and then listed on the Stock Exchange of Thailand (SET) on January 16, 1995.

Since EGCO is a holding company, its main source of revenue is from the dividend income from subsidiaries and share of profits from joint ventures which are located in both Thailand and the Asian region. EGCO Group companies either operate in the power sector with long term Power Purchase Agreement (PPA) or conduct other related business.

Business Lines

EGCO businesses can be categorized into 4 groups as follows :

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

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

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

Business Characteristics

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

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

Significant Events

As at December 31, 2011, EGCO Group operated 15 power plants with 4,419.99 megawatt equity. The power sold to EGAT under long term PPAs were 3,864.19 megawatt which accounts for 12.29% of the national installed capacity of 31,446.71 megawatt. Highlights of the events in 2011 were as follows :

1. January 4, 2011 and February 11, 2011, EGAT awarded EGCO the licenses for 2010 SPP Cogeneration projects in accordance with the resolution of the Energy Regulatory Commission. The projects are TJ Cogen, TP Cogen and SK Cogen, which are contracted with EGAT of 90 megawatt each.

2. March 1, 2011, EGCO acquired a 12.50% interest in Xayaburi Power Co., Ltd. (Xayaburi) from CH. Karnchang PCL. Xayaburi plans to develop a 1,285 megawatt run-of-river hydroelectric power plant on the Mekong River in Laos PDR. The COD is currently scheduled for January 2019.

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

4. March 29, 2011, EGCO Engineering and Service Co., Ltd., a subsidiary of EGCO signed the operation and maintenance services agreement for a 110 megawatt SPP Cogeneration power plant which is owned by Navanakorn Electric Co.,Ltd. and Toyo-Thai Corporation PCL.

5. April 1, 2011, OneEnergy Thailand Ltd. transferred all of its shares in EGCO to TEPDIA Generating B.V., a joint venture vehicle owned by Tokyo Electric Power Co., and Diamond Generating Asia, Ltd., a Mitsubishi Corporation’s subsidiary.

6. June 19, 2011, Khanom power plant Unit 1, a 75 megawatt barge-mounted power unit, was permanently shut down due to the expiration of PPA.

7. November 25, 2011, three SPP Cogeneration projects entered into the PPAs with EGAT. Details are as below :

7.1 TJ Cogen, a 125 megawatt SPP Cogeneration project located in Pathumthani province, entered into the PPA to sell 90 megawatt to EGAT for a 25-year term with the Scheduled Commercial Operation Date (SCOD) on June 1, 2017.

7.2 TP Cogen, a 125 megawatt SPP Cogeneration project located in Ratchaburi province, entered into the PPA to sell 90 megawatt to EGAT for a 25-year term with the SCOD on June 1, 2018.

7.3 SK Cogen, a 125 megawatt SPP Cogeneration project located in Ratchaburi province, entered into the PPA to sell 90 megawatt to EGAT for a 25-year term with the SCOD on June 1, 2019.

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8. December 22, 2011 the Lopburi Solar power plant, a 73 DC/55 AC megawatt thin film photovoltaic solar farm in Lopburi province, owned by Natural Energy Development Co., Ltd., started supplying electricity under the first stage (the 11 DC/8 AC megawatt) to EGAT.

1. IPP Group

1.1 RayongPowerPlant

Rayong power plant is the first IPP in Thailand located in Rayong province. It is a 1,232 megawatt power plant comprising four identical 308 megawatt combined cycle power blocks using natural gas as a primary fuel to generate and sell all net electricity output to EGAT under the 20-year Power Purchase Agreement (PPA).

In 2011, Rayong power plant generated and sold 2,126.70 million kilowatt-hour electricity output to EGAT. Its annual average Equivalent Availability Factor (EAF) was 93.09%.

1.2 KhanomElectricityGeneratingCompanyLimited(KEGCO)

EGCO directly holds a 100% stake in KEGCO which owns and operates Khanom power plant which is known as the largest independent power plant in the southern area of Thailand located in Nakhon Sri Thammarat province. It is a 824 megawatt power plant combining of two 75 megawatt barge-mouthed power units and one 674 megawatt combined cycle power block using natural gas as a primary fuel to generate and sell all net electricity output to EGAT under the 15-year PPA for barge-mouthed power unit 1 and the 20-year PPA for barge-mouthed power unit 2 and combined cycle power block.

On June 19, 2011, barge-mouthed power unit 1 was permanently shut down due to the expiration of the PPA.

In 2011, Khanom power plant generated and sold 5,816 million kilowatt-hour electricity output to EGAT. Its annual average EAF was 95.28%.

1.3 BLCPPowerLimited(BLCP)

EGCO directly holds a 50% stake in BLCP which owns and operates an IPP coal-fired power plant located in Rayong province. It is a 1,434 megawatt power plant comprising two identical 717 megawatt pulverized coal-fired power units using high quality bituminous imported from Australia as a primary fuel to generate and sell all net electricity output to EGAT under the 25-year PPA.

In 2011, BLCP power plant generated and sold 10,616.59 million kilowatt-hour electricity output to EGAT, while its annual average EAF for unit 1 and unit 2 were 93.79% and 92.74%, respectively.

1.4 GulfPowerGenerationCompanyLimited(GPG)

EGCO indirectly holds a 50% stake in GPG via its 50% ownership in Gulf Electric Public Company Limited (GEC). GPG owns and operates an IPP gas-fired power plant, called Kaeng Khoi 2 (KK2), located in Saraburi province. It is a 1,510 megawatt power plant composed of two 755 megawatt combined cycle power blocks using natural gas as a primary fuel to generate and sell all net electricity output to EGAT under the 25-year PPA.

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

Table 1. EGCO’s Business Line :

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2. SPP Group

2.1 EGCOCogenerationCompanyLimited(EGCOCogen)

EGCO directly holds an 80% stake in EGCO Cogen which owns and operates a SPP cogeneration power plant located in Rayong province. It is a 117 megawatt cogeneration power plant with steam supply of 30 tons per hour using natural gas as a primary fuel. EGCO Cogen can sell both electricity and steam outputs. Under the SPP firm cogeneration program, it signed a 60 megawatt contracted capacity with EGAT under the 21-year PPA, while the rest of capacities were signed with the industrial users in Rayong Industrial Park under the long-term PPAs.

In 2011, EGCO Cogen power plant generated and sold 709.92 million kilowatt-hour electricity output to its customers. Its annual average EAF was 98.12% and the steam output to the industrial user was 52,218 tons.

2.2 Roi-EtGreenCompanyLimited(Roi-EtGreen)

EGCO indirectly holds a 70.30% stake in Roi-Et Green via EGCO Green Company Limited. Roi-Et Green owns and operates a SPP renewable power plant located in Roi-Et province. It is a 9.9 megawatt biomass-fired power plant using rice husk as a primary fuel. Under the SPP firm renewable program, it signed an 8.8 megawatt contracted capacity with EGAT under the 21-year PPA.

In 2011, Roi-Et Green power plant generated and sold 60.35 million kilowatt-hour electricity output to EGAT, while its annual average EAF was 86%.

2.3 GulfCogenerationCompanyLimited(GCC)

EGCO indirectly holds a 50% stake in GCC via GEC. GCC owns and operates a SPP cogeneration power plant located in Saraburi province. It is a 110 megawatt cogeneration power plant with steam supply of 16 tons per hour using natural gas as a primary fuel. GCC can sell both electricity and steam outputs. Under the SPP firm cogeneration program, it signed 90 megawatt contracted capacity with EGAT under the 21-year PPA, while the rest of capacities were signed with the industrial users under the long-term PPAs.

In 2011, GCC power plant generated and sold 744.31 million kilowatt-hour electricity output to the customers, while its annual average EAF was 98.16% and the steam output to the industrial users was 126,528 tons.

2.4 NongKhaeCogenerationCompanyLimited(NKCC)

EGCO indirectly holds a 50% stake in NKCC via GEC. NKCC owns and operates a SPP cogeneration power plant located in Saraburi province. It is a 126 megawatt cogeneration power plant with steam of 24 tons per hour using natural gas as a primary fuel. NKCC can sell both electricity and steam outputs. Under the SPP firm cogeneration program, it signed 90 megawatt contracted capacity with EGAT under the 21-year PPA, while the rest of capacities were signed with the industrial users under the long-term PPAs.

In 2011, NKCC power plant generated and sold 842.34 million kilowatt-hour electricity output to the customers, while its annual average EAF was 98.45% and the steam output to the industrial users was 151,630 tons.

2.5 SamutprakarnCogenerationCompanyLimited(SCC)

EGCO indirectly holds a 50% stake in SCC via GEC. SCC owns and operates a SPP cogeneration power plant located in Samutprakarn province. It is a 126 megawatt cogeneration power plant with steam of 24 tons per hour using natural gas as a primary fuel. SCC can sell both electricity and steam outputs. Under the SPP firm cogeneration program, it signed 90 megawatt contracted capacity with EGAT under the 21-year PPA, while the rest of capacities were signed with the industrial users under the long-term PPAs.

In 2011, SCC power plant generated and sold 817.53 million kilowatt-hour electricity output to the customers, while its annual average EAF was 98.63% and the steam output to the industrial users was 140,586 tons.

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2.6 GulfYalaGreenCompanyLimited(GYG)

EGCO indirectly holds a 50% stake in GYG via GEC. GYG owns and operates a SPP renewable power plant located in Yala province. It is a 23 megawatt biomass-fired power plant using parawood residue as a primary fuel. Under the SPP firm renewable program, it signed 20.2 megawatt contracted capacity with EGAT under the 25-year PPA.

In 2011, GYG power plant generated and sold 157.99 million kilowatt-hour electricity output to EGAT, while its plant annual average EAF was 94.33%.

2.7 NaturalEnergyDevelopmentCompanyLimited(NED)

EGCO directly holds a 33.33% stake in NED which owns and operates a 73 DC/55 AC megawatt thin film solar power plant (Lopburi Solar) located in Lopburi province. NED signed a PPA with EGAT for the sale of all net electricity output generated. The term of the PPA is 5 years from the Commercial Operation Date (COD) and will be renewed for 5-year contract each time. NED is subsidized with adder of 8 baht per kilowatt-hour on top for 10 years of its wholesale tariff.

At December 31, 2011 the overall progress of construction project was 95% a slightly ahead target. The first stage of 11 DC/8 AC megawatt achieved the official COD on December 22, 2011 that was slightly delayed from the scheduled COD in November 2011.The full scale generation of all seven phases are planned achieve within May 2012.

3. Overseas Group

3.1 ConalHoldingsCorporation(CHC)

EGCO indirectly holds a 40% stake in CHC via EGCO International (B.V.I.) Limited (EGCO BVI). CHC is the largest IPP in the Mindanao Island, Philippines. CHC holds the shares in 2 electricity generating companies and 1 operation and maintenance service company.

Western Mindanao Power Corporation (WMPC)

EGCO indirectly holds a 17.6% stake in WMPC via CHC. WMPC owns and operates an IPP power plant located in Zamboanga city, Philippines. It is a 109.6 megawatt diesel power plant using a bunker-c fuel oil as a primary fuel. Under the Build-Operate- Own (B-O-O) scheme, it generates and sells all net electricity output to National Power Corporation (NPC) under the 18-year Energy Conservation Agreement (ECA).

In 2011, WMPC power plant generated and sold 442.88 million kilowatt-hour electricity output to NPC, while its annual average EAF was 91.41%.

Southern Philippines Power Corporation (SPPC)

EGCO indirectly holds a 17.6% stake in SPPC via CHC. SPPC operates and owns an IPP power plant called Gen Santos located in Sarangani province, Philippines. It is a 54.8 megawatt diesel power plant using bunker-c fuel oil as a primary fuel. Under the B-O-O scheme, it generates and sells all net electricity output to NPC under the 18-year ECA.

In 2011, SPPC power plant generated and sold 268.43 million kilowatt-hour electricity output to NPC, while its annual average EAF was 90.26%.

Alto Power Management Corporation (APMC)

APMC provides operation and maintenance services including plant management and consulting to the two above-mentioned power plants and also third-party power plants.

3.2 QuezonPower(Philippines),LimitedCompany(QPL)

EGCO indirectly holds 52.13% stake in QPL via North Pole Investment Company Limited (North Pole) and EGCO BVI. QPL owns and operates a 502.50 megawatt pulverized coal-fired power plant using the high quality coal imported from Indonesia as a primary fuel. Under the 25-year PPA, it generates and sells net electricity output to Manila Electric Company (MERALCO), the country’s largest power distribution company, and also provides additional load stability of Luzon power grid.

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In 2011, Quezon power plant generated and sold 3,269.31 million kilowatt-hour electricity output to MERALCO, while its annual average EAF was 86.52%.

3.3 NamTheun2PowerCompanyLimited(NTPC)

EGCO directly holds 35% stake in NTPC, which owns and operates a 1,086.80 megawatt hydroelectric power plant located in Lao PDR. It generates and sells 948 megawatt contracted capacity to EGAT and 75 megawatt contracted capacity to Electricite du Laos (EDL) under the 25-year PPAs.

In 2011, NT2 power plant generated and sold 5,956.68 million kilowatt-hour electricity output to EGAT and 404.16 million kilowatt- hours electricity output to EDL.

4. Other Businesses

4.1 EGCOEngineering&ServiceCompanyLimited(ESCO)

ESCO is EGCO’s wholly owned subsidiary which provides operation, maintenance, engineering and construction services to power plants, petrochemical plants, oil refineries and other industries including the Group companies.

4.2 EgcomTaraCompanyLimited(EgcomTara)

As at December 31, 2011 EGCO holds 74.19% stake in Egcom Tara via ESCO. Under a 30-year agreement, Egcom Tara produces tap water according to Thai Industrial Standard (TIS) and supplies to the 3 water stations of the Provincial Waterworks Authority of Thailand (PWA), namely, Lak Muang Water Station, Damnoen Saduak Water Station and Samut Songkhram Water Station.

4.3 EasternWaterResourcesDevelopmentandManagementPublicCompanyLimited(EastWater)

As at December 31, 2011 EGCO holds 18.72% of shares in East Water which is responsible for developing and operating the main raw water pipe network in the Thailand Eastern Seaboard area covering 7 provinces namely, Rayong, Chonburi, Chachoengsao, Prachinburi, Srakaew, Chantaburi and Trad.

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Revenue Structure

Product Transaction % 2011 2010 (Restated) 2009

Service Shareholding

Electricity IPP 33.27% 35.25% 38.31%

Rayong power plant/A (formerly REGCO)

Capacity Charge 2,201.28 16.54% 2,454.12 16.25% 3,674.60 23.30%

Energy Charge 57.05 0.43% 81.16 0.54% 47.49 0.30%

KEGCO 99.99%

Capacity Charge 2,098.32 15.77% 2,772.83 18.36% 2,304.26 14.61%

Energy Charge 72.08 0.54% 15.61 0.10% 13.55 0.09%

SPP 17.95% 15.26% 14.12%

EGCO Cogen 80.00%

Energy Charge 2,064.46 15.51% 2,002.04 13.25% 1,927.49 12.22%

Roi-Et Green 70.30%

Energy Charge 324.60 2.44% 302.85 2.01% 298.94 1.90%

Service ESCO 99.99% 375.93 2.82% 721.54 4.78% 611.41 3.88%

PEPOI/B 100.00% 198.75 1.49%

Water Egcom Tara/C 74.19% 268.56 2.02% 258.83 1.71% 267.33 1.70%

Interest EGCO 141.21 1.06% 67.05 0.44% 66.50 0.42%

income Rayong power plant 4.38 0.03% 5.37 0.04% 9.03 0.06%

KEGCO 9.71 0.07% 6.56 0.04% 10.15 0.06%

EGCO cogen, EGCO Green, ESCO,

Egcom Tara, PEPOI, North Pole/D 21.10 0.16% 9.90 0.07% 11.71 0.07%

Others EGCO 208.91 1.57% 236.16 1.56% 175.46 1.11%

Rayong power plant 49.20 0.37% 47.99 0.32% 55.38 0.35%

KEGCO 1.12 0.01% 3.08 0.02% 9.34 0.06%

EGCO cogen, EGCO Green, ESCO,

Egcom Tara 13.48 0.10% 10.08 0.07% 11.88 0.08%

Share of BLCP 50.00% 1,849.03 13.89% 2,851.98 18.88% 3,226.45 20.46%

profit (loss) GEC 50.00% 1,836.18 13.80% 2,450.32 16.22% 2,535.21 16.08%

NED 33.33% (28.21) (0.21%) (22.69) (0.15%) (10.91) (0.07%)

NTPC/E 35.00% 1,045.62 7.86% 107.27 0.71% (38.83) (0.25%)

Conal 40.00% 19.66 0.15% 139.58 0.92% 63.07 0.40%

Quezon/F 52.125% 477.41 3.59% 582.76 3.86% 498.36 3.16%

Totalrevenues(revenuesiteminconsolidated) 13,309.84 100% 15,104.40 100% 15,767.89 100%

(Million Baht)

Revenue % Revenue % Revenue %

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

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Power Industry and Competition

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

Figure 1: Peak Power Demand Monthly 2010 - 2011

Source: EGAT

As regards the power consumption in 2011, the total electricity sold by the Electricity Generating Authority of Thailand (EGAT) was 0.84% lower from that of 2010.

In 2012, EGAT expects the demand for electricity demand will growth more than 4 percent from 2011 after recovering from the flooding. The factory especially the automotive parts industry sector, the electronics sector to accelerate the return to production early year.

The Thailand Power Development Plan is revised by The Ministry of Energy.

PeakDemand2010-2011

26,000

25,000

24,000

23,000

22,000

21,000

20,000

19,000

18,000

17,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

MW

2010 2011

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EGCO’s Competitiveness

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

1. EGCO is creditable among the financial source and investors.

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

Opportunity of new entrants

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

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

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

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

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Shareholder and Management Structure

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

Category No. of Shares (million shares) Amount (million baht)

Registered Capital 530 5,300

Paid Up Capital 526.465 5,264.65

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

Remarks/1 Excluding 63,052,929 shares under Thai NVDR which account for 11.977% of the total outstanding shares. Such

NVDR holders do not have the right to vote at the shareholders’ meeting. Information of investors under Thai NVDR

Co., Ltd. is shown on the website : www.set.or.th/nvdr/

No. Shareholders /1 Shares % of Total

1. Electricity Generating Authority of Thailand 133,773,662 25.410

2. TEPDIA Generating B.V. 126,054,178 23.944

3. Littledown Nominees Limited 28,943,528 5.498

4. Bangkok Life Assurance Public Company Limited 10,019,300 1.903

5. Social Security Office (Two-types) 6,387,300 1.213

6. HSBC (SINGAPORE) NOMINEES PTE LTD 5,024,150 0.954

7. Thanachart Life Assurance Company Limited 5,019,300 0.953

8. THE BANK OF NEW YORK (NOMINEES) LIMITED 4,632,091 0.880

9. Chase Nominees Limited 15 4,330,760 0.823

10. STATE STREET BANK EUROPE LIMITED 4,165,941 0.791

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The ultimate shareholders of EGCO’s major controlling shareholders are as follows.

1. Electricity Generating Authority of Thailand (EGAT) : EGAT is a state utility with the objectives to generate, purchase, transmit and distribute electricity. EGAT also provides the operation and maintenance services and invests in electricity related business. EGAT holds 25.41% of EGCO’s outstanding shares. EGAT has four representative directors of all 15 directors in EGCO.

2. Diamond Generating Asia (DGA), a Mitsubishi Corporation (MC)’s subsidiary, MC is a technology development and trading company in industrial and energy sector. MC indirectly holds 11.972% of EGCO’s outstanding shares via TEPDIA Generating B.V.. MC has two representative directors of all EGCO’s 15 directors.

3. Tokyo Electric Power Company (TEPCO) : TEPCO is the largest electric power company in Japan and the largest privately owned electric utility in the world. TEPCO indirectly holds 11.972% of EGCO’s outstanding via TEPDIA Generating B.V.. TEPCO has two representative directors of all EGCO’s 15 directors.

Organization Structure

At the top of EGCO’s organization structure is the Board of directors, the standing committees, the President and the top management.

1. Board of Directors

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

Currently, the Board comprises 15 members :

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

• President, the only one executive member.

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

Appointment No. of shares No. Name Position Date December December Increase 31, 2011 31, 2010 (Decrease)

1 Mr. Pornchai Rujiprapa Chairman January 1, 2009 - - -

2 Mr. Aswin Kongsiri Independent Director April 24, 2009 - - - / Vice Chairman

3 Mr. Chaipat Sahasakul Independent Director April 21, 2011 - - -

4 Mr. Thanapich Mulapruk Independent Director April 24, 2009 - - -

5 Police Lieutenant General Independent Director April 24, 2009 - - - Pijarn Jittirat

6 Mr. Somphot Kanchanaporn Independent Director April 22, 2010 - - -

7 Mr. Phaiboon Siripanoosathien Independent Director April 21, 2011 - - -

8 Mr. Surasak Supavitipatana Director November 16, 2011 - - -

9 Mr. Kulit Sombatsiri Director December 13, 2011 - - -

10 Mr. Hideaki Tomiku Director April 22, 2010 - - -

11 Mr. Toshiro Kudama Director February 28, 2011 - - -

12 Mr. Akio Matsuzaki Director February 28, 2011 - - -

13 Mr. Ryota Sakakibara Director February 28, 2011 - - -

14 Mr. Vinit Tangnoi1 President / Director April 22, 2010 - - -

15 Mr. Sahust Pratuknukul2 President April 22, 2010 1,890 1,890 -

Remark 1 Mr. Vinit Tangnoi’s contract as President expired on September 30, 2011. However, he continued his directorship until his resignation on January 1, 2012.

2 Mr. Sahust Pratuknukul was appointed a director and the President on April 22, 2010 and October 1, 2011 respectively.

1 Mr. Peter Albert Littlewood Director February 23, 2011 - - -

2 Mr. Mark Jobling Director February 23, 2011 - - -

3 Mr. Shinji Tsuchiya Director February 23, 2011 - - -

4 Mr. Wisudhi Srisuphan Director February 28, 2011 - - -

5 Mr. Somboon Arayaskul Director October 1, 2011 - - -

6 Mr. Kurujit Nakornthap Director December 1, 2011 - - -

Retiring/ No. of shares No. Name Position Resigning Date December December Increase 31, 2011 31, 2010 (Decrease)

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

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IndependentDirectors

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

1. Holding shares not more than 0.5% of the paid-up capital with the voting right of EGCO, parent company, subsidiary company, associated company or any legal entity that may have the conflict of interest (including the connected persons as stipulated in section 258 of securities laws),

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

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

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

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

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

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

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

Thetermsofindependentdirectors

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

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

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AuthorizedDirectors

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

Appointment,Resignation,andDismissalofDirectors

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

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

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

BoardofDirectors’DutiesandResponsibilities

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

1. DutiestoEGCO

• To devote time to EGCO and conduct the business in compliance with the governance principles and EGCO’s Code of Conduct.

• To demonstrate independent judgment in overseeing EGCO business.

• To have full ethical and legal responsibility towards shareholders while taking into account the interests of other stakeholders.

• To endeavor to recruit competent key management who will fully devote themselves for the benefit of EGCO.

• To monitor EGCO’s business and the compliance with the laws, rules, regulations and contract provisions and will require the Management to submit report on EGCO’s significant matters to ensure effective corporate performance.

2. DutiestotheShareholders

• To endeavor to ensure that EGCO is financially viable, properly managed and constantly improved so as to protect and enhance the interests of the shareholders.

• To endeavor to ensure that the information disclosure is materially correct, complete, transparent and timely.

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

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

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3. DutiestoCreditors

• To endeavor to ensure that EGCO complies with the loan provision and that EGCO’s financial status is correctly disclosed.

• To seek professional advice in case of doubt about the likely impact on lenders such as when EGCO’s financial position is uncertain or insolvency may be pending.

4. DutiestootherStakeholders

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

5. DueDiligence

• To attend all Board meetings but where meeting attendance is not possible; directors will take appropriate step to obtain leave of absence.

• To acquire knowledge about EGCO, the statutory and regulatory requirements affecting directors in the discharge of their duties as EGCO director, and to be aware of the environment that has the impact on EGCO.

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

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

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

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

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

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

BoardofDirectors’PerformanceAppraisal

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

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

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

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2. Standing Committees’ Structure

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

AuditCommittee

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

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

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

2. Review the appropriateness and effectiveness of internal control systems, and internal audit functions and determine the Internal Audit Division’s independence, as well as approving the appointment, rotation and removal, and performance development and appraisal of the Chief Internal Audit.

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

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

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

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

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

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

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

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

10. Review with the Management the preparation of the Management’s Discussion and Analysis or MD&A and its disclosure in the Annual Report.

11. Review with the Management the risk management policy, the practice compliance with such policy, as well as EGCO’s risk management guidelines.

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

(a) an opinion on the accuracy, completeness and creditability of EGCO’s financial report,

(b) an opinion on the adequacy of EGCO’s internal control system,

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(c) an opinion on the compliance with the law on securities and exchange, the Exchange’s regulations, or the laws relating to EGCO’s business,

(d) an opinion on the suitability of an auditor,

(e) an opinion on the transactions that may lead to conflicts of interests,

(f) the number of the Audit Committee meetings, and the attendance of such meetings by each committee member,

(g) an opinion or overview comment received by the Audit Committee from its performance of duties in accordance with the charter, and

(h) other transactions which, according to the Audit Committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Board of Directors.

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

14. Review the Audit Committee Charter at least annually.

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

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

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

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

InvestmentCommittee

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

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

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

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

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

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

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

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

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

There were 11 meetings in 2011 of which the attendance rate was 89%.

NominationandRemunerationCommittee

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

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

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

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

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

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

5. To approve EGCO representatives to be directors of the subsidiary or associated companies according to equity proportion or shareholders’ agreement,

6. To endorse the performance evaluation of EGCO President,

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

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

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

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

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

12. To review risks associated with people management.

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

CorporateGovernanceandSocialResponsibilityCommittee

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

The mission of the CC Committee is detailed as follows.

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

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

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

3. Management Structure

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

• Business Development - International Group : This group is headed by a Senior Executive Vice President (SEVP). Under the SEVP, there is one Executive Vice Presidents (EVP) who supervise the business development (international).

• Business Development - Domestic Group : This group is headed by a Senior Executive Vice President (SEVP). Under the SEVP, there are two Executive Vice Presidents (EVP) who supervise the business development (domestic) and asset management.

• FinanceandCorporateServicesGroup:ThisgroupisheadedbySEVPwithtwoEVPstosupervisefinanceandcorporate services performance.

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

President

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

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

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

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

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

Management Team

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

1 Mr. Sahust Pratuknukul President 1,890 1,890 -

2 Mr. Piya Jetasanon Senior Executive Vice President - - - - Finance & Corporate Services

No.ofshares No. Name Title December December Increase 31,2011 31,2010 (Decrease)

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Corporate Secretary

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

Management Committees

EGCOhassetupthefollowingcommitteestoensuretheappropriatenessandefficiencyofbusinessmanagement.

Group Business Committee :

The Board of Directors appoints the Group Business Committee which comprises executives of EGCO Group in appropriate number.TheCommittee ischairedby thePresident.The termofoffice for theexecutives is thesameas theirexecutive terms.

The Group Business Committee is accountable for the following responsibilities

1. To act as the Board of Directors of the 100% equity subsidiaries namely KEGCO and ESCO,

2. To oversee that the operating assets comply with laws, regulations, governing documents and company’s regulations,

3. To consider and endorse the business plan, annual budget and KPIs for the operating assets to the Investment Committee for its consideration,

4. To direct asset management function to comply with the corporate plan and budget and meet both the short-term and medium- term corporate targets,

3 Mr. John Palumbo Senior Executive Vice President - - - - Business Development - International

4 Mr. Voravit Potisuk Senior Executive Vice President - - - - Business Development - Domestic

5 Mr. Chumsak Desudjit Director - Rayong Power Plant - - -

6 Mr. Chankij Jearaphunt Managing Director of KEGCO - - -

7 Mr. Wajarapong Palakawong Managing Director of ESCO - - - Na Ayudhaya

8 Mr. Suvapan Chomchalerm Executive Vice President - Finance - - -

9 Mr. Somsiri Yoosuk First Senior Vice President - - - - Finance Division

10 Ms. Nattanont Meesuksabai Senior Vice President - - - - Accounting and Budget Division

No.ofshares No. Name Title December December Increase 31,2011 31,2010 (Decrease)

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5. TooverseeEGCO’soperatingassetstoensurethattheoperatingresultsandreturnoninvestmentareinlinewiththeplan andprojectionunderthesupportoftheAssetManagementandPlanningGroup,

6. Topropose/endorsetheorganizationalstructure,restructuringandgovernanceofGroupCompanies(Divisionlevelup), and

7. Torecommendtheappointment,rotationandremovaloftheManagingDirectorsandDeputyManagingDirectorsofthewholly ownedsubsidiariesfortheNominationandRemunerationCommittee’sapproval.

TheGroupBusinessCommittee’meetingsarecalledasnecessary.In2010,therewere5meetings.

EGCO Management Committee :

EGCOManagementCommitteecomprisesexecutivesofEGCOGroupinappropriatenumber.TheCommitteeischairedbythe President.EGCOManagementCommitteeisresponsibleforformulatingbusinesspolicyofEGCOGroup,scrutinizingallproposals tobepresentedtotheBoardandstandingcommitteesandmonitoringtheoperationoftheGroup.

TheEGCOManagementCommitteemeetingsarecalledasnecessary.In2011,theCommitteeheld12meetings.

Good Governance Committee :

TheGoodCorporateCommitteecomprisesexecutivesofEGCOGroupinappropriatenumber.TheCommitteeischairedbythe President.TheGoodCorporateCommitteeisinchargeofthefollowingresponsibilities.

1. ToconsiderinternationalcriteriaandpracticesofGoodCorporateGovernanceandthoseoftheSETandSEC,

2. To formulate thepolicy,guidelinesandpracticesof theGroup incompliancewith theGoodCorporateGovernance, and

3. TorevisetheCodeofConducttosuitthebusinessenvironmentandtoeducateemployeesabouttheCodesaswellasproviding cooperationtopromotethepracticeintheGroup.

TheGoodCorporateGovernanceCommitteemeetswhennecessary.In2011,thereweretwomeetings.

Risk Management Committee :

TheRiskManagementCommitteecomprisesexecutivesofEGCOGroupinappropriatenumber.TheCommitteeischairedby the President. The Risk Management Committee meets when necessary and directly reports to the Audit Committee. Itsresponsibilitiesareasfollows.

1. TodeterminetheriskmanagementcriteriaforEGCOandsubsidiaries,

2. Todeterminetheriskmanagementevaluationandmitigation,

3. Tomonitorcompliancewithriskmanagementframework,

4. ToreviseEGCO’sriskfactorstocomplywiththeregulationsofthegoverningauthorities,and

5. ToreportitsperformancetotheAuditCommitteeandtheBoardofDirector.

In2011,theRiskManagementCommitteeheldsixmeetings.

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Safety Health and Environment Committee :

TheSafetyHealthandEnvironmentCommitteecomprisesexecutivesofEGCOGroupinappropriatenumber.TheCommittee is chaired by EVP-Asset Management. The Safety Health and Environment Committee is in charge of the following responsibilities.

1. Todeterminethepolicyandplanregardingsafety,healthandenvironment(SHE)ofEGCOGrouptobeincompliance withthestrategicplan,

2. ToimplementtheSHEactionplanforEGCOGroup,

3. TomonitorandevaluatetheSHEperformanceofEGCOGroup,and

4. ToimproveanddeveloptheSHEimplementationofEGCOGroup.

TheSafetyHealthandEnvironmentCommitteemeetswhennecessary.In2011,therewasnomeeting.

4. DirectorandManagementSelection

Toensure theappropriatenessofdirectorandmanagement selection for efficientgovernance,EGCOsetsup the following framework.

Director Election and Appointment

EGCOendeavorstoselectcapabledirectorstogovernthecompany,designatethecorporatepoliciesandsanctionitsbusiness plansforthebenefitofEGCOandshareholders.Withrespecttothis,EGCOputsanemphasisonthedirectornominationand selectionprocesstakingintoaccountthefollowingqualificationsandexperiencesinconsideringeachindividualcandidates.

1. LegalrequirementandregulationsandnotificationsofSETandSECregardingthedirectors’qualifications,

2.Directors’qualificationsprescribedinDirectors’CodeofConductnamelyhonesty,virtue,initiativeandachievement,excellence, accountability,justice,independence,equalityofshareholderopportunity,

3.KnowledgeandexperiencesbeneficialtoEGCO’sbusiness,

4. Trainingsandexperienceatthepolicymakinglevelincorporategovernance,

5.Willingnesstorepresentthebestinterestsofallshareholders,and

6.WillingnesstodevotetimeandefforttocontributetoEGCO’sdevelopment.

TheBoardhasdelegatedtotheNominationandRemunerationCommitteethedutyofselectingandrecommendingprospective nominees,whethertheyaretobecometheshareholders’representativesorindependentdirectors,fortheBoard’sapproval.The NominationandRemunerationCommittee isalso responsible forassessing theappropriatemixof skillsandcharacteristics requiredofBoardmembersinthecontextoftheneedsoftheBoardatagivenpointintimeandshallperiodicallyreviewand updatethecriteriaasdeemednecessary.Thenominationofdirectorstosucceedthosewhoretirebyrotationmustbeindividually approvedattheshareholders’meetingbasedonthevotingguidelinesintheArticlesofAssociationasfollows.

1. Eachshareholdershallbeentitledtothenumberofvotesequivalenttothenumberofsharesheldbyhim/her;oneshareshall haveonevote.

2. Eachshareholdershallelectoneormoredirectors,providedthattheyshallnotexercisetheirvotesinexcessofthenumber ofdirectorsrequiredatsuchtime.

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3. Inacasethatashareholderelectsmorethanonedirector,s/hemayexerciseallthevotess/hehas,providedthats/hemay notsplithisvotesamonganysuchpersons.

4. Thepersonsreceivingthehighestnumberofvotesinrespectiveordershallbeappointeddirectorsdependingontherequirements ofdirectorssetatsuchtime.Intheeventthatanumberofpersonsreceiveanequalnumberofvotesforthelastdirectorship, theChairmanofthemeetingshallhaveacastingvote.

5.Directorsmustbeappointedbythevotenotlessthanfour-fifthoftheshareholderspresentandhavingtherighttovote.

Toensurethatshareholdershaveadequateinformationtomaketheirselection,EGCOshallpresentdetailsofagivennominee suchaseducationbackground,occupation,directorshipinothercompanies,relevantexperiences,andillegalactscommitted (ifany)inthenoticeofshareholders’meeting.Incaseofthere-election,theattendancerecordsandperformanceduringthepast yearshallalsobepresented.

Inthecaseofcasualvacancies,theNominationandRemunerationCommitteewillnominateaqualifiedcandidatewhodoesnot possessanyforbiddencharacteristicsasstipulatedunder thePublicCompanyAct forapprovalat thesubsequentBoardof Directors’meeting.Thedirectorwhofillsinthevacancyshallretaintheofficeforonlytheremainingtermofofficeofthedirector whoms/hereplaces.TheresolutionoftheBoardofDirectorsinthisrespectshallconsistofnotlessthanthree-fourththevotesof theremainingdirectors.

Right of Minority Shareholders

ToensurethatEGCOtreatsshareholdersequitably,theBoardencouragesminorityshareholderstomakerecommendationon thedirectorcandidateswithclearandtransparentproceduresaspostedonEGCOwebsite.

Director Orientation and Training

AllnewdirectorsmustparticipateinEGCO’sorientationprogram.Thisorientationwillincludepresentationsbyseniormanagement tofamiliarizenewdirectorswithEGCO’ssignificantissues,Directors’ManualandEGCO’sCodeofConductforDirectorsand Employees.Anysittingdirectorsandothertopmanagementmayattendtheorientationprogram.

Theinformationofthedirectors’manualcomprisesrole,dutyandresponsibility,Securities’DealingbyDirectors,Notificationof Personal InterestofDirector,MeetingManagement,DisclosurePolicy,Contactwithmanagement,Board’sandCommittees’ RemunerationandFringeBenefits,TableofAuthorityandEGCOgeneralinformation.

EGCOencouragesdirectorstoattendbothin-houseandexternalcoursestoenhancetheirknowledgeandunderstandingon goodcorporategovernance.DirectorscanapplyforthetrainingcoursesattheThaiInstituteofDirectorsorrelevantorganizations onEGCO’sexpenses.

Management Selection and Appointment

TheBoarddeterminespoliciesandprinciplesforselectionofthePresidentandpoliciesregardingsuccessionintheeventof anemergencyortheretirementofthePresidenttakingintoaccounteducationalbackground,experiences,capabilities,ethics and leadership. TheNomination andRemunerationCommittee shall consider andpropose thequalifiedcandidates to the Board.

ThePresidentisentrustedtoselecttheknowledgeable,competentandexperiencedexecutivesinaccordancewiththequalifications andselectionprocessstatedinEGCORegulationonHumanResourceManagementB.E.2550andtheresolutionoftheBoard asfollows.

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1. The Nomination and Remuneration Committee shall approve the appointment of Senior Executive Vice President, Executive Vice President, the subsidiaries’ Managing Director and Deputy Managing Director.

2. The President shall appoint the division and section managers. The appointment of Secretary to the Board and the Assistant Secretary to the Board shall be approved by the Board of Directors while the appointment of Division Manager of Internal Audit shall be endorsed by the Audit Committee.

5. Director and Management Remuneration

EGCO sets the policy to reward directors and management with appropriate remuneration. In this respect, the Nomination and Remuneration Committee is entrusted to review the appropriate rate that takes into account the responsibility and the company’s financialstatuswhilebeinginlinewiththepeerpractices.

Director Remuneration

Director remuneration is appropriately set at a rate comparable to that of peer companies. The remuneration comprises (1) monthlyretainerfeetoreflectdirectors’responsibilities,(2)meetingallowancetoreflecttimedevotionandmeetingattendance, and (3) bonus which is paid in accordance with the shareholder value creation. The Nomination and Remuneration Committee will endorse the director remuneration for the Board’s endorsement before seeking the shareholders’ approval on an annual basis. The guidelines are as follows :

• Retainer fee and meeting allowance will be set in accordance with peer practices, EGCO operating performance, business size, and responsibility, knowledge, competencies and experience of the directors as required by the company.

• BonuswillbeconsideredfromtheCompany’snetprofitordividendpaidtoshareholders.

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

1. Monthly retainer fee of 30,000 baht and meeting allowance of 10,000 baht each. Members who do not attend the meeting will not receive the allowance. Chairman of the Board received 25% additional remuneration for both the retainer fee and the meeting allowance.

2. 2011 Bonus of 20 million baht, equal to 2010’s approved amount, taking into account the Company’s growth, the recognition in terms of good corporate governance, the increasing of share price, peers’ director bonus, and dividend payout ratio. Such bonuspaymentaccountedfor0.29%ofthenetprofitand0.70%of2010annualdividendpayment.

3. Remuneration for Board’s Committees being Investment Committee, Audit Committee, Nomination and Remuneration Committee, and Corporate Governance and Social Responsibility Committee as follows.

Committee

RetainerFee(baht) MeetingAllowance(baht)

Chairman Member Chairman Member

Investment Committee 25,000 20,000 25,000 20,000

Audit Committee 25,000 20,000 25,000 20,000

Nomination and Remuneration Committee 25,000 20,000 25,000 20,000

Corporate Governance and Social Responsibility Committee - - 30,000 24,000

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The overall directors’ remuneration for 2011 is summarized below.

/1 Standing Committees are 1. Investment Committee 2. Audit Committee, 3. Nomination and Remuneration Committee, 5. Corporate Governance and Social Responsibility

Committee /2 Bonus for Board of Directors in 2010 was paid in May 2011, as resolved by the Shareholders in the Annual General Meeting No.1/20101on April 21, 2011 /3 The retainer fee and meeting allowance be paid to Mr. Vinit Tangnoi during October 1, 2011- December 31, 2011 as the director. /4 The retainer fee and meeting allowance be paid to Mr. Sahust Pratuknukul during April 22, 2010 - September 30, 2011 as the director.

Appoinment No.ofmonths Meeting (MonthlyRetainer, Bonus/2 Total

No. Name Date inservice Attendance MeetingAllowance) Remuneration

(7Times/Year)

1. Mr. Pornchai Rujiprapa January 1, 2009 12 12 7/7 550,000.00 575,000.00 1,742,140.00 2,867,140.00

2. Mr. Aswin Kongsiri April 24, 2009 12 12 7/7 484,000.00 526,000.00 1,533,100.00 2,543,100.00

3. Mr. Chaipat Sahasakul April 21, 2011 12 12 7/7 440,000.00 700,000.00 1,393,730.00 2,533,730.00

4. Mr. Thanapich Mulapruk April 24, 2009 12 12 6/7 430,000.00 560,000.00 1,393,730.00 2,383,730.00

5. Mr. Somphot Kanchanaporn April 24, 2009 12 12 7/7 440,000.00 560,000.00 1,393,730.00 2,393,730.00

6. Police Lieutenant General April 24, 2009 12 12 7/7 440,000.00 488,000.00 1,393,730.00 2,321,730.00

Pijarn Jittirat

7. Mr. Phaiboon Siripanoosatien April 21, 2011 12 12 7/7 440,000.00 488,000.00 1,393,730.00 2,321,730.00

8. Mr. Surasak Supavitipatana November 16, 2 - 2/2 65,000.00 50,000.00 0 115,000.00

2011

9. Mr. Kulit Sombatsiri December 13, 1 - 1/1 29,000.00 0 0 29,000.00

2011

10. Mr. Hideaki Tomiku April 22, 2010 12 12 6/7 420,000.00 889,333.34 1,393,762.49 2,703,095.83

11. Mr. Toshiro Kudama February 28, 2011 10 - 6/6 371,000.00 0 0 371,000.00

12. Mr. Akio Matsuzaki February 28, 2011 10 - 4/6 351,000.00 0 0 351,000.00

13. Mr. Ryota Sakakibara February 28, 2011 10 - 6/6 371,000.00 380,666.67 0 751,666.67

14. Mr. Vinit Tangnoi/3 April 22, 2010 12 12 7/7 110,000.00 100,000.00 0 210,000.00

15. Mr. Sahust Pratuknukul/4 April 22, 2010 12 8 7/7 330,000.00 360,000.00 964,000.00 1,654,000.00

The summary of remuneration of Retired and resigned directors during 2010 - 2011 is as shown below

1. Mr. Apichart Dilogsopol April 22, 2010 - 4 - 0 0 429,730.00 429,730.00

2. Mr. Wisudhi Srisuphan February 28, 2011 2 6 1/1 67,000.00 0 1,393,730.00 1,460,730.00

3. Mr. Peter Albert Littlewood February 23, 2011 2 6 0/1 52,000.00 0 1,742,195.00 1,794,195.00

4. Mr. Mark Jobling February 23, 2011 2 12 1/1 62,000.00 154,666.67 1,576,675.01 1,793,341.68

5. Mr. Shinji Tsuchiya February 23, 2011 2 12 1/1 62,000.00 0 1,576,675.01 1,638,675.01

6. Mr. Somboon Arayaskul October 1, 2011 8 12 5/5 320,000.00 344,000.00 1,393,730.00 2,057,730.00

7. Mr. Kurujit Nakornthap December 1, 2011 9 - 5/5 333,000.00 0 0 333,000.00

Total 6,167,000.00 6,175,666.68 20,714,387.51 33,057,054.19

2011 2010 Director Standing Committee/1

TotalRemunerationin2011

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Management’s Remuneration

TheManagement’sremunerationwhichcomprisesbothsalaryandbonusaredesignedinawaythatwillreflectthecorporate and individual achievement based on the remuneration structure approved by the Board. EGCO periodically conducts the survey of the executive remuneration to ensure that the rate is comparable to their work and those of the peer companies.

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

/1 Executive Director is defined as director who is also management of EGCO. In this regard, the President is the executive director. He is not entitled to the retainer fee or

meeting allowance as member of the standing committees. /2 These included 7 management namely the President, Senior Executive Vice President –Business Development-International, Senior Executive Vice President-Business

Development-Domestic, Senior Executive Vice President-Finance & Corporate Services, Director-Rayong Power Plant, two Senior Executive Vice Presidents who are

seconded to be the Managing Directors of KEGCO and ESCO. Since the salaries of MDs of KEGCO and ESCO are paid by those companies. EGCO is responsible for

the remuneration of only five managements. /3 The 2010 Bonus was paid in January 2011.

Total Remuneration of Core Subsidiaries’ Management

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

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

(Unit : Baht)

Remuneration Directors Management Total Directors Management Total (7Persons) (7Persons) Remuneration (5Persons) (1Person)/3 Remuneration

Salary - 15,870,960.00 15,870,960.00 - 1,616,400.00 1,616,400.00

Bonus /1 - 6,048,848.09 6,048,848.09 - 690,845.40 690,845.40

Meeting Allowance /2 - - - - - -

Total - 21,919,808.09 21,919,808.09 - 2,307,245.40 2,307,245.40

Year2011

KEGCO EGCOCogen

(Unit : Baht)

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Other Remuneration

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

Year2010

Company Members Providentfund

EGCO 6 1,846,368

KEGCO 7 1,587,096

EGCO Cogen 1 161,640

(Unit : Baht)

6. Employees

EGCO

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

KeyAreas Members(Persons)

1. President 26

2. Business Development - International 8

3. Business Development - Domestic 29

4. Finance and Corporate Services 53

5. Strategic and Corporate Management 15

6. Rayong Power Plant • Operation 59 • Maintenance 40 • Others 38

Total 268

Core Subsidiaries

A. KEGCO

Employees

Total(person)

KEGCO

1. Operation 67

2. Maintenance 53

3. Others 31

Total 151

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B. EGCO Cogen

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

Therehasbeennosignificantturnoverandnoillegallabordisputeduringthepastthreeyears.

7. Employee Remuneration

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

Amount

Remuneration

EGCO/1 KEGCO EGCOCogen/2

Total Salary 246,130,390.06 138,080,699.94 2,973,890.00

Bonus /3 104,766,953.28 62,557,519.73 1,303,337.21

Provident Fund 23,028,613.99 23,947,524.39 262,409.00

Total 373,925,957.33 224,585,744.06 4,539,636.21

(Unit : Baht)

8. Human Resource Development Policy

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

EGCOGroupputshighpriorityoncontinuousdevelopmentof theemployee’sabilityandproficiencieswhich includescore, functional, and managerial/leadership competencies. In this regard, various projects and training courses have been developed covering individual studies, training with experts or resource persons, and sharing of experiences among peers. As a result, we can develop our employees in all dimensions including intelligence quotient (IQ), emotional quotient (EQ ), moral quotient (MQ), and adversity quotient (AQ).

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

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

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

• Criminalprosecution,excepttheviolationoftrafficrules,minoroffenceorinrespectofthesameoffence

• Bankruptcy or receivership.

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

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Audit Investment Nomination Corporate Group EGCO Good Risk Safety RemarkCommittee Committee andRemu- Governance Business Management Governance Management Healthand neration &Social Committee Committee Committee Committee Environment Committee Responsibility Committee Committee

Mr. Pornchai Rujiprapa Chairman Non-Executive Director

Mr. Aswin Kongsiri Member Chairman Independent director

Mr. Chaipat Sahasakul Chairman Independent director with finance and accounting background

Police Lieutenant General Member Member Independent Pijarn Jittirat director

Mr. Thanapich Mulapruk Member Independent director

Mr. Somphot Member Independent Kanchanaporn director

Mr. Phaiboon Member Member Independent Siripanoosatien director

Mr. Vinit Tangnoi Member Non-Executive Director

Mr. Surasak Supavititpatana Member Non-Executive Director

Mr. Kulit Sombatsiri Member Non-Executive Director

Mr. Toshiro Kudama Non-Executive Director

Mr. Hideaki Tomiku Member Chairman Non-Executive Director

Mr. Akio Matsuzaki Non-Executive Director

Mr. Ryota Sakakibara Member Non-Executive Director

Mr. Sahust Pratuknukul Member Member Chairman Chairman Chairman Chairman President

StandingCommittee ManagementCommittee

The positions of EGCO’s Board of Directors and Management in Standing Committees and Management Committees

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Audit Investment Nomination Corporate Group EGCO Good Risk Safety RemarkCommittee Committee andRemu- Governance Business Management Governance Management Healthand neration &Social Committee Committee Committee Committee Environment Committee Responsibility Committee Committee

President Member Member Chairman Chairman Chairman Chairman Management

Senior Executive Vice President Member Member Member Member Management - Finance & Corporate Services

Senior Executive Vice President Member Member Member Member Management - Business Development International

Senior Executive Vice President Member Member Member Member Management - Business Development Domestic

Director - Rayong Power Plant Member Member Member Member Management

Managing Director of KEGCO Member Member Member Member Management

Managing Director of ESCO Member Member Member Member Management

Executive Vice President - Member Member Member Management Strategy & Corporate Management

Executive Vice President - Member Chairman Management Asset Management

Senior Vice President - Legal Member

Senior Vice President - Member Corporate Communication

Senior Vice President - Member Human Resources

Senior Vice President - Secretary Secretary Member & Corporate Secretary Secretary

Senior Vice President - Secretary Member & Secretary Internal Audit Secretary

Vice President - Human Member Resources of Rayong Power Plant

Vice President - Safety of Member KEGCO

Vice President - Safety of ESCO Member

Power Plant Manager - Member EGCO Cogen

Power Plant Manager - Member Roi Et Green

Manager - Tap Water of Member Egcom Tara

Senior Vice President - Member & Asset Management Secretary

Assistant Vice President - Member Asset Management and Assistant Secretary

StandingCommittee StandingCommittee

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TheBoardofDirectors(Board)believesthatthegoodcorporategovernanceisasignificanttooltoensureefficientandtransparentmanagementtofostershareholders’andinvestors’trust.The Board then controls and oversees the company to conduct the business under the Good Corporate Governance Principles issued by the Stock Exchange of Thailand (SET) and the rules and regulations of Listed Company issued by the Securities and Exchange Commission (SEC) and the Capital Market Supervisory Board (CMSB) to continuously raise the governance ofEGCOtointernationallevelforefficientmanagementandsustainablebusinessgrowth.

Corporate Governance Policies

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

• Encouraging more understanding of the expectations of stakeholders;

• Improving the risk management practices;

• Enhancing the reputation of the organization and fostering greater public trust;

• Enhancing employee loyalty and morale and improving the safety and health of employees;

• Increasingproductivityandresourceefficiencyandreducingwaste;and

• Contributing to the long term viability of the organization.

Communication of Corporate Governance Policies

The Board discloses the Corporate Governance Policies on EGCO website. To facilitate the shareholders, the hard copies are provided upon a request to those who submit the form attached in the annual report to the corporate secretary.

During the past year, the Company communicated the Corporate Governance Policies to its employees via various channels as follows :

• Good corporate governance E-newsletter was issued every Monday, Wednesday and Friday to communicate news on good corporate governance, director information and best practices of other companies.

• Three trainings on good corporate governance were provided to the employees. The topics included Dhamma Seminar on “Corporate Governance” and overview of risk management. Good corporate governance was also one of the contents included in the new employees orientation session.

Corporate Governance Reportfor2011

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Monitoring of the Compliance with Corporate Governance Policies

The Board requires the compliance with the Corporate Governance Policies as one of the key performance indicators of EGCO Group of which the progress was monitored on a quarterly basis. In 2011, the Board endeavored to ensure that directors, Management and employees adopted the above policies as the guiding principles in discharging their duties. There was no report of any breach to the Corporate Governance Policies.

Based on the above commitment, EGCO is well recognized as an excellent showcase of good corporate governance companies by various institutions.

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

• 5th best public company on net margin in a poll conducted by Money and Banking Magazine;

• An excellent showcase for shareholder meeting with the full score of 100 in the quality assessment of 2011 Annual General Shareholders’ Meeting organized by the Thai Investors Association;

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

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

The SET asks listed companies to adopt the SET’s Good Corporate Governance Principles for year 2006 as deemed appropriate and to notify with reasons and substitute measures/ actions to the SET for items which can not be complied. The Board then prepares this report accordingly.

1. Rights of Shareholders

EGCO realizes the importance of Good Corporate Governance and respects the shareholders’ rights as an investor and an owner of the Company based on acceptable and reliable standard. In this respect, EGCO encourages the shareholders to exercise their rightsincludinglegalbasicrights.Examplesaretherighttoshareintheprofit,therighttoreceiveadequateinformation,andtherighttoattendandvoteforsignificantmattersattheshareholders’meetingsuchasappointmentorremovalofdirectors,remunerationofdirectors,appointmentofauditor,auditors’remunerationandothersignificantissueswhichimpactEGCO.

Beyond suchbasic rights, EGCOendeavors toprovide significant information to shareholders via thewebsite, newsletters andshareholders’ site visit.

1.1 Shareholders’ Meeting

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

Before the Shareholders’ Meeting

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

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adequate information to support their judgments. The Board also encourages shareholders to attend the meeting either in persons or by proxy. The practices in 2009 were as follows :

• EGCO disclosed the schedule and the agenda of the AGM via the SET’s Community Portal system and EGCO website on February 28, 2011, which was 52 days in advance of the AGM date.

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

• EGCO joined hands with the Thailand Securities Depository Co., Ltd (TSD) to invite shareholders to notify the intention to attend the shareholder’s AGM in advance via IVR system so that EGCO would provide adequate facilities to accommodate shareholders.

• EGCO encouraged shareholders to forward their questions with regard to the meeting agenda in advance to directors@ egco.comor facsimile number 0-2955-0956-7 in order that the shareholders could gain the utmost benefits from the meeting and that their rights would be fully observed.

On Shareholders’ Meeting Date

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

• Directors, Management and the external auditor were encouraged to attend the AGM and answer shareholders’ questions. All the fifteendirectors including theChairmanattended themeetingwhichaccounted for100%of theBoardmembers. The chairman and members of each standing committee also presented information to shareholders and answer shareholders’ questions.

• Services to facilitate shareholders who attended the meeting were provided. Map for meeting venue was attached in the notice to the AGM. There were the shuttle service at the parking area at MRT station and the entrance of the meeting venue for shareholders.

• Management,InvestorRelationandAccountingOfficerswelcomedshareholderstothemeetingandansweredtheirinquiries about EGCO business at the mini-exhibition and shareholder corner in front of the meeting hall.

• AnofficerfromTSD,thecompanyregistrar,providedtheshareholderservicesandansweredquestionsregardingdividend chequeandshareregistrationandcertificatesinfrontofthemeetingroom.

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

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

• TheChairmanconvenedthemeetinginaccordancewiththeprioritynotifiedintheagendadocument.Presentationforeach agenda item included the background, supporting rationales and proposals.

• The meeting was broadcasted via closed circuit television so that shareholders who were outside the meeting room could follow up the meeting proceedings.

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• Shareholders were equitably treated and were allowed adequate time to address their concerns at the meeting. The Chairman paidattentiontoclarifyallshareholders’inquiriesofwhichthequestionsandtheclarificationswererecordedintheminutes of meeting.

• PricewaterhouseCoopers Legal & Tax Consultants Ltd., (PwCLT) were engaged as the inspectors to look over registration documents, meeting quorum, compliance of the voting procedure with EGCO Articles of Association and the Chairman’s notification,votingcardcollectionandvotecounting.Inthisregard,PwCLTreportedthatthemeetingandthevotingprocedure of 2011 AGM was transparent and in compliance with the governing laws and the Articles of Association.

• The form to assess the quality of the AGM was disseminated to gather feedbacks for future improvement. The result of the surveyin2009indicatedthatshareholdersweresatisfiedwiththequalityofthenoticetothemeeting,meetingarrangement and meeting conduct.

There were 411 and 544 shareholders attending the 2011 AGM in person and by proxy, respectively, representing 395,885,697 shareswhichaccountedfor75.577%ofthetotalunitsofshares.Theattendanceratewasapproximatelythesameasthatof 2010 AGM in which 485 and 576 shareholders attended the meeting in person and by proxy, respectively, representing 410,811,147 shareswhichaccountedfor78.032%ofthetotalunitsofshares.

After the Shareholders’ Meeting

• EGCO posted the draft minutes of the meeting for shareholders’ review on EGCO website “www.egco.com” on May 6, 2011 which was within 14 days after the meeting date (April 21, 2011) as required by the SET. The minutes of meeting had included thesignificantmattersofeachagendaitems,shareholders’inquiriesandanswersbytheBoardincludingtheresolutionand thevotingforeachproposal.Theminutesofmeetingwasdulyfiledforfuturereference.

• EGCO broadcasted on its web site that shareholders who could not attend the meeting could request for CD of the meeting for free of charge.

• EGCOnotifiedthemeetingresolutionondividendpaymentviaSET’sportal.EGCOalsocoordinatedwiththeregistrartoensure that all the shareholders would receive the dividend.

• EGCO took all the recommendations of the shareholders for consideration and improvement of the AGM.

As a result of the above efforts, EGCO was honored as an excellent showcase for AGM of listed companies with the full score of 100 for the third year.

1.2 Shareholders’ Visit

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

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

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

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

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2. Equitable Treatment of Shareholders

2.1 Fair Treatment

The Board regularly reviews the governance structure and framework to ensure that the shareholders, including minority and foreign shareholders,aretreatedequitablyandthatEGCOproceduresdonotmakeitundulydifficultorexpensivetoobserveshareholders’ rights. The Board encourages shareholders to take part in EGCO’s governance and ensures that they are well informed about thesignificantdecisionsofEGCOasprescribedbylawsandtheArticlesofAssociation.

• EGCO strictly follows its policy not to raise any agenda items which had not been submitted to the shareholders in advance, to make sure that other shareholders would have a great deal of time to stud y relevant information before making their decisions. Every shareholder has a right to cast vote according to their numbers of shares on “a one share one vote” basis. EGCO has nevergrantedaprivilegeforsomespecificshareswhichlimitstherightsofothershareholders.

• To adhere to the best practice as recommended by the SET regarding the right of minority shareholders, EGCO announced via EGCO’s website and the SET’s portal the clear and transparent procedures for shareholders to recommend AGM agenda and to nominate director candidates to the Board during the period of November 2, 2010 - January 17, 2011 (about 60 days before the AGM date). The shareholders who would like to propose the agenda or director candidates should hold not less than100,000shareswhicharelowerthantheSET’srecommendedpracticeofholdingnotlessthan0.5%ofthetotalvoting rights of the company. In 2011, no minor shareholders recommended AGM agenda nor nominate director candidates in advance. (Remarks : The Board of Directors in the meeting on August 22, 2011 resolved to offer minority shareholders the right to recommend agenda and questions for 2012 AGM along with the director nominees to EGCO during the period of September 1 - December 31, 2011 in accordance with the criteria that the minority shareholders who were entitled to such right should holdtheminimumsharesof0.05%ofthetotaloutstandingshares(equivalentto263,230sharesasatSeptember1,2011)).

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

• Shareholders who could not attend in person could vote by proxy. The three proxy forms as introduced by Department of Business Development, Ministry of Commerce were provided which included the form that allowed the shareholders to direct thevoting.ThreeindependentdirectorswhodidnothavetheconflictofinterestswiththeAGMagendawereofferedasvolunteer proxies. In a bid to facilitate the shareholders, the proxy forms could be downloaded from EGCO’s website.

• Since most of the shareholders attending the meeting were Thai, the meeting was conducted in Thai. However, to facilitate foreign shareholders, EGCO prepared the notice of meeting in both Thai and English. English interpreting service was also provided at the meeting room.

• With the awareness that some shareholders might not be able to read the minutes of meeting on the SET’s and EGCO’s website, a hard copy of the minutes of meeting no. 1/2011 were delivered to each shareholder for review.

2.2 Prohibition of Abusive Conduct by Insiders

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

Directors

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

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

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• Directors must not buy or sell shares as a director of EGCO while in possession of information, which, if disclosed publicly, would be likely to materially affect EGCO share price.

• Directors must not provide to anyone any information which is not publicly available and which would have a material effect on the price or value of EGCO’s securities.

Employees

• Employees shall at all times observe the rules and regulations issued by the SET, the SEC and other governing laws which include the equitable disclosure to shareholders and the public.

• Any information disclosure to the public that will affect the business and EGCO’s stock must be approved by the President. Only the President or the assigned staff member is authorized to disclose such information.

• The Corporate Communications Division, the Corporate Secretary Division and the Investor Relations Section are responsible for disclosing EGCO information to the public while it is the responsibility of the information owner to provide the fact sheets.

EGCOalsosetsthepolicythatManagementandemployeeswhohavethe inside informationrelatingtofinancialstatements shouldrefrainfromtheirownsecuritytradingwithin45daysbeforeand24hoursafteradisclosuredate.Forothersignificantinside information, Management and employees should refrain from security trading from the day of acknowledgement until 24 hours after disclosure to public. In addition, EGCO has put in place the internal control system to prevent the leakage of any information before thepublicdisclosure.Suchmeasurewasapartofsignificantriskmanagement.Supervisorsalsohavetheresponsibilitytoensure thatthemeasuretosafeguardinsideinformationiseffective.Usinginsideinformationforownorotherbenefitsofsecuritytrading when that information has not made public is considered violating the Code of Conduct.

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

The Board sets the guidelines that directors and Management discloses to the Board whether they have a material interest in any transactionormatteraffectingEGCOtoensuretransparencyandtopreventconflictsofinterest.

• Directors will promptly notify EGCO when they or their family member is a partner or shareholder of any entity which may incurbenefitsorconflictsofinterestwithEGCO,acquireadirectorindirectinterestinanycontractmadewithEGCOorhold sharesordebenturesofEGCOoranyaffiliate.Directorsormanagementwithpotentialconflictofinterestshallrefrainfrom discussing and voting on such agenda item.

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

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

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

2. In case of any change during the quarter, the updated form should be submitted to the Corporate Secretary as soon as possible.

3. The Corporate Secretary shall submit the form to the Chairman and the Chairman of the Audit Committee within 7 days after getting such report.

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

3. Role of Stakeholders

3.1 Rights of Stakeholders

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

Employees

EGCO believes in the value of its human resources and will strive to be the employer of choice. This is achieved by promoting the participative management, supporting the employees’ professional development and providing fair remuneration and suitable benefitscheme.EGCOstrivestopreventaccident,injuryandoccupationalillnesses.Physicalcheckupwasprovidedinaccordance with the occupational health risks.

It should be noted that during the past year, there was no legal dispute between the employees and EGCO. In addition, there was no disabling injury in all subsidiaries. EGCO is proud to announce that the Rayong Electricity Generating Co., Ltd. (Rayong) andtheKhanomElectricityGeneratingCo.,Ltd.(KEGCO)havebeencertifiedtheOHSAS18001:1999(OccupationalHealthand Safety Assessment Series) by RWTUV (Thailand) and KEGCO has been honored the National Distinguished Workplace in terms of Safety, Occupational Health and Environment for 12 years consecutively.

Customers

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

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

Creditors

EGCOwill endeavor to ensure that it complieswith the loanprovision and that theCompany financial status is correctly disclosed.

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

Suppliers and Contractors

EGCOwilltreatsuppliersandcontractorsfairlyandwouldnotseekunduebenefitsfromthem.EGCOwillcomplywiththeconditions

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

Competitors

EGCO will conduct its business on a fair play basis. We will not use a disgraceful approach such as bribery in order to get competitors’sensitiveconfidentialinformation.EGCOwillalsorefrainfromattackingthecompetitorswithfalseallegations.

Community, Society and Environment

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

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

• Promotion and Development of Community’s “Quality of Life” : EGCO Group will put the prime focus on the quality of life of the surroundingcommunitiesbothattheheadofficeandatthepowerplants.Inthisregard,EGCOhasinitiatedandprovided supports to projects relating to education, villagers’ occupation and environment.

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

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

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

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

3.2 Observation of Human Rights

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

• EGCO will treat our employees with respect and honor.

• EGCO will provide a communication channel for employees to submit questions and complaints relating to work which we will seriouslyconsiderandremedytheproblemtobenefitandtopromotegoodrelationsamongallconcernedparties.

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

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• Employees’personalinformationshallbekeptwithutmostdiscretionandconfidentiality.Disclosureofpersonalinformation suchasemployee’biodata,healthrecord,workingexperienceoranyotherpersonalinformationtonon-relatedpartywithout thepermissionofsuchemployeeisconsideredaviolationoftheCodeofConductandmayresultinarangeofdisciplinary actionexceptwhenitisdoneinaccordancewiththeCompany’sregulationsorlegalrequirements.

• EGCOdidnotsupporttheviolationofhumanrightsandfrauds.

• Employeesmustrefrainfromanydeliberatediscriminationorharassmentinwordoractionagainstothersbasedonthebasis ofrace,gender,religion,age,andphysicalormentaldisability.

EGCOalsosetclearguidelinesforlaborengagementoftheCompanyanditsbusinesspartnerstostrictlycomplywiththeLabor Actsuchasnoengagementofchildlabororabusivehiring.Inaddition,theworkingsystemisdesignedtoputpriorityonsafety andoccupationalhealth.TherehasneverbeenanyreportontheviolationofhumanrightsbyEGCO.

3.3IntellectualProperty

EGCOwillcomplywiththelegalrequirementsonintellectualpropertyandcopyrights.Employeesmustcheckbeforehandthatthe workorinformationthatbelongstothirdpartiescanbeusedwithinEGCOGroupwithoutviolatingtheintellectualpropertyof others.

3.4MeasuresagainstCorruptionandBribery

EGCOsetthepolicytoworkagainstcorruptionandbribery.Inthisregard,EGCOCodeofConductprescribesthatemployees areprohibitedfromsolicitingoracceptinganyadvantagefromthirdpartiesthatmayimpairtheirobjectivityorweakentheirability topromotethebestinterestsofEGCOGroup.Employeesshallrefrainfromofferingtheadvantagetooutsidepersonsasamotive forhimtodoorrefrainfromdoinganyillegalandwrongfulact.

OnNovember9,2010,EGCOjoinedtheprojectonCollectiveActionCoalitiontofightagainstcorruptionintheprivatesector.Such coalitionwasinitiatedbytheIOD,theThaiChamberofCommerce,internationalchambersofcommerceandThaiListedCompanies Association.SuchprojectwasnationalprojectbeingsupportedbythegovernmentandtheOfficeoftheNationalAnti-Corruption Commission.

3.5ResponsibilitytowardsEnvironmentandResources

EGCOGroupendeavorstooptimizetheusageofnaturalresources,takingintoaccounttheimpactsontheenvironment.Inthis regard,EGCOhasmonitoredthesituationandsetthemeasurestoalleviatesuchimpacts.Inaddition,RayongandKhanom powerplantshaveimplementedISO14001:2004environmentmanagementsystemandtheTIS18001:1999&OHSAS18001:2007 OccupationalHealthandSafetymanagementsystem.EGCOGroupalsofactorsinthefollowingactivitiestoensurethatEGCO businesshastakenintoaccountthesocialandenvironmentissuesforsustainabledevelopment.

• Preparingtheinvestmentplanwithfueldiversificationaspartoftheagendatoreducetheriskofheavydependenceononly onetypeoffuel.Atpresent,EGCOistheIPPwiththemostvariousfueluseinThailand.

• Investinginrenewableprojectstoalleviateglobalwarminganddecreasethefossilfuelimport.

• Operatingbusinesswithenvironmentconcernandstrictadherencetorelevantlawsandregulationsincludingtheregulations oflocaladministrativeagencies.

• Supporting economic and social developmentwhile respecting the local tradition and culture. EGCOwill support the government policy and take a good care of communities surrounding the power plants so that they will not only be protectedfromthenegativeimpactofEGCObusiness,butwillalsohaveabetterqualityoflife.

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Themailingaddress isElectricityGeneratingPublicCompanyLimited,EGCOTower, 222Moo5,VibhavadiRangsitRoad, Tungsonghong,Laksi,Bangkok10210.

TheCorporateSecretarywillberesponsibleforforwardingcommunicationsdirectedtotheBoardtothestandingcommittee orrelatingdirectors.TheCorporateSecretarywillsummarizealldirectors’communicationsreceivedduringthemostrecentquarter totheBoard,exceptformailsaddressedtotheAuditCommitteewhichwouldbedirectlyforwardedtotheAuditCommitteewithout screening.Also,[email protected],ChairmanoftheAuditCommitteeandAudit Committeememberswouldopenthembythemselves.

3.7WhistleblowerSystemandWhistleblowerProtection

TheBoardhassetthechannelsforwhistleblowerprogramsatbothmanagementanddirectorlevels.Formanagementchannel, thereportonanysuspectedviolationorcrimeshallbemadetothesupervisorandtheGoodCorporateGovernanceCommittee.For theBoard’s channel, such report canbedirected to either theBoardor theAuditCommittee. It is the responsibility of the managementtocoachemployeestomeettheirresponsibilitiesundertherequirementsofrelevantlawsandregulations.Failure toobservetheCodeofConductwillresultinarangeofdisciplinaryactions.Theproceduretoprotectthewhistleblowerisalso putinplace.Forexample,informationwillbekeptconfidentialandwillbeknownonlyamongresponsibleparties.Thewhistleblowers canidentifythemselvesorcankeeptheiridentitiesanonymous.However,theymustprovideadequateinformationfortheCompany toinvestigatetheclaims.

In2011,EGCOwashonoredtheCSRAwardforlistedcompanywiththemarketcapitalizationover10,000millionbahtfromthe2011SETAwards.Inaddition,Groupcompaniesalsowonthefollowingawards.

• KEGCOwon“theNationalSafetyAwardsfor2009”forthe12consecutiveyearsand“OutstandingAchievementonLaborRelations andWelfare”for5consecutiveyears.

• RoiEtGreenCo.,Ltdwon“thenationalSafetyAward”forthesecondyear.

• EGCOMTaraCo.,Ltd.waspresentedtheCertificateforQualityofDrinkingWater for9consecutiveyears,Certificateaudit forEnvironmentManagementSystem:EMSStage IIbyMinistryof Industry,excellenthealthyworkplace for5consecutive yearsandtheCertificateforStandardforCorporateSocialResponsibility(CSR-DIWContinuous)B.E.2011.

Electronicmail Telephonenumbers

BoardofDirectors [email protected] -

AuditCommittee [email protected] -

CorporateSecretary [email protected] 029985021-5

CorporateCommunications [email protected] 029985131-3

InvestorRelations [email protected] 029985145-7

3.6ChanneltoDirectCorporateIssuestotheBoardofDirectorsandCorporateSecretary

Toincreasethecorporatevalue,thestakeholderscandirecttheirrecommendationsandconcernsoncorporateissuestoEGCO atthefollowingaddress.

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4. DisclosureandTransparency

4.1InformationDisclosure

BeingawareoftheimpactofEGCO’sinformationonthedecisionofinvestorsandstakeholders,theBoardsetapolicytodisclose materialinformationinatimelyandtransparentmannerinaccordancewiththerequirementsoftheSECandSETviathefollowing channels:

1. SET’sCommunityPortalsystemandSEC;

2. Publicchannelssuchasnewspapers,magazines,television,andcorporatenews;

3. Company’swebsiteatwww.egco.combothinThaiandEnglish;

4. Company’svisits;

5. Roadshowsforbothdomesticandoverseasinvestors;

6. Analystmeetings;and

7. EGCOnewsviapost

EGCOhasestablishedaDisclosureCommitteecomprisingPresident,SeniorExecutiveVicePresident-FinanceandCorporate Services, Senior Executive Vice President-BusinessDevelopment-Domestic, Senior Executive Vice President-Business Development-International,SeniorVicePresident-CorporateSecretary,SeniorVicePresident-CorporateCommunicationsand Vice-President-InvestorRelations.Themeetingsarecalledonquarterlybasisinordertosetcommunicationplan,reviewdisclosure policy,andpreparesignificantdisclosuretoensurethattheinformationiscorrectandefficientlycommunicated.

Investor Relations

InvestorRelationsisresponsibleforcommunicationwithinstitutionalandindividualinvestors,andanalystsonanequitablebasis. Inthisregard,annualInvestorrelationsplanisprepared.

EGCOputspriorityonsharinginformationviainvestorrelationsactivities.Seniormanagementalwaystakespartsinproviding informationtoinvestorsandanalyststocreateunderstandingontheCompany,promotetherelationship,andencouragethem toprovidethefeedbacktotheCompany.Significantactivitiesin2011includedmeetinginvestorsin2011ThailandFocus.Two tripswerearrangedforinvestors’andshareholders’visitstoKaengKhoi2PowerPlantinSaraburiProvince.EGCOalsohosted threetripsforanalystsandinstitutionalinvestorstovisitthe“onewatershedforest,onesourceofenergy”projectandtwobriefings andsitevisitsattheSolarPowerPlantinLopburi.Besides,therewerefouranalystmeetingsinThailand,threeoverseasroadshows toHongKongandSingapore.Ontopofthat,therewerenewslettersandelectronicmails.Forshareholderswhocouldnotjoin theinvestorrelationsactivities,EGCOhaspostedthepresentations,operatingresults,financialstatementsandnoticetotheSET ontheCompany’swebsites.

Corporate Communications

TheCorporateCommunicationsDivisionisresponsibleforcommunicatingthemovementoftheCompanytomediaforpublic disclosures.Majoreventsin2011included3pressconferencesoncorporateresultsanddirections,6mediatrips,12executive Interviewsand26piecesofpressreleases.

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Corporate Secretary

TheCorporateSecretarydisclosesinformationasrequiredbytheSETandSEConacorrectandtransparentbasis.In2011, 20notificationsweresubmittedtotheSET.

EGCOalwaysupdates the informationonEGCOwebsite.Quality of thedisclosurewasassessedafter everymeetingwith shareholders,investorsandanalystsforfutureimprovement.Inaddition,EGCOalsoattachedthefeedbackformforshareholders toprovidefeedbackonthequalityoftheannualreport,additionaldocumentrequired,andquestionsforthePresidenttoanswer inthenextAGMintheannualreportandthenoticetotheAGM.Suchfeedbackformwaswellreceivedbyshareholders.

4.2FinancialStatementPreparation

EGCOaimsatfosteringthestakeholders’confidencethatEGCO’sfinancialreportsareaccurate,completeandtransparentin linewiththegenerallyacceptedaccountingstandardstoprotectEGCOassetsagainstfraudorabnormalities.Inthisregard,the Boardhasentrusted theAuditCommittee toassumekeydutiesand responsibilitiesof reviewing the financial statements to ensureitscorrectnessandadequacyandcompliancewiththeaccountingstandardsandrelevantregulation.TheAuditCommittee setsthepolicytohaveanon-managementmeetingwiththeauditoratleastonceayeartoaskquestionsanddiscusswiththem aboutvarioussignificantissues.ApartfromdisclosingtheAuditorReportintheannualreport,theBoardalsopreparesthereport onBoardofDirectors’ResponsibilitiesonFinancialStatementswhichcoversimportanttopicsasprescribedintheSET’sBest PracticesforDirectorsofListedCompanies.In2011,EGCOappointedauditorsfromPricewaterhouseCoopersABASLimited astheCompany’sauditorgiventhattheyhadprofessionalknowledgeandhadnoconflictsofinteresttodefecttheirindependent judgment.ThiswasaimedatfosteringtheBoard’sandshareholders’trustthatEGCO’sfinancialstatementstrulyreflectedthe actualfinancialstatusandoperatingresult.

EGCOalsopreparesthereportonManagementDiscussionandAnalysistoprovideanalyticinformationontheCompany’sfinancial status,operatingresultsandmajorchangestoinvestorsandanalystsonaquarterlybasis.SuchreportissubmittedviaSET’s portalalongwiththeCompany’sfinancialstatements.

4.3InformationDisclosureonEGCOWebsite

InorderthatshareholdersandinvestorscanquicklysearchandretrieveEGCO’spublicinformation,EGCOpresentedthefollowing informationontheCompany’swebsite.

1. Corporateprofilecomprisingthedetailsofhistory,visionandmission,organizationstructure;

2. Corporategovernancecomprisingthedetailsofcorporategovernanceprinciple,boardofdirectors,boardcommittees,and seniormanagement;

3. InvestorRelationscomprisingthedetailsfinancialinformation,shareholderinformation,analystinformation,investorcalendar;

4. Corporateinformationcomprisingthedetailsofbrandinformationandpresscenter;and

5. CorporatesocialresponsibilitycomprisinginformationaboutEGCOsocialcontributionactivities.

InvestorscanvisitEGCOwebsiteatwww.egco.com

ItshouldbenotedthattheSEChasneverdemandedEGCOtore-statethefinancialstatements.Inaddition,thequarterlyandannualfinancialstatementsaredisclosedbeforethedeadline.

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5. ResponsibilitiesoftheBoard

5.1Board’sstructure

Structure and Composition

Currently,theBoardcomprisesnotlessthan5directorsandnotmorethan15directorsasstipulatedintheArticlesofAssociations. Thenumberofthedirectorswillbereviewedperiodically.Thechangeinnumberofdirectorsrequirestheshareholders’approval withthefour-fifthmajorityvotesofshareholderswhoattendthemeetingandhavetherightstovote.

AsatJanuary31,2011,theBoardcomprised15directors,14ofwhomwereoutsidedirectorswhichaccountedfor93%ofthe Board.Fromtheseoutsidedirectors,6werequalifiedasindependentdirectorswhichaccountedfor40%ofthetotaldirectors.

TheNominationandRemunerationCommitteeisentrustedtoselectandrecommendprospectivenominees,whethertheyare tobecometheshareholders’representativesor independentdirectors.TheNominationandRemunerationCommitteeisalso responsible forassessing theappropriatemixof skillsandcharacteristics requiredofBoardmembers in thecontextof the needsof theBoardatagivenpoint in timeandshallperiodicallyreviewandupdatethecriteriaasdeemednecessary.The Boardviews that theexistingstructureandcompositionof theBoardwhichcomprisesdirectorswith100% inmaleand the backgroundinengineering,economicsandfinance,andlawsandpoliticalscienceattheratioof40%,33.33%,and26.67% respectively,wasappropriatewithusefulmixofskillsandexperienceandanappropriatebalanceofpower.

4

5

6

Term and Age Limit

OnethirdofthedirectorsshallretirebyrotationattheAGMasprescribedinthePublicLimitedCompanyActB.E.2535.TheBoard viewsthatthereshouldnotbelimitonthenumberoftermsadirectormayserve.Termlimitsmaycausethelossofexperienceand expertiseimportanttotheoptimaloperationoftheBoard.However,toensurethattheBoardremainscomposedofhighfunctioning members able to keep the commitments toBoard service, theNomination andRemunerationCommitteewill evaluate the qualificationsandperformanceofeachincumbentdirectorbeforerecommendingthenominationofthatdirectorforanadditional term.Ontheotherhand,theagelimitpolicyisimposedthatdirectorcandidatescannotstandforelectionafterage72.Given suchagelimitontheelectiondate,directorswillbeabletoserveontheBoarduntiltheexpiryoftheirterms.

Chairman

TheBoardelectedMr.PornchaiRujiprapa,arepresentativedirectorofEGAT,astheChairmanbecauseofhisknowledgein energysectortogetherwithhisleadershiptoleadEGCOtoachievethecorporatevisionandmission.AlthoughtheChairmanis notanindependentdirector,theBoardremainsindependentandobjectiveduetothefollowingmechanisms:

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1. TheChairmanisanon-executivedirector,isnotthesamepersonasthePresidentandhasnorelationswiththemanagement. HisauthoritiesareseparatefromthoseofthePresident,andthereisacleardistinctionbetweensupervisorypolicy-making andday-to-daybusinessadministrativeroles.TheChairmantakestheroleoftheleaderandassuresthattheBoard’smeetings areefficientlyconductedbyencouraginginvolvementbyalldirectorsandprovidingrecommendationstoManagementvia thePresident.TheBoardwillnotintervenewithanyroutineactivitiesunderthePresident’sresponsibilities;

2. TheChairmanisnotanEGAT’semployeebutisentrustedbytheStatetobeonEGATBoardofDirectorstoprotectthenational benefits.TheBoardbelievesthattheChairmanwillactinthebestinterestofallshareholdersandstakeholders;

3. TheBoardismostlycomprisedofnon-executivedirectorsandtheBoard’sseatsareallocatedinaccordancewiththeshareholding intheCompanycomprising4EGATrepresentativedirectors,4TEPDIAGeneratingB.V.(TEPDIA)representativedirectors, and6independentdirectorswhichindicatesaproperbalanceofpower;

4. TheBoardhasappointedtheViceChairmanwhoisanindependentdirectortoworkwiththeChairmaninsettingandscrutinizing themeetingagendaandthetimeallocationforeachagendaitem;and

5. TheBoardhasassignedBoardcommitteestooverseetaskswheretheremaybeapotentialforconflictofinterestandto balancetheneedofeachstakeholder.Withrespecttothis,theAuditCommitteeisentrustedforoversightoftheintegrityof financialandnon-financialreportingandreviewandmanagementofrelatedpartytransaction.TheNominationandRemuneration CommitteeisassignedtotakecareofselectionofBoardmembersandkeyexecutivesandtheirremuneration.

Theresultof theBoard’sperformanceappraisal in2011 indicates that theChairman iseffective in leading themeetingand encouragingdirectorstoparticipateinthedebatearoundtheBoardtable.

Independent Director

TherearesixindependentdirectorsonBoardwhichislargerthanone/thirdofthewholeBoard.Independentdirectorssetupthe policytocallmeetingsasneeded.In2011,therewere2independentdirectormeetingstodiscussandexchangetheirviews regardingthecorporategovernanceandinterestingissueswithouttheManagementandtheresultwasreportedtotheBoard. (Pleaseseethedefinitionofindependentdirectorinthearticle“ShareholdingandManagementStructure”.)

Segregation of Duties

Thereisasegregationofdutiesbetweenpolicymaking,whichistheresponsibilityoftheBoardandroutinebusiness,whichis theresponsibilityof theManagement. In thisregard, theTableofAuthorityhasbeenpreparedandapprovedby theBoard. TheBoardwillnotintervenewithanyroutineactivitiesunderthePresident’sresponsibilities.

Policy and the Procedure for Other Positions of Directors and Management

ToensurethattheBoardwillbeabletodevotetimefortheefficientgovernanceofEGCO,theBoardagreesthatadirectorshould notservemorethan4companiesifbeingexecutivedirectorand6companiesifbeingnon-executivedirector.Currently,thereis notanydirectorwhoservesmorethan6companies.TheBoardhasalreadytakenintoaccounthismeetingattendanceasone ofthecriteriaforhisre-election.

Corporate Secretary

TheBoardhasappointedMs.BusakornKakanumpornwongas theCorporateSecretarywith theduty and responsibility as prescribesintheSecuritiesandExchangeAct(No.4)B.E.2551.Ms.BusakornalsoservesastheBoardsecretarytohandle functionstoassisttheBoardaswellastocoordinatesubsequentactionsundertheBoard’sresolution.

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• ToprovideprimaryadvicepertainingtoEGCO’sregulationsandArticlesofAssociations,andtomonitortoensureregulatory complianceonaregularbasis,andreportanysignificantchangestothedirectors;

• ToarrangemeetingsofshareholdersandtheBoardinaccordancewiththelawsandregulations,includingEGCO’sarticles ofassociationsandprocedures;

• TopreparemeetingminutesofshareholdersandtheBoardofDirectors,andtomonitortoensurecompliancewithresolutions ofshareholders’andBoardmeetings;

• ToensurethatcorporateinformationdisclosuretoregulatoryagenciesisinaccordancewiththelawsandtheSEC’sandSET’s regulations;

• ToinformgeneralshareholdersoftheirlegitimaterightsincludingEGCO’snews;

• TofacilitatetheBoardactivitiesincludingdirectororientation;and

• TofileandkeeprecordofEGCO’spapersuchasdirectors’registration,noticetothemeeting,minutesofmeetings,annual reports,notice toshareholders’meetings,shareholders’minutesofmeetingsandreportsondirectors’andmanagement’ interest.

In2011,theCorporateSecretaryattendedseminarsandprovidedopiniononthehearingshostedbythelistedcompanyregulators sothatinformationshouldbeusedtoenhancetheefficiencyofcorporategovernance.

5.2Board’sStandingCommittees

Withtheobjectivetoenhancethegovernanceefficiency,theBoardassignsdirectorswithknowledgeandexpertisetobethe membersoftheBoardcommitteesnamelyAuditCommittee,InvestmentCommittee,NominationandRemunerationCommittee, andGoodCorporateandSocialResponsibilityCommittee.

EachBoardcommitteehasitsowncharterwhichprescribesfunctions,composition,termofoffice,responsibilitiesandmeeting conduct.Thecommittee’scharter,whichisapprovedbytheBoard,willbereviewedasdeemedappropriate.Eachcommittee canretainoutsidecounsels,expertsandprofessionaladvisors,asdeemsappropriateatEGCO’sexpense.Thecommitteeswill reporttheirmeetingresultstotheBoard.

The Audit Committee comprises3 independentdirectors. TheAuditCommittee’smissioncovers the reviewof the financial statements,legalcompliance,riskmanagementpolicy,internalcontrolandappointmentofauditor.TheAuditCommitteealso reviewstheconnectedtransactionortransactionwithconflictsofinteresttoensurethatsuchtransactionisincompliantwiththe SET’srequirement,wellgroundedandwillbeforthebestinterestofEGCO.

The Nomination and Remuneration Committeecomprises4non-executivedirectors,twoofwhomareindependent.TheNomination andRemunerationCommitteemembersappointedMr.HideakiTomiku,arepresentativedirectorfromTEPDIAastheChairmanof theCommitteeashehasawealthofexperience inpolicy implementation,human resourcesmanagementandgovernance management.TheBoardtruststhatregardlessofwhomtheCommitteeChairmanisrepresented,theNominationandRemuneration Committeehastheappropriateprocessandmechanismstomandatetransparentprocedureof(1)recruitmentofdirectorsand Managementinlinewiththebestpracticestakingintoaccounttherecommendationsfromallshareholders;and(2)transparent andclearguidelinesforremuneratingdirectorsandManagementataratecomparabletothoseofthepeercompaniesandaligned withthelongtermbenefitofEGCOandtheshareholders.

The Investment Committeecomprises5directorsandhastheresponsibilitytoscreenandendorsefortheBoard’sconsideration theManagement’sproposalsespeciallyontheinvestments,fundingandrelatingactivities.Exceptionismadeformediumand

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smallsizedinvestmentwheretheInvestmentCommitteecanapprovebusinessdecisionwithsubsequentacknowledgementby theBoard.SincethisCommitteeisdelegatedtoapprovebusinessdecisionwithinitsdelegatedauthority,theChairmanofthe BoardisappointedtheChairmanoftheInvestmentCommittee.Hehasproventobeefficientchairmanwhoconductsthemeeting efficientlyandbeattentivetoothermembers’recommendationsbothattheBoard’sandthecommittee’smeeting.Itshouldbe notedthattheInvestmentCommitteewasestablishedin2010.

The Corporate Governance and Social Responsibility Committeecomprises5membersbeing three independentdirectors, oneshareholderrepresentativeandthePresident.TheChairmanoftheCommitteeshallbeindependentdirector.TheCorporate GovernanceandSocialResponsibilityCommitteehastheresponsibilitytoendorsethecorporategovernanceprincipleandthe positionsandpracticesonissuesofcorporatesocialresponsibilities,principallyinrelationtosocialandenvironmentalmatters thataffectshareholdersandotherkeystakeholders.

ThestructureanddutiesandresponsibilitiesofeachBoardcommitteeaswellasthenumberofmeetingsarereportedintheother articleon“ShareholdingandManagementStructure”.

5.3RoleandResponsibilityoftheBoardofDirectors

Duty and Responsibilities

TheBoardmemberswellunderstandtheirroleandresponsibilitiesincludingthebusinessoftheCompany.Theywellservethe CompanywithhonestyandprudentjudgmentsfortheutmostbenefitoftheCompanyandthefairnesstoallshareholders.The Boardhasexercised independent judgmentanddevoted time indischarging theirduties inaccordancewith theCorporate GovernancePrincipleasfollows:

• Tosetthecorporatevision,targetandbusinessstrategyincludingriskmanagementpolicy,annualbudgetandbusiness planaswellassettingthecorporateperformancetargetswhilemonitoringtheimplementation,theresult,significantinvestment cost,acquisitionanddisposaloftheassets;

• Torecruit,settheremunerationrate,monitortheperformanceandifnecessarytochangethekeymanagementandplanfor asmoothsuccessionplan;

• Toreviewtheremunerationofdirectorsandkeymanagementandensurethatthedirectorselectionprocessisprocedural andtransparent;

• TomonitorandresolvetheconflictsofinterestswhichmayincurbyManagement,directorsandshareholders,andtoensure theindependentauditandinternalcontrolwiththefocusonriskmonitoring,financialcontrolandlegalcompliance;

• Tomonitortheeffectivenessoftheexistinggovernancetoolsandinstrumentsandimplementchangeifnecessary;

• Tomonitortheinformationdisclosureandcommunications;and

• Todirectself-appraisalannuallyanddeclareintheannualreporthowwelltheycarryouttheirdutiesandoverseeEGCO.

Leadership and Vision

TheBoardworkswiththeManagementinsettingthevision,mission,strategies,goalsandbusinessplansbothoverashortand longterm.ThecorporateKPIsaredesignatedforeachkeyareabeinggrowth,financeandorganizationexcellence.TheBoardalso endeavorstoensurethatthesignificantworkingsystemsuchastheinternalcontrolandriskmanagementareinplace.Management performanceisalsomonitoredthroughthePresident’sreportwhichispreparedonamonthlybasistoensurethatEGCObusiness iscarriedoutinanefficientmanner.

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Code of Conduct

Tomaintainhighethicalstandards,EGCOhassetupaCodeofConductasaguidelinesothatdirectors,Managementand employeesperformtheirdutieswithregardtoethicalvalues.Directors’CodeofConductfocusesonbusinessethics,ethicsfor directors,directors’commitment,dutiesandresponsibilities,conflictsofinterestanduseofinformation.Employees’CodeofConduct wouldbeannuallyreviewed.Employees’CodeofConductcovers1.Guidingprinciples,2.Makingthesystemwork,3.Compliance withlawsandregulations,4.Businessethics,5.Humanresources,6.Safety,healthandenvironmentand7.Accountability.

EGCOcontinuouslyconductsthetrainingonadherencetotheCodeofConductfortheemployeesaswellasprovidesclarification ontheirfrequentlyaskedquestions.Directors,ManagementandemployeesmustobeyandrespectthespiritoftheCodeof Conduct.Managersatall levelsare required topromote thecompliancewith theCodeofConductandactas rolemodels. EmployeesatseniorvicepresidentlevelandupwardshallreviewtheircompliancewiththeCodeofConductbeforesigningand submittingtheCodeofConductComplianceStatementtotheirimmediatebossannually.

Internal Control and Internal Audit

Realizingtheimportanceofhavingsufficientandsuitableinternalcontrolatalllevels,EGCOclearlydeterminesresponsibilities andauthorityofManagementandemployeesinwriting,takingintoaccountsegregationofduties,checkandbalance,andcontrol ofCompany’sassets.EGCOalsosetacorrectandtimelyfinancialreportsystem.Apartfromthis,EGCOsetsupanInternalAudit DivisiontoauditEGCOandsubsidiariesandtoprovideconsultationtorelevantunitstoreducetheweaknessesinthesystemunder theproactiveauditplan.TheAuditCommitteedirectlyreportstotheAuditCommitteeinordertomakesureofitstransparent auditingprocess. TheAuditCommitteehasa responsibility to approve internal audit plan, and to consider and review the independenceandtheperformancereportoftheInternalAuditDivision.

EGCOemphasizesondevelopingthecapabilitiesofinternalauditorsbyselfdevelopment,experiencesharingandattending insideandoutsideseminar. In2011,VicePresident-InternalAuditwasreceived theCertificate InternalAuditor (CIA)andan AssistantVicePresident-InternalAuditwaswaitingfortakingtheexaminationtoreceiveCIA.

TheBoardsetsthepolicytoannuallyreviewEGCO’sinternalcontrolsystemusingthequestionnairesthatweredevelopedinline withtheguidelinesoftheSETandtheCommitteeofSponsoringOrganizationoftheTreadwayCommission(COSO).Employees fromsectionmanagersandupwardareassignedtoevaluatethequalityoftheinternalcontrolofwhichtheresultwillbeproposed toeachsubsidiary’sBoardofDirectors,theAuditCommitteeandEGCOBoardofDirectors,respectively.Theevaluationresult in2011showedthatEGCOanditssubsidiarieshadsufficientandappropriateinternalcontrolsystem.Detailsarepresentedin InternalControlinthisannualreportunderarticleInternalControl.Toensurecompliancewithinternalcontrolsystems,andrules andregulations,employeesofEGCOandsubsidiariesatseniorvicepresidentlevelandupwardarerequiredtothoroughlyreview their2011workpracticesbeforesigningtheGeneralRepresentationLettertotheirmanagersuptothePresident.ThePresident alsosignedtheGeneralRepresentationLetteraddressedtotheChairmanoftheBoard.

Risk Management

TheBoardofDirectorsentruststheAuditCommitteetoreviewwiththeManagementtheriskmanagementpolicy,implementation andguidelines.TheAuditCommitteereportstheupdateonriskmanagementissuestotheBoardtwiceayeartoconsiderthe adequacyandeffectivenessofriskmanagementsystemsothatthestrategies,planandmeasurescanbeadjustedorputin placeatanappropriatetiming.

Toimplemententerpriseriskmanagement,thefollowingmeasuresareimplemented:

• EGCORiskManagementCommitteeisshoredupcomprisingtopmanagementoftheGroupcompanieswiththePresidentas

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theChairmanoftheCommittee.TheobjectivesaretocloselymonitortheriskmanagementoftheGroupandtopresentthe resulttotheAuditCommitteeandtheBoard.Inaddition,RiskManagementCommitteeisalsosetupateachpowerplantto setupthepolicyandmonitortheimplementationtomeettheoverallpolicyandthebusinesscharacteristicofeachpower plant.

• RiskManagementSectionwasalsosetupunder InternalAuditDivision tobe fully responsibleandcoordinating for risk management.

• Riskmanagementprocessisembeddedintotheworkingprocess.Managementandemployeesareencouragedtotakepart intheprocessandtoefficientlyusetheresourcestoidentify,appraiseandmanagerisks.

• Riskmanagementisimplantedintothecorporateculture.

EGCOhasadoptedtheriskmanagementpolicyandriskmanagementmanualsasguidelinessince2001.RiskManagement implementationisalsoincludedasoneoftheelementsforinternalcontrolassessment.Theresultofsuchassessmentin2011 indicatedthatEGCOGrouphasappropriatelyimplementedriskmanagementsystem.

Conflicts of Interest

EGCOhassetthepolicyintheCodeofConductfordirectorsandemployeestoavoidtheconflictsbetweenthepersonalinterest andthecorporateinterestasfollows.

• Directorsandemployeesshallnotbeengagedasdirectorsoradvisorsofothercompanies,organizations,andassociations thatmayconflictwiththeinterestandthebusinessofEGCO.AcknowledgmentofsuchengagementbytheBoardmustbe sought;

• DirectorswillpromptlynotifytheBoardwhenanyoftheconflictofinterestoccursandmustconsiderwhethertorefrainfrom participatinginthedebateand/orvotingonthematter,whethertobeabsentfromdiscussionofthematter,whethertoarrange thattherelevantboardpapersarenotsent,or,inanextremecase,whethertoresignfromtheBoard;

• Thelistofmajorshareholdersisdisclosed.DirectorsanddesignatedManagementwillreportthechangeintheirsecurity holdingtotheregulatorybody.TheCorporateSecretaryisassignedtoreportthesecurityholdingsofdirectorsandManagement totheBoardateverymeeting;

• Employeesshouldnotborrowmoneyfromthecustomers/suppliersorfromindividualsorfirmshavingbusinessdealingsother thanfinancialinstitutionsasitmayinfluencethewaytheyhandleEGCObusiness;and

• Thestepforimplementingconnectedtransactionalongwiththeapprovalauthorityandthedisclosureofsuchtransaction shallbeasrequiredbytheSETandSEC.TheCorporateSecretarywillidentifythetypeoftransactionandtheapprovalbody andwillsubmitthereportsonconnectedtransactionsandanyconflictofintereststotheAuditCommitteeforacknowledgement anddisclosetheinformationintheannualreportandannualregistrationform(Form56-1).

DirectorsandmanagementarerequiredtopreparethereportontheinterestoftheirownandrelatedpartiestotheCompany toenabletheCorporateSecretarytoensuretransparentpractices.TheCorporateSecretarywillsubmitacopyofsuchreportto theChairmanandtheChairmanoftheAuditCommittee.

TofostertrustamongallconcernedpartiesthattheconnectiontransactionsareaimedatoptimizingthebenefitsofEGCOand theshareholders,theAuditCommitteeisassignedtoreviewtheinformationandprovidecommentwithregardtotheconnected transactionthatneedstobeapprovedbytheBoardandtheshareholdersandtoensurethatthedisclosureisadequate.

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Fraud Risk Management

Withaviewthatfraudriskwassignificant,theBoardsetameasuretomanagefraudriskasfollows:

• PreventiveMeasures:Theorganizationiswelldesignedforthepurposeofgoverningandmanagingbusiness.TheCodeof ConductispreparedinwritingandthecompliancewiththeCodeispromoted.Theinternalcontrolsystemisestablishedand appraised.Thewhistleblowerprogramisputinplace.

• Investigation:Eachsupervisorassumesresponsibilitytopreventandcontrolfraudrisksanderrorsinthesystem.Inaddition, thereisaninternalauditunitwhichisindependentfromseniormanagementtoreviewthecompliancewiththeregulations andtesttheearlywarningsignals.

• Fairness:Thefraudinvestigationwillbemadebyapaneltoensurefairnesstothedefenders.Inaddition,whistleblowers willbeappropriatelyprotected.

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

In2011,thereisnoclaimoranyfraudfoundinEGCOGroupduetotheaboveefficientpreventivemeasures.

5.4BoardMeeting

Toensure that theBoardtakes full responsibility tomeet theexpectationsof theshareholders, theBoardreviewssignificant businesspolicyandcorporatecalendar.Inthisregard,itisdeterminedthattheBoardmeetingwillbeheldatleastonceevery twomonths.ExtraMeetingcanbecalledifthereisanymajorunplannedeventthatneedstheBoard’sconsideration.TheBoard canalsoauthorizethecommitteestoscrutinizeorapprovethemanagement’sactivitieswithinthedelegatedauthorityduringthe meetinginterval.TheBoardalsoinstructedmanagementtoprovidemonthlyperformancereportsothattheBoardcanfollowup thebusinessprogressdespitenothavingtheBoardmeeting.

Tofacilitatethedirectors,EGCOplansthemeetingdatesandtheagendaforthewholeyearinadvance.TheChairmanandPresident fixtheagendafortheBoard’smeeting.EachdirectorcanproposetheagendatotheChairmanandcandelivertheirindependent judgment.TheCorporateSecretaryshallservewrittennoticecallingfortheBoardmeetingatleastoneweekinadvanceexcept fornecessaryorurgentcasetopreservetherightsorbenefitsoftheCompanywherethemeetingmaybecalledbyothermethods andanearliermeetingdatemaybechosen.Meetingdocumentaresenttothedirectors inadvancetoallowadequatetime fordigestingsuchinformation.Agendaisprioritizedintermsofsignificancei.e.,MatterArising,MatterforConsideration,Matter forInformationtoensurethatitemsthatneedthemostcarefuldeliberationaregivenadequatetime.

TheChairmanallocatesadequate time forManagement topresent their issuesand topermitdirectors toconductextensive discussionofagendaitemsandothertopicsofinterest.TheminutesofmeetingaredraftedfortheBoard’sreviewwithin14days after themeetingprior to theadoptionat thenextmeeting. TheBoardhadcalled7meetings in 2011.Eachmeeting took approximately2hoursandahalf.Theaverageattendanceratewas94.28%.

SinceEGCOhasanumberofdirectorswhodonotresideinThailand,EGCOhassetthepolicytoallowthosedirectorstoattend themeetingbyteleconferencesothatEGCOandtheBoardwillbenefitfromtheiropinionandrecommendations.Suchattendance isnotconsideredthemeetingquorumandthosewhoattendthemeetingbyteleconferencedonothavetherighttovote.

TheBoardencourages thePresident to invite topManagementbeing theseniorexecutive vicepresidents toattendall the Board’smeeting.OtherManagementsareinvitedtojointhemeetingasdeemednecessarytoprovideadditionalinsightsinto theitemsbeingdiscussedbecauseofpersonalinvolvementinthoseareas.Managerswithfuturepotentialaregivenexposureto

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theBoardtosupporttheconsiderationofthesuccessionplanning.TheBoardcanrequestforadditionalnecessaryinformation fromthePresidentortheCorporateSecretaryorotherassignedmanagementwithintheextentoftheestablishedpolicy.The BoardcanalsoengagedindependentadvisorforthebenefitsofthebusinessonEGCO’sexpenses.Detailsofdirectors’attendance in2011areillustratedinTable1.

TheBoardsetupapolicyfornonexecutivedirectorstocallameetingatleastonceayear.Therearetwomeetingsin2011.The agenda items cover board of directors’ meetings, risk management, structure, roles and responsibilities of directors and management,goodcorporategovernance,President’sperformanceappraisalandhumanresourcemanagement.

5.5BoardSelfAssessment

TheBoardregularlyconductsselfassessmentforfutureimprovement.In2011,theBoardagreedtousethe2009selfappraisal formbasedontheformsrecommendedbytheNewZealandInstituteofDirectorsandtheformsadoptedbyotherpeercompanies intheenergysector.Therearetwoparts,thecollectiveappraisalformandtheindividualappraisalform.Thegradingcodeis “excellent”forthescoreof85andabove,“verygood”forthescoreof75andabove,goodforthescoreof65andabove,“fair” forthescoreof50andaboveand“poor”forthescorebelow50.Theresultoftheappraisalisconcludedasfollows.

Collective Self appraisal

Thecollective self appraisal formcomprised14 sections, namely (1) shareholders, (2) stakeholders, (3) theCompany, (4) legal/ethicalduties,(5)monitoringperformanceandagendasetting,(6)size,compositionandindependenceoftheBoard,(7) directororientationanddevelopment,(8)Boardleadershipandteamwork,(9)thePresident,(10)Board(andCommittee)meetings, (11)individualBoardmembercontributions,(12)directorandBoardevaluationandcompensation,(13)managementevaluation, compensationandownershipand(14)successionPlanning.TheresultcanbeconcludedthattheBoardprotectedthebenefits ofshareholders,stakeholdersandEGCOandthatEGCOhadgoodcorporategovernance.Theaveragescorewas88%which wasintheexcellentlevel.Thehighlightswereasfollows:

• EGCO’sobjectivesreflectshareholders’expectationandfullandaccuratereportingonEGCOaffairhadbeenmade.The Boardunderstandswhothekeystakeholdersareandhavegoodrelationshipwiththem.

• Thestrategicplaniscarriedoutofsufficientqualityandcontentandiswellreflectedatoperationallevelwithkeyperformance indicators.

• TheBoardcommunicatesproperethicalandlegalresponsibilitiestoitsmembersandensuresethicalbehaviorandproper compliancestandardsthroughouttheorganization.TheBoardissufficientlyindependentoftheManagement.TheBoardhas leadershipandeffectivelymanagedtheconductofBoardbusinessasateam.

• NewdirectorsareprovidedwithadequateinformationabouttheCompanyandtheBoard.Directorreceivespropertraining incorporategovernance.

• TheBoardworkswellwiththePresidentandothermanagerstocreateanopenculturethatencouragesfrankdiscussion.The BoardavoidsexcessiveintrusioninthePresidentand/ormanagement’sresponsibility.

• TheBoardandcommitteemeetingareproductive.

• TheChairmancarriesouttherolesatisfactoryandencouragesdirectorparticipationinadebate.

• TheBoard regularly evaluates theperformance of thePresident and creates an appropriately designedmanagement compensationplan.

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• TheBoardhasacompanywidesuccessionplaninplace.

• TheBoardhasaworkingknowledgeofcompetitorsinthesectorandplaysaroleinpublicservice.

Despiteanexcellentscore,theBoardviewedthatplansshouldbemadetoensurethatthedirectordevelopment,succession planning,anddirectorandmanagementremunerationisperfect.

Individual Self Appraisal

The individual appraisal formcomprised 7 sections, namely strategic thought, goodcorporategovernance, competence, independence,preparednessasadirector,personalattributesandawarenessofstakeholders.Fromtheindividualselfappraisals, most of the scoreswerehigher than92%whichcouldbeconcluded that thedirectors hadappropriatedeliberations and contributionsinaccordancewiththerecommendedbestpractices.

Audit Committee Self Appraisal

ApartfromtheBoard,theAuditCommitteealsoappraisesthemselvesannually.Theresultoftheselfappraisalin2011indicated thatthecomposition,qualificationsandrolesandresponsibilitiesoftheAuditCommitteewerestillinlinewiththeAuditCommittee’s CharterB.E.2551andtheinternationalbestpractices.

5.6PerformanceAppraisalofPresidentandTopExecutives

Allthenon-executivedirectorswillappraisethePresidentperformanceagainstthecorporateandindividualachievement.Indicators includethefollowing:

• Qualitativeindicatorsbeingleadership,relationshipwiththeBoard,riskmanagementandinternalcontrol,humanresources management,goodcorporategovernanceandCodeofConduct.

• CorporateachievementsbasedonthecommittedKeyPerformanceIndicators.

• Capabilitiestoenhancebusinessdevelopment.

TheNominationandRemunerationCommitteeisresponsibleforendorsingtheperformanceappraisaloftheseniorexecutive vicepresidentsandexecutivevicepresidentsbasedontheindividualachievementofeachexecutive.

5.7RemunerationforDirectorsandManagement

EGCOsetthedirectors’remunerationattheappropriateratewhichiscomparabletothatoftheleadingcompaniesinthesame sector.Theremunerationcomprisesmonthlyretainerfee,meetingallowanceandbonuswhichispaidonceayearandistiedwith EGCO’sachievement.TheNominationandRemunerationCommitteeshallrecommendtheremunerationframeworktobeendorsed bytheBoardbeforeproposingtotheshareholders.EGCOhasapolicytodisclosetheremunerationofeachdirectorfortransparency. Directorsthatalsoserveascommitteememberswillbeentitledtoextraremunerationtomatchtheincreaseinresponsibilities. Managementwhoserveasdirectorsandcommitteemembersshallrefrainfromtakingdirectorremuneration.

Thenon-executivedirectorsshallsettheremunerationofthePresidenttakingintoaccounttheperformanceappraisalandthe peerpayment.TheBoardalsoapprovesthepaystructureoftheCompany.EGCOperiodicallyconductsthesurveyoftheexecutive remunerationtoensurethattherateiscomparabletothatofthepeercompaniesandadequatetoattractandmotivatethequalified executives.

Theremunerationofdirectorsandmanagementisdisclosedunderthetopicofshareholdingandmanagementstructureinthis annualreport.

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5.8BoardandManagementTraining

TheBoardpaysattentiontocontinuousdevelopmentofdirectorsandmanagement.In2011,Thefollowingdevelopmentplan wasimplementedtoensureefficiencyandeffectiveness.

Director Development

Continueddevelopmentisencouragedforalldirectors:

New Directors :Directors’orientationisarrangedwheredirectorswillhaveachancetomeetingwithManagement.Directors’ manualisupdatedtoequipincomingdirectorswithknowledgeaboutEGCO.Directorsarealsoencouragedtoattendtraining programsattheInstituteofThaiDirectors(IOD).

Existing Directors :TheBoardencouragescontinueddevelopmentcoveringin-housetrainingandoutsidetrainingattheIODor otherrelatingacademicinstitutes.In2011,EGCO’sin-housetrainingprogramsfordirectorswereriskmanagementandfraud riskmanagement,andnewaccountingprinciplesand theCompany’sgovernance.Theseminaronanoverviewof industry, businesscharacteristicsoftheGroupcompanies,currentandfutureplanswerealsoprovidedtotheBoard.EGCOalsoarranged aBoardvisittoSolarPowerPlantProjectinLopburi,andsitevisitstooverseaspowerplantstoeducateourdirectorsonpower businessandfuturetrend.

CompanydirectorsarewelleducatedabouttheCompany’sbusinessandtheirresponsibilitiesasadirector.Thelistofdirectors whoattendedthecoursesatIODandoutsideinstitutesasofDecember2011isshowninTable2.

Management Development and Succession Plan

EGCOsupportstheexecutivedevelopmentprogramtoenhanceManagementcapacitiesandskillstobesuitabletoperformtheir dutiesandtoassignthesuitableandchallengingjob.

TheBoarddeterminespoliciesandprinciplesforselectionofthePresidentandhissuccessorintheeventofanemergencyorthe retirementof thePresident taking intoaccounteducationalbackground,experience,capabilities,ethicsandleadership.The selectionprocessisfairandtransparent.TheNominationandRemunerationCommitteeshallconsiderandproposethequalified candidatestotheBoard.

ThePresidentisentrustedtoselecttheknowledgeable,competentandexperiencedexecutivesinaccordancewiththequalifications endorsedbytheNominationandRemunerationCommittee.TheapprovalofthecandidatesshallbeasstatedintheCompany’s RegulationonHumanResourceManagementB.E.2550andtheresolutionoftheBoardasfollows:

• TheNominationandRemunerationCommitteeshallapprovetheappointmentofSeniorExecutiveVicePresident,Executive VicePresident,andnominateseniorexecutivesofsubsidiary/jointventurecompaniesthatEGCOhastherighttonominate forapositionequivalenttoEGCO’sEVPlevelandupward.

• ThePresidentshallappointthedivisionandsectionmanagers.

• TheappointmentofCorporateSecretaryshallbebytheBoardwhiletheappointmentofDivisionManagerofInternalAudit shallbeendorsedbytheAuditCommittee.

TheNominationandRemunerationCommitteehasassignedtheManagementtopreparethesuccessionplanfor17keypositions alongwiththeexecutivedevelopmentplantoensurethatqualifiedemployeeswouldbeselectedundertheD-R-I-V-Epeople attributesasfollows:

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DedicationtoExcellence ResultOrientation

InitiativesandDynamic ValueDifferencesandWorkasTeam

Environment,SocialandSafetyConcern

TheManagementdevelopmentplanispreparedtofocusondevelopmentofcore,managerial/leadershipcompetenciesandfunctionalcompetencies.Keycoursesandnumbersoftraineesforeachcourseareasshownbelow:

Courses No.ofparticipants

DirectorCertificationProgram 2

ExecutiveDevelopmentbyThaiListedCompaniesAssociation 2

ManagementofPublicEconomicforExecutivesatKingPrajadhipok’sInstitute 1

Table1:MeetingAttendance

No. Name BoardMeeting Audit Investment Nominationand GoodCorporate 7times/year Committee Committee Remuneration Governanceand 17times/year 11times/year Committee CorporateSocial 10times/year Responsibility Committee 2time/year

1 Mr.PornchaiRujiprapa 7/7 11/11 Chairman

2 Mr.AswinKongsiri 7/7 10/10 2/2 ViceChairman IndependentDirector

3 Mr.ChaipatSahasakul 7/7 17/17 IndependentDirector

4 Mr.ThanapichMulapruek 6/7 17/17 IndependentDirector

5 Mr.SomphotKanchanaporn 7/7 17/17 IndependentDirector

6 PoliceLieutenantGeneralPijarnJittirat 7/7 10/10 2/2 IndependentDirector

7 Mr.PhaiboonSiripanoosatien 7/7 9/10 2/2 IndependentDirector

8 Mr.SomboonArayaskul1 5/5 7/8 1/2 Director

9 Mr.WisudhiSrisuphan2 1/1 Director

10 Mr.KurujitNakornthap3 5/5 0/0 Director

Meeting(time)

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No. Name BoardMeeting Audit Investment Nominationand GoodCorporate 7times/year Committee Committee Remuneration Governanceand 17times/year 11times/year Committee CorporateSocial 10times/year Responsibility Committee 2time/year

11 Mr.SurasakSupavititpatana4 2/2 1/1 Director

12 Mr.KulitSombatsiri5 1/1 0/0 Director

13 Mr.PeterAlbertLittlewood6 0/1 Director

14 Mr.HideakiTomiku 6/7 10/11 7/7 Director

15 Mr.ShinjiTsuchiya6 1/1 Director

16 Mr.MarkJobling6 1/1 1/2 3/3 Director

17 Mr.ToshiroKudama7 6/6 Director

18 Mr.AkioMatsuzaki8 4/6 Director

19 Mr.RyotaSakakibara7 6/6 8/9 Director

20 Mr.VinitTangnoi9 7/7 8/8 2/2 2/2 DirectorandPresident

21 Mr.SahustPratuknukul 7/7 3/3 8/8 0/0 President

Meeting(time)

1ResignedonOctober1,2011 2ResignedonFebruary28,20113BeingappointedasdirectoronFebruary28,2011andresignedonDecember1,20114BeingappointedasdirectoronOctober25,20115BeingappointedasdirectoronDecember13,20116ResignedonFebruary23,2011 7BeingappointedasdirectoronFebruary28,20118BeingappointedasdirectoronFebruary28,2011andresignedonJanuary29,20129ResignedduetotheendofcontractonSeptember30,2011

Note : 3membersinAuditCommitteecomprisingno.3,4,5

8membersinInvestmentCommitteecomprisingno.1,8,11,14,16,19,20,21

8membersinNominationandRemunerationCommitteecomprisingno.2,6,7,14,16,20,21

8membersinCorporateSocialResponsibilityCommitteecomprisingno.2,6,7,8,10,12,20,21

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Table2:ListofdirectorswhoattendedthecoursesatIODandoutsideinstitutes

Chairman

Directors’

Successful

Audit

Financial

Accounting

Director

TheRole

IFRS

Audit

Monitoring

MonitoringMonitoringTheBoard’sMonitoring

Riskitall

2000/TheCertificationFormulationCommitteeInstrument

fornon-

Accreditation

ofthe

CommitteetheSystemFraudRisktheQualityRoleonFraudtheInternal

Roleof

Programand Execution

Programfor Directorsaccounting

ProgramCompensation

and

ofInternalManagementofFinancialPresentation

Audit

Chairman

ofStrategy

Audit

(DAP)

Committee

Continuing

Control

Reporting

and

Function

Program

Committee

Program

DevelopmentandRisk

Detection

ProgramManagement

1.Mr.PornchaiRujiprapa

C

hairm

an

2.Mr.AswinKongsiri

√√

ViceChairm

an

Independent Director

3.Mr.ChaipatSahasakul

√√

√√

√√

IndependentDirector

4.Mr.ThanapichMulapruek

√√

IndependentDirector

5.Mr.SomphotKanchanaporn

√√

√√

√√

√√

IndependentDirector

6.PoliceLieutenantGeneral

PijarnJittirat

IndependentDirector

7.Mr.PhaiboonSiripanoosatien

IndependentDirector

8.Mr.SurasakSupavititpatana

Director

9.Mr.KulitSom

batsiri

Director

10.M

r. VinitTangnoi

Director

11. M

r.HideakiTom

iku

Director

12. M

r.ToshiroKudam

a

Director

13. M

r.AkioMatsuzaki

Directo

14.M

r. RyotaSakakibara

Director

15.M

r. SahustPratuknukul

DirectorandPresident

Cour

ses

Dire

ctor

s

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Employees

Fullyawarethatourpeoplearethe road that leads to the success and sustainabilityofeconomic,socialandenvironmentaloperations, theEGCOGroupemphasizescreating relationshipsbetweenemployeesandtheorganizationthroughitsoperationscompatiblewithitspolicyandresponsivetoemployees’sneeds.Themanagementisdividedintothreemainaspects:

1. Fundamental Management, covering two areas of operation :

1.1 Specification of compensation and benefits

TheEGCOGroupsetsitscompensationsystemaccordingtotherank,responsibility andcompetenceofemployeesaswellasprovidesbenefitsandwelfaretoemployees andtheirfamiliesbasedmainlyonnecessityandtheirreasonableneedsaccording toappropriateprinciples.Theannualincreaseinthewagesofemployeesatevery levelisconsideredaccordingtothesetwomajorcomponents:

• Successoftheorganization:takingintoaccounttheaveragerateofwageincreases of businesses within the industry, the economic conditions each year, and considerationofthemanagementdivision.

• Operatingresultsandperseveranceofemployees

Allinall,thestandardsusedtosetthewageincreasearetopromotethefairness ofwageincreasesamongemployeesinordertokeepcompetentandgoodemployees withtheorganization.Moreover,theEGCOGroupconstantlystudies,analysesand comparescompensationandbenefitswith thoseofotherbusinesses in thesame industrytoassurethatemployeesreceivepropercompensation,benefits,andwelfareat acompetitivelevelinthemarket.Thewelfarecommitteehasbeensetupcomprising employeeswhoareinterestedandreadytomonitor,followupandprovidecomments and suggestions to enhance the efficiency ofwelfaremanagement enabling the companytorespondtotheneedsandsatisfactionofemployeesateverylevel.This isonewaytopromotegoodlabourrelationsbetweenemployeesandthecompany.

1.2 Training and development

TheEGCOGroup iswell aware of the importance of thedevelopment of skills, competence and potential of personnel which helps strengthen the efficiency andeffectivenessofthecurrentoperationsandcreatestheopportunitytoprogress alongfuturecareerpaths.Thecompany,therefore,allocatedbudgetandtimefor itsemployeestocontinuallytrainanddevelopin2011.Thepeopledevelopmentplan of the EGCO Group places emphasis on the development of the organization’s desirable competency including core competency, managerial competency and functionalcompetency.Thisgoesparalleledwith theapplicationof the individual developmentplanandjobrotationinaccordancewiththefiveyeardevelopmentplan

AccountabilityforStakeholders

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(DevelopmentRoadMapModel) to enhance theworkcompetenceof eachemployeeconsistentwith thedirectionand operatingplanoftheorganizationandtoprepareforanychangesintheexternalenvironment.

In2011,thehumanresourcedivisionoftheEGCOGrouphasdevelopedemployeesthroughavarietyofprojectsandcourses suchasself-learning,trainingconductedbyexperts,fieldtrips,sharingandlearningamongemployees,andpractice.

2. Relationship Management

TheEGCOGrouprealizesthesignificanceofindividualityinadditiontoafocusonteamwork.Therefore,thevalueandcultureof theorganizationarepromotedamongemployeestogenerateacceptanceandrespecttowardsindividualdifferences.Thiscan leadtocoordinationandworkcollaborationthroughthecorecompetencyoftheEGCOGroupcalledDRIVE.

Figure:PeopleDevelopmentPlan2011

Figure:EmployeesDevelopmentRoadMap

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The EGCOGroup believes that good relationships are one factor stimulating employees to work happily.When employees are happy working and have competence suitable to the job as continually trained and developed, they will produce efficientwork. In themeantime, the operation of the organizationwill eventuallysucceed.

In 2011, the EGCOGroup organized the following activities to create and encouragebetterrelationsamongemployees:

• CommunicationDay:aquarterlysemi-formalgatheringinwhichtheexecutive officers and employees meet to share information, news and trends, both insideandoutsidetheorganization,andemployeesaregivenanopportunity topresent,exchangeideasaswellasasktheexecutivesquestions.

• Employee Visit: the President visits the employees in the EGCOGroup to explain the direction of operations, talk, answer questions and have lunch withemployees.In2011,thisactivitywasorganizedtwicewiththecommittee

andtheexecutivesmeetingwithemployeesfromRayongPowerPlantandKhanomPowerPlant.

• EGCOGroupKnowledgeSharing:anactivityinwhichtheexecutivesoremployeessharetheirknowledge,experienceand expertisetotheemployeesintheEGCOGroup.Theactivityalsoallowsemployeesateveryleveltoexchangeknowledge. Thisactivitywasorganizedoncein2011.

• EGCOGroupSportsDay:anannualactivitytopromoterelationsamongemployeesthroughsportactivities.Eachcompany under theGroup takes turns tobeahostso thatemployeeshave theopportunity to learnabout theoperationsofother companies andpowerplants in theEGCOGroup. In 2011RayongPowerPlantwas thehost organizing this activity in Rayong.

Inadditiontotheseactivities,eachcompanyorganizesanumberofeventstopromoteinternalrelationssuchasNewYear’s parties,retirementparties,andreligiousandculturalactivities.Thecompaniesalsosupportactivitiesorganizedbyemployees’ clubssuchasthephotoclub,Buddhismclub,andgolfclub.Inthemeantime,theEGCOGroupsharesinformation,newsand itsactivities throughvariouschannelssuchas in-housemagazines,E-newsletter,publicannouncementboard,phone lines, mobile telephones with the objective to receive and send information between the companies and employees and to encourageemployeestoparticipateinactivitiesthatthecompanygrouporganizes.

3. Management in Participation and Social Creation

TheEGCOGroupstronglybelievesthatpromotingemployeestotakepartinactivitiesorganizedbytheorganizationandsociety isonewaytodevelop“competency”andraiseawarenessinthe“value”ofoneself.

Apartfromassigningemployeestoworkwithacommunityineachareatoinitiateandoverseeausefulactivitytoenhancethe qualityoflifeandtopreservetheenvironmentofacommunity,theEGCOGroupprovidesitsemployeeswiththeopportunityto become“volunteeremployees”todevelopsocietythroughapreservationofthewatershedforestactivityandtopromotelearning andpublic-mindednessamongyoungpeople.Thisiscarriedoutwiththeobjectivetopromotecollaborationbetweenemployees fromtheEGCOGroup,thepublicandprivatesectors,andcommunities.

In2011,employeesfromtheEGCOGrouphadthechancetocontinueover20projectsforcommunitiesandsocietyoverseenby theorganizationandtookpartinfloodvictimreliefinNakhonSriThammaratandSuratThaniaswellastheearthquakeandtsunami inJapanandthedevastatingfloodsinThailandattheendof2011.

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ShareholdersandInvestors

Realizingitsobligationstoshareholders,theEGCOGroupstipulatedpolicyinitscodeofconductstatingthattheEGCOGroupiscommittedtobuildinggrowthwithgenuinecompetencyorcapabilitysothattheshareholdersgainsustainablereturnsderivedfromtheefficientoperationsandsolidoperatingresultsoftheCompany.TheEGCOGrouprespectstherightoftheshareholderstoreceivethenecessaryinformationforfairassessmentoftheCompany.TheCompanyalsodisclosesoperatingresults,financialstatusaswellasaccuratesupportingdetailsasstipulatedbytheStockExchangeofThailand(SET)andtheSecuritiesandExchangeCommission(SEC).

Stock Price

Theaveragestockpricein2011was93.21bahtperstock,anincreaseof7.73%from2010.Thehighestclosingpricewas112.00bahton19January2011,thelowestclosingpriceat80.00bahton26October2011,andthePrice-Earningsratio(P/Eratio)on30December2011was10.5.

Dividend Payment

ThedividendpaymentpolicyoftheEGCOGroupspecifiesthatshareholdersreceivedividendtwiceayearattherateof40%ofthenetprofitsofthetotalfinancialstatementsafterincometaxisdeductedorattheamountthatgraduallyandregularlyincreaseswithoutnecessarycausesuchasthefuturebusinessexpansionoftheCompanyintheformofprojects,ordividendpaymentsubstantiallyaffectingthenormaloperationsoftheCompanywherebydividendpaidshallnotexceedtheaccruedprofitsofseparatefinancialstatements.

Figure:TheStatisticsofPreviousDividendPaymentoftheCompany

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Interim Final

2.25

1.00 1.25 1.25 1.50 1.50 2.00 2.25 2.50 2.50 2.501.25

1.25 1.50 1.50 1.75

2.00

2.50 2.50 2.75 2.75

2.50

2.50 2.502.75 3.00

3.25

4.00

4.75 5.005.25 5.25Baht/Share

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Management of relations with shareholders and investors

WithintheEGCOGrouptheInvestorRelationsSectionisresponsibleforgivingaccurate,complete,sufficientandpromptinformationtoshareholders,investors,andanalystsalike.Theshareholdersandinvestorscanalsosharetheircommentsandcontacttheunitdirectlyasregardsanyenquiriesat029985145-8orir@egco.com.Furthermore,theEGCOGrouphassetupanannualplantocreatecommunicationchannelsandactivitiesforshareholders,investorsandtheCompany’schiefexecutivesofficersasdescribedbelow:

• AnalystMeeting

TheEGCOGrouporganizesatalkforinvestorsandanalyststoreportquarterlyoperatingresultsinwhichthepresidentandthe vicepresidentaswellasCEOsalwaysparticipateinsharinginformationandansweringquestions.

• PowerPlantVisitProject

TheEGCOGrouporganizesaprojectwhereshareholdersandinvestorspayvisitstothepowerplantsoftheEGCOGroupto createunderstandingaboutthebusinessoperationsoftheCompany.TheyalsogettomeettheseniormanagementoftheCompany annually.ThisprojectisopenforshareholderstosignupforattendanceattheAnnualGeneralMeetingorapplyviatheEGCO websitetwoweeksbeforethemeeting.In2011,theshareholderspaidavisittoKangKoiPowerPlantinSaraburiandtheinvestors visitedLopburiSolarPowerPlantandweregiveninformationandknowledgeabouttheplant.

• One-on-OneMeeting

TheEGCOGrouporganizestheone-on-onemeetingforinvestorsandanalystswhichtheCompany’sseniormanagementandthe InvestorRelationsSectionregularlyattendasrequestedby investorsandanalysts. Ifeitherpartycannotattendthemeeting inperson,aconferencecallcanbeorganizedtosuiteveryparty’sconvenience.

• MeetingwithinvestorsoutsidetheCompany(Roadshow)

In2011,theEGCOGroupmetwithminor investorsandinstitutional investors,bothnationalandinternational,andworkedin collaborationwith theStockExchangeofThailand,TISCOSecuritiesPublicCompanyLimited,J.P.MorganSecuritiesPublic CompanyLimited,andPhatraSecuritiesPublicCompanyLimited.Moreover, theCompanyorganized tripsabroadsuchas HongKongandSingaporetoshareinformationwithinstitutionalinvestors.

• Newsletter

TheEGCOGrouphasimproveditsnewslettercalled“Life”,communicatingtotheshareholders,reportingnews,operatingresults, activitiesconductedbytheCompany,acalendarshowingtheactivityplanofEGCO,andfurtherknowledge.Moreover,anew channeltoobtainnewsisthroughe-mailalertsontheCompany’swebsite.

Customers

TheEGCOGroupisproudofitsrole,dutiesandresponsibilitiesasa“Power producer and distributor”totheElectricityGeneratingAuthorityofThailand(EGAT)andclientsfromtheindustrialestate,andasa“Service provider in energy”intermsofmachineoperation,maintenance,engineering,construction,andprovidingtrainingtopowerplantsandindustrialplants,bothdomesticallyandinternationally.Inaddition,theEGCOGroupundertakestheresponsibilityas“Water producer and distributor”toProvincialWaterworksAuthority(PWA)adheringtothebrandvalueofReliable,Dynamic,andHelpfulindeliveringqualityproductsandservicesatreasonableprice,whilefurtheringgoodrelations.

In2011,theEGCOGroupcontinuedtogenerateanddistributequalityelectricityaccordingtoelectricalstandardsatthequantityandtimeconditionspecifiedbyEGATandclientsfromtheindustrialestatewiththeobjectiveofprovidingitsclientswithsufficient

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Inrelationtoenergyservice,theEGCOGroupisabletomaintainitsserviceatthehighlysatisfactorylevel.Accordingtoasatisfactionsurveyconductedwithclientsinthemaintenancebusiness,93.02%weresatisfiedwiththeemployeesprovidingserviceandtheoperatingresults.

As regards thewatermanufacturinganddistributingbusiness, theEGCOGroupplacesemphasison “quantity”and“quality” insupplyingwatermainlytotheProvincialWaterworksAuthority(PWA)ofRatchaburiandSamutSongkhram.In2011,theEGCOGroupwasabletosupplywaterinaccordancetothedemandsofcustomersatanaverageof36,000cubicmetersaday,higherthantheminimumamountof34,000cubicmetersadayasagreedinthecontract.Inaddition,theEGCOGroupproducedwaterovertheproductionstandardssetbytheThaiIndustrialStandardsInstitute.AfterthesurveyconductedbytheDepartmentofHealth,MinistryofPublicHealthfrom2002to2011,thewaterproducedbyEGCOMTARAwascertified“Drinkingtapwater”.Onemorebuying-sellingwaterstationforPWAhasbeensetup-BangKhonthiWaterSupplyStationtosupportthewatersupplyofPWAintouristareassuchasAmphawaFloatingMarket,BangNoiFloatingMarket,BangNokKwakFloatingMarketandotherplacesinAmphoeBangKhonthi.

TradingPartnersandCompetitors

TheEGCOGroup,realizingthesignificanceof“Tradingpartners”aspartofabusinessalliancethattakespartinpromotingsustainabledevelopment,treatsthemwithfairnessandequalitytakingintoaccountourmutualinterests.Furthermore,theEGCOGroupcreatestheopportunity toexchangeknowledge,experience,andexpertiseamongtheEGCOGroupand its tradingpartners,aswellasconsistentlyparticipateinandsupportthecreativeactivitiesofitstradingpartnersinordertobuildtrustandfurthergoodrelations.

TheEGCOGroupconductsitselfinamannerappropriatetofaircompetition,nottakingadvantageofitscompetitorsbyusingmethodsnotincompliancewiththelaw,andexpressingideasbeneficialtotheregulationsandacceptedstandardsofpractice.TheCompanywillnotseekinformationaboutitstradingpartnersandcompetitorsinadishonestmannernorslanderthereputationofitstradingpartnersandcompetitors.In2011,theCompanydidnothaveanydisputeswithitstradingpartnersandtradingcompetitors.

Environment

TheEGCOGroup strongly believes that environmentalmanagement is the obligation of the organization requiring systematicdevelopment.Therefore,astrategicprojectregardingenvironmentalmanagementhasbeenestablishedalongsidethesafetyandoccupationalhealthsystem.TheSafety,HealthandEnvironment(SHE)Committeehasbeensetuptoactinconsideringthedirection,principlesandworkplaninrelationtothesafety,occupationalhealthandenvironmentoftheEGCOGroupincompliancewithitspolicy,objectiveandstrategicplans.Follow-up,evaluationanddevelopmentaresystematicallyconductedinordertoachievetheefficientandeffectiveoperationofpowerplantsoftheEGCOGroupfollowingthesamedirection.

PowerPlant

AvailabilityPayment2011(percent)

Annualtarget Achieved

RayongPowerPlant 91.55 93.09

KhanomPowerPlant 90.22 95.28

RoiEtGreenPowerPlant 84.82 86.00

EGCOCogen 95.82 98.12

electricitytoservethepeopleandforuseintheirdailyoperationswiththeavailabilitypaymenthigherthanthespecifiedcriteriastatedinthePowerPurchaseAgreementandhigherthantheannualtarget.

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In2011,theEGCOGrouphasadoptedthepolicyandpracticeguidelinesregardingGreenProcurementproposedbytheworkinggroupoftheGreenProcurementProject.Duringthefirstyearofoperation,productsentitledtousethegreenlabelfromtheThaiGreenLabelSchemepublicizedontheThailandEnvironmentInstitutewebsite,andcomputerproductscertifiedwithinternationaleco-labelingconstitutedtheprimaryfocus.TheEGCOGrouphasoperatedGreenProcurementproject,conducteditselfincompliancewiththestandardsstipulatedbythegovernmentsector,andconstantlycheckedthequalityofair,waterandnoiseofthepowerplantsunderitsresponsibilityinordertobeanactiveparticipantinrelievingenvironmentalpollution,aseriousproblemintheworldrightnow.

CommunityandSociety

TheEGCOGrouphasthevisionthattheorganizationwilloperateitsbusinessalongsidethepreservationoftheenvironmentanddevelopmentofsocietyasunderscoredbytheCompany’smission-“EnergyCreator…ForLife”.

Fornearlytwodecades,theEGCOGrouphascollaboratedwithcommunitiesandsocietyininitiatingandconductingactivitiesalongthreemainpathstooperateinharmonyalongsidethecommunity,societyandenvironment.Theseinclude:

1. Promotion and Development of “Quality of Community Life”

Withparticularattentionbeinggiventothecommunityintheareasaroundtheheadquartersandpowerplants,theEGCOGroup workswithcommunities topreserve theenvironmentanddevelopprojectscovering theareasofeducationprofession,and sanitationforthegoodqualityoflifeofpeopleinthecommunities.

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

Realizingthesignificanceoftheconservationofawatershedforestasitisasourceoforiginandrenewalofnaturalwater,anorigin ofriversandstreams,andanessentialfactorinlivinglife,theEGCOGrouphasworkedincollaborationwithDoiInthanonNational Parktodevelopandoperateprojectsaimingtoconservewatershedforestinthenorthforover15years.Themajorprojectsthat havecontinueduntilthepresentareForest:TheCircleofLife,andAWatershedForest:ASourceofEnergyforLife.TheEGCO GroupalsocontinuallysupportstheoperationsoftheThaiForestConservationFoundation.

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3. Promotion of Path of Learning and Creation of Public-mindedness among ‘Youth’…the Beginning of the Sustainable Development of Society

Believingthatlearningandexperienceoutsidetheclassroomiskeyindevelopingchildrenandyouth,amajorforceofthecountry’s future development, the EGCO Group brainstorms and collaborates with children, youths, teachers, and experts in child developmentandtheenvironmentinproducinginstructionalmediaandimprovingactivitiesforchildrenandyouthsfromprimary andsecondarytouniversitylevelsofeducation.TheprojectsthathavebeenoperateduntilpresentareEGCOForestConservation YouthCampinassociationwithDoiInthanonNationalPark,andHowtoFightGlobalWarmingwithSustainableLivingincollaboration withtheThailandEnvironmentInstitute.

Inaddition,theCompanyprovidessubsidiesandsuggestionstolocalpublic-mindedyouthgroupstoformthe‘EGCOGreen BloodYouthNetwork’inthecentralandnorthernregionsforenvironmentaloperationandpublicinterest.Thisprojectandactivity areentirelyinitiatedandcarriedoutbythenetwork.

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Massmedia

TheEGCOGroupcontinuallyplacesemphasis on reporting the information, news, andprogressof theoperating results of theorganizationbyworkingincollaborationwiththemassmediaindisclosinginformationandnewspertainingtotheEGCOGroupinamannerfavorabletothestakeholderthatisafair,appropriateandtimely.Moreover,avarietyofactivitiestopromoterelationsandparticipationareorganizedthroughdifferentcommunicationchannels.

In 2011, theEGCOGroup organized threepress conference to report the operating results of business and activities of theorganization,sixmediatripstoseetheworkandactivitiesoftheorganization,12interviewsandmeetingsforopinionexchangewithexecutives,26 itemsofnewsandarticlesregardingthedisseminationof thenews, informationandactivitiesof theorganization.Inaddition,theCompanyhassuccessivelysupportedandtakenpartincreatingsocialprojectsandactivitiesinitiatedandoperatedbythemediathroughouttheyear.

Occurrences Helpprovisions

FloodinginthesouthofThailand •Providingover6,000reliefpackagesand2,700litersofdrinkingwatertovictimsinAmphoe KhanomandotherdistrictsinNakhonSriThammaratandSuratThani.

•Donating1millionbahtthroughtheTVprogram“People,GovernmentforFloodRelief”on ModernineTV.

EarthquakeandTsunamiinJapan •SupportingEGATtoshutdown2electricitygenerators,supplying122megawattseach,in NongJokPowerPlanttoalleviateelectricalpowercrisis.ThisresultedinJapanbeingableto generateelectricityto240,000households.

•Donating1millionbahtthroughtheEmbassyofJapaninThailand.

•Donatinga500,000bahtsubsidytoRyuichiKawamuraExclusiveOneNightCharityConcertin Bangkok.Partialincomewenttothevictims.

Floodingin63provincesinThailand •Donating2millionbahtthroughGovernmentHouse.

•Donating500,000bahtand200protectivecoversthroughtheMinistryofEnergy.

•Donating1millionbahtthroughtheMinistryofScienceandTechnology.

•Donating1millionbahttothe“Chula-SongkrohFund”inthe“InMemoryofKingRamaVtheGreat 2011”program,partiallygiventovictims.

•Providing2,000reliefpackagesforvictimsinLopburi.

•Donatingatankfilledwith1,000litersofdrinkingwatertotheBanDinDangCommunity,and113 reliefpackagestotheBanDinDum-NongBuaRongCommunity,AmphoeJungHan,RoiEt.

•Donating8,760bottlesofdrinkingwatertohelpvictimsinsixtambonsinAmphoeKhlongLuang, PathumThani.JoiningwiththeKhlongLuangMunicipalityafterthefloodstocleanWhiteHouse VillageaspartoftheactivityBigCleaningDay.

Providing Relief to Victims of Natural Disasters

Theyear2011wasayearwhentheworldincludingThailandallgreatlysufferedfromnaturaldisasters,especiallythefloodinginThailandstartingattheendofJulyandhavingresultedinsubstantialagriculturalandindustrialdamageandlossin63provincesacrossthecountry.

Duetoanumberofdomesticandinternationalcrises,theEGCOGrouphastakenpartinthereliefandrestorationprogramsforvictimsassummarizedbelow:

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InternalControl

TheBoardofDirectorshasentrusted theAuditCommittee theresponsibility to reviewtheappropriatenessandeffectivenessoftheinternalcontrolsystemprovidedbythemanagement.ThisistoensurethatEGCO’sinternalcontrolsystemisadequate,appropriateandinlinewiththeguidelinesofTheStockExchangeofThailand’s(SET)andtheinternalcontrolframeworkof theCommittee of SponsoringOrganizations of the TreadwayCommission (COSO).EGCO’s internalcontrolcoversmanagementcontrol,operationalcontrol, financialcontrol,andcompliancecontrol.

TheBoardsetoutthedutiesandresponsibilitiesoftheInternalAuditDivisionintheInternalAuditCharterwhichwasreviewedbytheAuditCommitteeandapprovedbytheBoard.TheInternalAuditDivisionindependentlydischargesitsdutiesandfunctionallyreportstotheAuditCommittee.Meanwhile, theadministrative tasksof the InternalAuditDivisionare reportedtothePresident.TheinternalauditscopesofEGCOanditssubsidiariesarefinancialaudit,operationalaudit,complianceaudit,informationsystemaudit,andmanagementaudit.

EGCOcontrolframeworkandoperationaredescribedasfollows:

ControlEnvironment

• TheBoard set up the clear vision,mission, and objectives to beguidelines for the managementandemployees.Theoperationisperiodicallyreviewedtoensureconformity withthebusinessobjectiveswhilethefairtreatmenttostakeholdersisalsoconsidered forlong-termbenefitofEGCO.

• Tosupportbusinessgrowth,theorganizationstructurehasbeenproperlysetandadjusted bytheBoardwhentheenvironmentchanges.

• CodeofConductincludinggoodcorporategovernanceguidelinesarewrittenandreviewed periodically.All employeesareadvised tounderstand their responsibilities touphold theCodeofConductwhichincludesthemeasuretoavoidtheconflictofinterest.Failure toobservetheCodeofConductmayresultinarangeofdisciplinaryactions.

• Regulations, instructions and Table of Authority for accounting, finance, budget, procurement,andhumanresourcefunctionsareestablishedandclearlyannouncedto allemployeesforacknowledgmentandpractices.

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RiskManagement

TheRiskManagementCommittee(RMC)hasbeensetupattheManagement levelwhichcomprisesofEGCO’stopexecutives.EGCO’sPresidentservesasthechairmanofthecommittee.RMCreviewsriskmanagementevaluationandmitigationofEGCOandsubsidiariesandregularlyreportstotheAuditCommitteeandtheBoard.TheBoardofDirectorshasfocusedonthelikelihoodoftheirregularities,riskmitigationandearlywarningsystems.TheBoardentruststheAuditCommitteetoreviewwiththemanagementtheriskmanagementpolicyandthecompliancewithsuchpolicy.

ThedetailsofRiskManagementofEGCOandsubsidiariesaredisclosedunder“RiskFactors”.

ControlActivities

ToensurethatguidelinesandpoliciessetbytheBoardandthemanagementarecompliedwith,efficientcontrolofaccounting,finance,operation,andgovernanceareimplementedasfollows:

• Transactionsandamountforapprovalauthorityofmanagement aresetforthintheTableofAuthority.

• Approval authority, operation or accounting record, and safeguardofassetfunctionsaresegregated.

• TheAssetManagementDivisionisresponsibleforregularly monitortheoperationresultsofEGCO’ssubsidiariesandjoint ventures.

• Approvalprocessofconnectedtransactionsisclearlysetout. Theconnectedtransactionsaretobeapprovedbydirectors ormanagementwhohasnoconflictsof interest, takeninto accountthebestbenefittoEGCO.

• TheCorporateSecretaryisentrustedtoensurethatEGCOand the Board’s practices together with EGCO’s information disclosureareincompliancewiththeSecuritiesandExchange Acts, the notification and regulation of theSET,Securities andExchangeCommission(SEC),andotherrelatedlawsand

regulations. TheLegalDivision alsoprovidesconsultation basedoncasebycasebasis.

• TheInternalAuditDivisionisresponsibleforregularlyreviewing adequacyandappropriatenessof internal control system. InternalAuditPlanissettocoverallmajorfunctions.

• ToensurethecompliancewithComputerRelatedCrimeAct, the Computer Related Crime Act has been clearly communicated to all employees for acknowledgment and compliance.AllemployeesarerequiredtosignITCompliance Statementtoconfirmthenon-violationofthelaw.

InformationandCommunication

EGCOhasestablishedinformationsystemtomaintainadequateimportantinformationforcommittees’andmanagement’sdecisionmakingviacommunicationchannelsasfollows:

• For internal communication, all employees will receive information about the company’s policies, regulations, instructions and good corporate governance via intranet anddifferentlevelofmeetings.Employeesareencouraged to provide feedback on the improvement of operations efficiencyinthemeetings.

• Forexternalcommunication,EGCO’sinformationhasbeen disclosedviatheSET’sCommunityPortalsystemandEGCO’s websiteatwww.egco.comaswellasthequarterlyanalyst meeting,EGCOnewsletter,andpressconference.

• ThemeetingsamongtheAuditCommittee,externalauditors and concerned Management are held to review the complianceoffinancialaccountingwiththeGeneralAccepted AccountingPrinciplesandInternationalAccountingStandards.

• Information are recorded andmaintained completely, correctly, timely and adequately to support the decision making. Information such as power plant operation data alongwithinformationonaccounting,budgetingandfinance arerecordedandmaintained.

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• Accountingrecordsandsupportingdocumentswhichwillbe used to support the financial statements preparation are completelykeptinorderlymanner.Thereisnodeficiencyin thosedocumentsinformedbytheauditor.

• The compliance database is developed for reference andtracking.TheLegalDivisionisresponsibleforupdating thecompliancedatabaseandprovidingrecommendationto employees.

• TheBoardofDirectors receives invitation letters,meeting agendasandsupportingdocumentsfarenoughinadvance ofthemeeting.Discussion,remarksandrecommendations oftheBoardandstandingcommitteesincludingresolutions arerecordedintheminutesofmeetingsforfuturereference oraudittrail.

• Communication channel is provided for employees to reportsuspectedviolationsofEGCO’sCodeofConductto theManagementortotheBoardofDirectors(whistleblower). Themessageprovidersarewellprotectedbythecompany.

Monitoring

Toensurethattheestablishedinternalcontrolsystemissufficientandappropriate,thefollowingactivitiesareimplemented.

• The responsible unit is assigned to follow up,monitor and set appraisal criteria to benchmark EGCO’s and its subsidiaries’ performance against theplan.Gapanalysis is carriedout andscheduled reports are submitted to the ManagementandtheBoard.

• Externalauditorsareindependentandregularlyreporttothe AuditCommittee.

• EGCO and its subsidiaries’ internal controls have been evaluatedannually.Theevaluationformhasbeendesigned followingSEC’sandSET’sinternalcontrolguidelinesaswell asCOSO’sinternalcontrolframework.Theevaluationresults

havebeenreportedtotheAuditCommitteeandtheBoard ofDirectorsbytheInternalAuditDivision.The2011evaluation resultscanbeconcludedthattheinternalcontrolofEGCO anditssubsidiariesaresufficientandappropriate.

• Toensurethecompliancewithrules,regulationsandCode of Conduct, employees from Senior Vice President and upwards of EGCO and its subsidiaries are required to thoroughlyreviewtheir2011workpracticesbeforesigning theCodeofConductComplianceStatementandtheGeneral RepresentationLettertohis/hermanagersuptothePresident. EGCO’sPresidentand theManagingDirectorsofEGCO’s subsidiaries also sign the Code of Conduct Compliance StatementandtheGeneralRepresentationLetteraddressed totheChairmanoftheBoardofeachcompany.

• Withregardtotheauditor’sreviewofthefinancialstatements, theauditorhasalsoreviewedinternalcontrolonaccounting andfinancetodefinetheauditapproach,durationandscope of work. In 2011, no significant finding, regarding the improvementoninternalcontrolsystems,hasbeenfound.

TheAuditCommitteereviewstheinternalcontrolsystemandriskmanagementthroughouttheyearandregularlyreportstheresulttotheBoardofDirectors.Asaconsequence,theBoardagreeswiththeAuditCommitteethattheinternalcontrolsystemofEGCOanditssubsidiariesisappropriateandthatitsufficientlysafeguardsEGCO’s assets frommisuse or unauthorized use. TheAuditCommitteeandtheBoardhavenotreceivedsignificantdeficiencyreportontheinternalcontrolsystemfromexternalauditorsandInternalAuditDivision.

Inaddition,the2011AuditCommittee’sReportisattachedtothisAnnualReport.

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Tocreate long termvalue forshareholders,EGCOrecognizes the importanceofproperlyanalyzing andmanaging its business risks. TheBoard ofDirectors entrusted theAuditCommitteetoreviewtheCompany’sriskmanagementpolicieswhiletheManagementhastheresponsibilitytoimplementsuchpoliciesandreporttheprogresstotheAuditCommitteeandtheBoard.Inthisregard,theRiskManagementCommitteehasbeensetupattheManagementlevelwhichcomprisesEGCO’stopexecutivesandtheManagingDirectorsofEGCOsubsidiaries.EGCO’sPresidentservesasthechairmanoftheCommittee.RayongPowerPlantandEGCOsubsidiariessuchasKEGCO,andESCOalsohavetheirownriskmanagementcommitteestohelpensurethattheirparticularriskswillbemanagedadequately.

EGCOGrouphassetuptheriskmanagementpolicyinaRiskManagementManualwhichservesasaguidelinefortheEGCOGroup.

About thefloodsituation incentralThailandandBangkokareas,EGCOgroup’selectricitygenerationandoperationhavenotbeenaffectedbythefloods.Thedetailsarepresentedinthisarticle.

Asummaryofkeyriskfactorsandassociatedmitigationmeasuresisasfollows:

1. InvestmentRisk

EGCOinvestsinelectricitygeneratingbusiness.ItsmainsourcesofincomearedividendsfromsubsidiariesandjointventureswhichsellanddistributepowerunderlongtermPowerPurchaseAgreements(PPA).

EGCOplanstocontinuouslyinvestinnewprojectsinaccordancewithEGCO’sstrategy.SuchprojectdevelopmentmayentailrisksthatwillaffectEGCO’sinvestmenttarget.Theinvestmentrisksareasfollow:

1.1 Risks from Project Development

EGCOplanstoexpandits investment inorder tomaintaincontinuousgrowth,both in Thailandand foreigncountries.Keyprojectsare listed in the investmentplanso that EGCOcanappropriatelyallocateresourcestothoseprojects.Failuretoaddnewassetsto theportfolio either throughGreenfielddevelopment orAcquisitionwill affectEGCO’s long-termoutlook.Also,accordingtothedecreaseofrevenueinelectricitytariffstructure, theearningsfromnewprojectsmaynottimelysubstituteforthedecliningofrevenuefrom existingpowerplants.

RiskFactors

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

To ensure the success of project development, EGCO BusinessDevelopment Teamhas analyzedand identified thekeyrisksinvolved.Theseincludeeconomic,political,and social policies of target countries, economic situation, financial costs, as well as machine, equipment, and construction costs.Moreover, compliancewith laws and regulations to prevent environmental, social,and health impactsareconcernedaswell.

EGCOhaspreparedriskmitigationmeasures.Forinstance, fundamentalanalysisoftargetcountrieswasconductedby gatheringnecessaryinformationsuchasPowerDevelopment Plan(PDP),electricityandtaxstructure.Projectinformation such as factors of electricity generating will be studied to appraisewhethertheprojectsarefeasiblewithacceptable costandcompetitiveprices.

Besides the project feasibility, EGCO also set up the mechanisms and process to review and scrutinize new investment. Suchmechanisms include the reviewby EGCOManagementCommitteewhichcompriseEGCO’stop management, and the InvestmentCommitteewhich is the Board’scommitteetoensurethatallmaterialrisksareidentified andmanaged. Thecommitteeswill also review themajor conditionsoftheShareholders’Agreementsuchasdividend policy,rightstoauditbeforesubmittingthoseagreementsfor theBoard’sconsideration.

2. OperationalRisks

2.1 Risk of Failure to Get Target Return on Investment

EGCOhastheresponsibilitytoproperlymonitorandmanage itsinvestmentinordertoreachorexceedtargetedreturnon investment.Withoutefficientmechanismtomanageinvestment assets,EGCOmaynotget returnon investmentat target. Typicalmeasuresimposedtomitigaterelevantrisksareas follows:

• Establishassetmanagementpoliciesand,wherepossible, assign management and staffs to be EGCO Group representatives’directorsormanagementofitssubsidiaries andinvestmentprojects.

• Monitor operating performances of each facility and analyzetheactualreturnoninvestmentagainsttheplanned target.

• Prepareregularprogressreportstoseniormanagement andtheBoardofDirectorssothatatimelyandappropriate action can be taken. The exceptional operating performanceistobereportedaswell.

• Coordinate with partners for joint-audit in investment companiestoensuretheadequacyandeffectiveofinternal controlsystem.

With these actions, EGCO will achieve target return on investment.According to the2010operatingperformance report,theincomesfromEGCO’sportfoliohavebeenreceived inlinewithmodeledresults.

2.2 Plant Performance Risks

Acommitmenttogenerateanddeliverelectricitypursuantto aPPAwithEGATentails theperformanceriskswhichmay causedbystaff,equipmentandmanagementapproach.The significantperformancerisksareassummarizedbelow:

(1)PlantEfficiency

TherearevariousefficiencybenchmarksunderaPPAwith EGATi.e.,EquivalentAvailabilityFactor(EAF)andHeat Rates.Failure tomeet theseperformancerequirements wouldresultinpenaltiesandpotentialterminationincertain extremecases.

Thecauseofsuchriskmaybepowerplantaging.With consistent, professional maintenance being a policy in place for each of EGCO Group’s power plants, this riskisconsideredtobelow.Despitethat,themanagement hasestablishedsystematicprocedurestoensurethatall relevantperformancetargetsaremet.Theseprocedures areasfollows:

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- To include thekeyplantefficiencyparameters in the CorporateKeyPerformanceIndicatorsofpowerplantsin theEGCOgroupinordertoensurethattheproduction efficiencyiscloselymonitoredandallemployeestake partintheplantefficiency.

- TosetupEarlyWarningSystemsforcriticalinformation regardingtheplantoperationprocesses.

- Toensurethatthescheduledpreventivemaintenance ofpowerplantequipment iscarriedoutona regular basisbyqualifiedstaff.

- Toensurethatsparepartinventoryisadequateandwell managed.

- To implement theQualityManagement System (ISO :9001:2008)toensurethatthosepowerplantsoperate inaccordancewiththetermsoftheirPPAs

- Tocontinuouslydevelopthecompetenciesofthefirms’ humanresources.

With consistent operation along with these mitigation actions,thechanceofthisriskislow.

(2)RawWaterShortageforElectricityGenerating

Theelectricitygeneratingprocessrequirespretreatment anddemineralizationofrawwaterforcoolingsystemand steamboilersystem.

The risk of a rawwater shortage can result in plant stoppages,revenueshortfall,orpenaltypayments.Therisk couldbecausedbyclimatechange,overall increasing ofwaterusage.Notenoughamountofrainfallorthedelay of rainy season in some yearsmay affect to sufficient reserveofrawwater.

Although EGCO Group has never before experienced anywatershortage,themeasuresaresettopreventand mitigatesuchrisksbyincreasingtherawwaterstorage capacity,seekingadditionalsourcesofrawwatersupply and settingmeasures tomaximize thebenefit ofwater usage.Theriskofrawwatershortageisquitelow.

(3)FuelShortageforElectricityGeneration

Therisksofafuelshortageforelectricitygenerationcan result in plant stoppages, revenue shortfall or penalty payments.Theshortageof“coalandbiomass”fueltype couldbecausedbyincreasingdemandorpricefluctuation. Furthermore,naturaldisastersuchasfloodsmayaffectthe qualityandquantityoffuel.

From thepast record, EGCOGrouphas never before experiencedanyfuelshortage.However,themeasures aresettocloselymonitorandtopreventandmitigatesuch riskforcontinuouspowergenerationasfollows:

- EGCOGroup’sgasfiredpowerplants,whichcontributed 54% of 2010 total electricity sales revenues, have enjoyedlongtermGasSupplyAgreementswithPTT, exceptforRayongPowerPlantandKEGCOwhichEGAT isthegassupplierunderthetermsoftheirPPAs.The quantity and quality of natural gas and other key parametersareallspecifiedintherelevantagreements. WithPTTand/orEGATbeing themainsuppliers, the risksoffuelgasshortageisconsideredlow.

- EGCOGroup’scoalfirepowerplants“BLCPandQuezon”, whichcontributed36%of 2010 total electricity sales revenues,havelongtermCoalSupply&Transportation Agreement. The suppliersmust supply coalwith the quantity and quality as specified in the agreement. Efficient coal reserve management is a significant measurewhichcanreducethistypeofriskaswell.

Moreover,coalprocurementfrompotentialalternative supplierswhennecessaryisanothermeasuretoensure theadequacysupplyunderthetermsofthePPA.

- EGCOGroup’sbiomasspowerplantsusingricehusks andParawoodchipsasfuel,whichcontributed2%of 2010totalelectricitysalesrevenues,mayfacethefuel riskintermsofinadequatesupplyandvolatilepricing. This is because those agricultural products may havealternativeuses in themarket. Since long term fuelsupplyagreementscannotbeestablishedasthere arefewcreditworthysuppliersofsuchfeedstock, the primaryriskpreventionmeasuresaretoreservemore

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fuelandtoseekalternativefuelsourcesinsurrounding areas.Thismitigationmeasurescanhelpmanagethe fuelpriceatacertainlevel.However,thebiomassfuel is still a seller’smarket. As such, the impact of the inadequateofsuchfuelonEGCO’srevenuesislow.

(4)SafetyHealthEnvironmentandSocial

EGCO realizes that the electricity generating process which uses natural gas and coal as primary fuels will have certain impacts on the safety, environment and qualityoflifeofemployeesandsurroundingcommunities. Thecauseofriskcanarisefromtheinefficiencyofpower plant or the inadequatemeasurement.Consequently, EGCO has taken the following actions to mitigate any potential negative impactsand reduce the likelihood of suchrisksasfollows:

- Developand livebyEGCOgroup’sCorporateSocial Responsibilitypolicy

- Develop Safety, Health and Environment (SHE) ManagementManual for all EGCO owned plant as guidelinesforimplementationandaudit.

- Prepare the work manuals and emergency plan, implementtrainingplanandtestingofplan,equipment andwarningsystemwhileensuringstrictcompliance withthemanual.

- Developa listofgoverning lawsandregulationsand designateresponsiblepersontomonitorthecompliance withrelatedlaws.

- MonitorandensurethecompliancewithSHEManagement Manual

Bycomplyingwiththeabovemeasuresregularly,wecan beensuredthatthisrisklikelihoodisquitelow.

(5)Accident,Resistance,andSabotage

EGCO business may face risk from accident that may cause fire. Besides, the operationmay subject to the communityresistanceiftheelectricitygeneratingprocess hasnegativeimpactsonthecommunity.Suchrisksmay becausedbythepowerplantagingcondition,personnel operation,orsabotageevent.

Withexistingmitigationactionsandsituationmonitoring, thisrisklikelihoodisquitelow.

Managementiswellawareoftheaboverisksandhasset the following measures to mitigate and reduce the likelihoodofthoserisks.

- Tostronglyencourageemployeestoprudentlydischarge theirdutieswiththebeliefthatcarelessnessmaylead tosignificantdamages.

- Toperiodicallymaintainallequipmentasscheduledto ensurethattheycanworkefficiently.

- Tostrengthenrelationshipwithsurroundingcommunities tofostertherightperceptionaboutEGCObusiness.

- To strengthen relationship with local government authorities.

- Tosetthesecurityplanwithregulardrillsandprovide equipmentsuchasclosedcircuitTV.

- To secure the insurancepolicy that covers all risks, machinerybreakdown,businessinterruptionandthird party liability toassurethatassetsandpersonnelwill beproperlyandadequatelyprotectedandthedamages willberecoveredeveninanunexpectedcase

- In2011, themanagementhasconsideredtoprocure thepoliticalviolenceinsurancepolicywhichcoversthe effectsofpoliticalviolationandterroristattack.Effective from2012,theinsurancewillcoverEGCO’spowerplants andsubsidiariesincludingEGCOtowerandEgcomtara. However,theinsurancepolicyonterroristattackhave alreadybeenprocuredformostofEGCO’sjointventure powerplants.

3. FinancialRisks

TheinvestmentsofEGCOGrouparecapital-intensive.Sincetheprimaryfundingsourcesareloansfromdomesticandinternationalbankloanmarkets,foreignexchangeratefluctuationandinterestratefluctuation,areimportantriskstobemonitoredandmitigated.Thisriskmaybecausedbymismatchofrevenueandloanstructureincludingthechangeofforeigncurrencyandinterestrate.Incasethatthechangeofforeigncurrencyandinterestratearenegative

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toEGCOstructure,itwillleadtodeclineintheGroup’soperatingperformance.Therefore,themitigationmeasuresareestablishedasfollows:

3.1 Foreign Exchange Rate Fluctuation

EGCOGrouphasapolicytomitigatecurrencymismatches foreachofitsinvestmentprojectstoprudentlevels.Ingeneral, thisisachievedbymatchingcurrenciesofprojectdevelopment andconstructioncostswithfundingsourcecurrenciesand subsequently matching the currency of long-term funding profileswiththoseofeachproject’srevenuestreamduring theoperationphase.

3.2 Interest Rate Fluctuation

EGCO Group has a policy to manage risk of interest rate fluctuationbyusing financial hedging instruments (namely interest rateswaps) to fix floating interest rateexposure to prudentlevelsinordertoprovidethemostpredictablecash flowsoveritslong-termpowerpurchasecontracts.Ifinterest ratefixturesarenotavailableforthefullprojecttermsrequired, EGCOwillseektoenterintoorcauseitsprojectcompany’sto enter into financial instruments that canbestmitigate the interestrateriskssubjecttomarketavailabilityandcost.

With thesemeasures, the impacts toEGCOgrouparenot much.

4. OtherRisks

4.1 Business Interruption due to flood situation

EGCOgroup’selectricitygenerationandoperationhavenot beenaffectedbythefloodsoccurredin2011.However,flood situationandimpacttendtooccurmoreofteninmanyareas ofThailand.Thus,thefloodsituationwillbemonitoredfurther. EGCO’sriskmitigationmeasuresareasfollows;

ForEGCOOffice:

• Prepare procedure for floodprotection plan at EGCO tower. The jobdescriptions, responsiblepersons, and telephonenumbersforcontactaredescribed.

• Defineproceduretoturnofftheelectricitysysteminorderto protectthelossoflifeandthefailureofofficesystemsand computersystems.

• Seekareliableserviceprovidertoarrangeabackupsite atasafetyzonetoensurethatEGCOcancommunicate withrelatedpartiesandemployeessothatthemanagement’s policyandthesituationoffloodaroundEGCOtowerwill beacknowledged.

• Coordinatewithbusinesspartnerstoarrangetemporary officeduringfloodsituation.

ForPowerPlants:EGCO’spowerplantsaredesignedtobe situated in highland and the drainage systems are well- designed.However, theManagement set the protection measurementasfollows;

• Provideappropriatenumbersofelectricwaterpump.

• Establishcrisismanagementplanincludingprocedures, job descriptions to mitigate natural disaster such as floods.

• Procurethe“AllRisks”insurancepolicywhichcoverflood insurance.

• Monitorweatherforecastandcommunicatewithgovernment authoritiestotakeactionsasplanned.

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1. Operatingresultsforyear2011

1.1 Operating results

Profit fromoperatingofEGCOGroupbefore foreignexchange (FX) endedDecember 31, 2011was5,301millionbaht, adecrease963millionbahtcomparedtothesameperiodoflastyear.Thiswasmainlydueto:

In2011,EGCOGrouphasincreasedthestakesinNamTheun2PowerCo.,Ltd.(NTPC)from25%to35%onSeptember29, 2010,whichresultedinafullybookedofrevenueinthisyearandledtoanincreaseinrevenueof213millionbaht.EGCOGroup alsoincreasedadditional26.125%sharesofQuezonPower(Philippines)LimitedCo.(Quezon)to52.125%onMarch25,2011, whichresultedinanincreaseinrevenueof355millionbaht.Inaddition,KhanomElectricityGeneratingCo.,Ltd.(KEGCO)’s maintenanceexpenses,interestexpensesandincometaxdecreased451millionbahtandRayongPowerPlant’sexpenses alsodecreased140millionbaht.Withsuchanincreaseinrevenueandadecreaseinexpenses,EGCOGroup’swouldhave recordedhighernetprofitof1,159millionbaht.

Ontheotherhand,AvailablePayment(AP),accordingtothePowerPurchaseAgreement(PPAs),ofRayongPowerPlant, KEGCO,BLCPPowerCo.,Ltd.(BLCP)andGulfPowerGenerationCo.,Ltd(GPG)decreased1,404millionbahtfromthesame periodoflastyear.

EGCOGroupalsohadextraordinaryitemsin2011suchasQuezon’sprepaymentfeefromrefinancingandwithholdingtax fromspecialdividendpaymentandConalHoldingsCorporation(Conal)’schangeinthefunctionalcurrencyfromthePhilippine pesotoU.S.dollars,totalingof748millionbaht.Theseledtolowerprofitof2,152millionbaht.

Fromallabovemainlycauses,theprofitbeforeFXwas5,301millionbaht,adecreased963millionbahtfromtheprevious year.Ifexculdingextraordinaryitems,EGCOGroup’sprofitbeforeFXwouldhavebeen6,049millionbaht,adecreaseof 215millionbahtfromthesameperiodoflastyear.

ManagementDiscussionandAnalysis

Summaryresultsofprofit(loss)beforeFXendedDecember31,2011

PowerGeneration Others PowerGeneration Increase/

TotalRevenues 8,005 7,253 991 856 - - 8,996 8,109 (887) (10%)

TotalExpenses (7,451) (7,138) (647) (619) - - (8,098) (7,757) (341) (4%)

ShareofProfit(Loss) - - - - 5,473 5,083 5,473 5,083 (390) (7%)

NCI*beforeFX (76) (93) (31) (41) - - (107) (134) 27 26%

Profit (Loss) before FX 478 22 313 196 5,473 5,083 6,264 5,301 (963) (15%)

FX 11 (158) (32) 13 560 (166) 539 (311) (850) (158%)

Net profit (loss) 489 (136) 281 209 6,033 4,917 6,803 4,990 (1,813) (27%)

Unit:MillionBaht

EGCOandSubsidiaries JointVentrues Total Change

2010 2011 2010 2011 2010 2011 2010 2011 (Decrease) %

*NCI:Non-ControllingInterests

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1.2 Capacity

AsofDecember31,2011EGCOGroup’sportfoliocomprises15operatingplantswithtotalcontractedcapacitywithElectricity GeneratingAuthorityofThailand(EGAT)underlong-termPPAsof3,862MW.ThisresultedinEGCOGroup’smarketshare inThailandof12%fromatotalinstalledcapacityof31,447MW.

Significanteventsin2011canbesummarizedasfollows:

1.2.1 The purchase of operating assets

• OnMarch25,2011,EGCOcompletedtheacquisitionofanadditional26.125%interestinQuezon,bringingEGCO’s totalownershipinterestinQuezonto52.125%.Inaddition,EGCOcompletedtheacquisitionof100%oftheoutstanding sharesofCovantaPhilippinesOperatingInc.(CPOI),anewregisterednameofPearlEnergyPhilippinesOperating Inc.(PEPOI).PEPOIisanentitywhichprovidesoperationandmaintenanceservicestoQuezonthroughalong-term OperationandMaintenanceAgreement.

1.2.2 Development of new projects

EGCO’sbusinessstrategyplacesemphasisonexpandingitsinvestmentinpowergenerationinThailandandtheASEAN countries,aswellasaninvestmentinrelatedenergyprojectsorrenewableenergy,includinghydropower,solarandwind energyetc.Thetargetistoprovideoptimumreturnstoshareholdersbyimprovingtheprofitabilityofourexistingassets andacquiringnewprojectswith reasonable riskand returnprofiles, tomaintainmarketshareasa leadingenergy companyandtostrengthenitsfinancialpositionandoperatingresultsforEGCOGroup.

Thedevelopmentofnewprojectsin2011canbesummarizedasfollows:

• OnJanuary4andFebruary11,2011,EGCOhasbeenawardedthelicensesfor2010FirmSmallPowerProducer Cogenerationprojects fromEGAT inaccordancewith the resolutionof theEnergyRegulatoryCommission. The projectsareTJCogen,TPCogenandSKCogen,whichhavecontractedcapacitywithEGATof90MWeachfor 25yearsandsignedPPAswithEGATonNovember25,2011.

• OnMarch1,2011,EGCOacquireda12.50%interestinXayaburiPowerCompanyLimited(XPCL)fromCH.Karnchang PublicCompanyLimited.XPCLisacompanydedicatedtothedevelopmentofXayaburihydropowerprojectwhich isarun-of-riverdamontheMekongRiverinLaosPDR.XPCLhasenteredintothePPAwithEGATtosell1,220MW, thecommercialoperationdateiscurrentlyscheduledforJanuary2019.

• OnDecember22,2011,NaturalEnergyDevelopmentCompanyLimited(NED)hasstarteditscommercialoperation ofphase1of8MWandexpectedtocompletethewholeprojectwithinfirsthalfof2012.Thecompanyisthelargest solarpowerplantusingthin-filmsolarcellsintheworldwithtotalinstalledcapacityof73MW(DC)/55MW(AC).EGCO has33.33%ownershipinNED.

Significantinvestmentsinthepoststatementoffinancialpositioncanbesummarizedasfollows:

• OnJanuary18,2012,EGCOacquired90%stakesinTheppanaWindFarmCompanyLimited(Theppana).Theppana isthewindpowerplant,locatedinChaiyaphumprovince.

• OnJanuary23,2012,EGCOacquired99.99%stakesinSPP4Co.,Ltd(SPP4)fromMEMCSingaporePteLtd.SPP4 isthesolarpowerplantwithinstalledcapacityof6MW,locatedintheboundarybetweenSrisaketandUbonRatchatani province.Inaddition,theplantisthefirstprivatesolarpowerprojectequippedwiththetrackingsystem.Thecommercial operationdate,electricitygenerationanddistributionsystemfor theProvincialElectricityAuthority (PEA)wason January24,2012.

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TheinvestmentinbothprojectsisinlinewithEGCO’sgoaltoexpanditsbusinesstowardstherenewableenergyand alsomeetswiththegovernmentpolicyregardingrenewableprojectsfor10years.

2. FuturePlans

EGCOhasplannedtoincreaseitsmarketsharesinpowerbusinessbydevelopmentoracquisitionofdomesticorregionalprojects takingintoaccountthefeasibilityoftheprojects,EGCO’sexperiencesandexpertisetoincreasethevaluetotheprojects,costs ofcapitalwithacceptablerisks.Theprojectsunderstudyanddevelopmentareasfollows:

2.1PrefeasibilitystudyofIndependentPowerProducerinvestmentusingtheexistinglocationofRayongandKhanompower plants.

2.2Developmentof3SmallPowerProducerprojectsinPhatumthaniandRatchaburiprovinceandNED’ssolarprojectasmention in1.2.2.

2.3Studyon theopportunity to invest in renewableenergyprojects.Currentprojectsunderstudyaresolar farmsandwind farms.

2.4StudyontheopportunitytoinvestinoverseasIndependentPowerProducerprojects.EGCOhashighpotentialtobeapartner inbothexistingandnewinvestmentprojectsgivenitsstrongtechnicalknowledgeandfinancialstrengths.

EGCOhasalsodevelopedtheknowledgeonenergymarket,investmentopportunitiesandgovernancestructureofothercountries intheregiontoidentifynewinvestmentprojects,whicheventuallywouldincreasethevalueoftheshareholders.

3. ReportandAnalysisoftheOperatingResults

EGCOhasinvestedintheIndependentPowerProducer(IPP),SmallPowerProducer(SPP),VerySmallPowerProducer(VSPP), OperatingandMaintenance(O&M)andRayongpowerplantasanoperatingcompanyasfollows:

(1) Subsidiaries which can be categorized into 2 businesses :

PowerGeneration

KhanomElectricityGeneratingCo.,Ltd.(KEGCO) IPP

EGCOCogenerationCo.,Ltd.(EGCOCogen) SPP

Roi-EtGreenCo.,Ltd.(Roi-EtGreen) SPP

SPP4Co.,Ltd.(SPP4) VSPP

TheppanaWindFarmCo.,Ltd.(Theppana) VSPP

Others

EGCOEngineeringandServiceCo.,Ltd.(ESCO),whichinvestedin O&M EgcomTaraCo.,Ltd.(EgcomTara) Water

PearlEnergyPhilippinesOperatingInc.(PEPOI) O&M

NorthPoleInvestmentCo.,Ltd.(NorthPole) HoldingCo.

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(2) Joint Ventures in Power Generation business

GulfElectricPublicCompanyLimited(GEC),whichinvestedin HoldingCo. GulfCogenerationCo.,Ltd.(GCC) SPP NongKhaeCogenerationCo.,Ltd.(NKCC) SPP SamutprakarnCogenerationCo.,Ltd.(SCC) SPP GulfYalaGreenCo.,Ltd.(GYG) SPP GulfPowerGenerationCo.,Ltd(GPG) IPP

BLCPPowerCo.,Ltd.(BLCP) IPP

NaturalEnergyDevelopmentCo.,Ltd.(NED) SPP

NamTheun2PowerCo.,Ltd.(NTPC) IPP

ConalHoldingsCorporation(Conal),whichinvestedin HoldingCo. WesternMindanaoPowerCorporation(WMPC) IPP SouthernPhilippinesPowerCorporation(SPPC) IPP AltoPowerManagementCoporation(APMC) O&M

QuezonPower(Philippines)LimitedCo.(Quezon) IPP

(3) Other investments

EGCOholds18.72%oftheoutstandingsharesinEastWaterResourcesDevelopmentandManagementPublicCompany Limited(EastWater)aslong-termfinancialinvestmentinmarketablesecurities.

EGCOholds12.50%oftheoutstandingsharesinXayaburiPowerCompanyLimited(XPCL).

3.1 The Analysis of EGCO and Subsidiaries

3.1.1 The Analysis of EGCO and Subsidiaries in Power Generation business

Profit(loss)beforeFXfor2011endedDecember31,2011ofEGCOandSubsidiariesinPowerGenerationbusiness decreased456millionbahtcomparedtothesameperiodoflastyear.ThiswasmainlyduetotheRayongPowerPlant andKEGCOasfollows:

2010 2011 Increase/(Decrease) %

Totalrevenues 2,589 2,312 (277) (11%)

Totalexpenses (2,112) (2,069) (43) (2%)

Profit (Loss) before FX 477 243 (234) (49%)

Rayong Power Plant :

• Rayong power plant’sprofit(loss)beforeFXdecreased234millionbaht.ThiswasmainlyduetothedeclineinAP, accordingtothePPA,amountingto253millionbahtandtheincreaseinplantmaintenanceasplannedamounting to146millionbaht.However,othercostswerelowerby266millionbaht,mainlyduetoincometaxandprovisionof obsoleteinventories.

Unit:MillionBaht

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• KEGCO’s profit (loss) before FX decreased 166 million baht. This was mainly due to the decline in AP, according to the PPA, of 675 million baht. However, the decrease in plant maintenance as planned and other costs from interest expenses and income tax were 250 million baht and 200 million baht, respectively.

3.1.2TheAnalysisofSubsidiariesinOtherbusiness

Profit (loss) before FX for 2011 ended December 31, 2011 of Subsidiaries in Other business was down by 117 million baht. This was mainly due to ESCO as follows :

• ESCO’s profit (loss) before FX sharply dropped 183 million baht, mainly from lower maintenance service income and lower spare part sales to overseas power plants.

3.2TheAnalysisofJointVenturesinPowerGenerationbusiness

Profit (loss) before FX from Joint Ventures in Power Generation business for the results of 2011 decreased by 390 million baht. This was mainly due to a decrease in profit from Conal, Quezon, BLCP and GPG whereas an increase in profit from NTPC.

The details are as follows :

• Conal’s profit (loss) before FX decreased 133 million baht, mainly due to the change in the functional currency from the Philippine peso to U.S. dollars amounting to 96 million baht.

2010 2011 Increase/(Decrease) %

Total revenues 2,798 2,181 (617) (22%)

Total expenses (2,358) (1,907) (451) (19%)

Profit(Loss)beforeFX 440 274 (166) (38%)

KEGCO : Unit : Million Baht

2010 2011 Increase/(Decrease) %

Total revenues 730 384 (346) (47%)

Total expenses (511) (348) (163) (32%)

Profit(Loss)beforeFX 219 36 (183) (83%)

ESCO : Unit : Million Baht

2010 2011 Increase/(Decrease) %

Total revenues 654 898 244 37%

Total expenses (518) (895) 377 73%

Profit(Loss)beforeFX 136 3 (133) (98%)

Conal : Unit : Million Baht

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• Quezon’sprofit(loss)beforeFXdecreased297millionbaht.Thiswasduemainlytoanincreaseinprepaymentfeefrom refinancingof440millionbahtandwithholdingtaxfromspecialdividendpaymentof212millionbaht.However,EGCO recordedhigherrevenueof355millionbahtfromadditionalsharesof26.125%onMarch25,2011.

• BLCP’sprofit(loss)beforeFXdecreased281millionbaht,mainlyduetothedeclineinAPof397millionbaht,according tothePPA.Inaddition,BLCP’scoalsuppliercouldnotprovidesufficientcoalstatedinCoalSupplyandTransportation Agreement(CSTA)duetofloodingsituationinAustralia.BLCP,thus,hadtobuyspotcoalinthemarketinordertomaintain theminimumlevelofcoalregardingPPA.Thisledtoanincreaseinfuelcostof152millionbaht.

• GPG’sprofit(loss)beforeFXdecreased117millionbaht.ThiswasmainlyduetothedeclineinAP,accordingtothePPA, of 79millionbaht and the increase inplantmaintenanceasplannedof 140millionbaht.However, other costswere downby84millionbaht.

2010 2011 Increase/(Decrease) %

Totalrevenues 2,775 5,106 2,331 84%

Totalexpenses (2,254) (4,882) 2,628 117%

Profit (Loss) before FX 521 224 (297) (57%)

Quezon : Unit:MillionBaht

2010 2011 Increase/(Decrease) %

Totalrevenues 8,990 9,037 47 1%

Totalexpenses (6,669) (6,997) 328 5%

Profit (Loss) before FX 2,321 2,040 (281) (12%)

BLCP : Unit:MillionBaht

2010 2011 Increase/(Decrease) %

Totalrevenues 11,447 11,381 (66) (1%)

Totalexpenses (9,671) (9,722) 51 1%

Profit (Loss) before FX 1,776 1,659 (117) (7%)

GPG : Unit:MillionBaht

2010 2011 Increase/(Decrease) %

Totalrevenues 1,728 2,703 975 56%

Totalexpenses (1,175) (1,937) 762 65%

Profit (Loss) before FX 553 766 213 39%

NTPC : Unit:MillionBaht

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• NTPC’sprofit(loss)beforeFXincreased213millionbaht,asaresultoffull-yearrecogonitionandtheacquisitionofan additional10%to35%stakesinthecompany,whichwascompletedonSeptember29,2010.Whilein2010thecompany recognizednetporfitof25%stakesfor5months,and35%stakesfor3months(NTPC’sCODwasonApril30,2010).

3.3 Financial Ratios

ProfitabilityRatios 2010 2011

GrossProfitRatio 34.04% 27.05%

OperatingProfitRatiobeforeFX 22.77% 14.60%

ProfitRatiobeforeFX 45.41% 39.42%

ProfitbeforeFXpershare(Baht) 12.96 9.75

ReturnonEquitybeforeFX 13.15% 9.34%

4. ReportandAnalysisofCashFlowPosition

AsatDecember31,2011,theendingbalanceofcashandcashequivalentswas8,402millionbaht,whichwas654millionbaht lowerthantheamountasatDecember31,2010.Thedetailsofthesourcesandusesoffundsareasfollows:

• Net cash received from operating activitieswas3,201millionbaht,mainlyfromoperatingactivitiesof2,777millionbahtand workingcapitalof424millionbaht.

• Net cash payment for investing activitieswas1,557millionbahtmainlyduetoinvestmentinjointventures,Quezon,PEPOI andNEDtotaled6,570millionbahtandshort-terminvestmentwas1,489millionbaht.Meanwhile,dividendreceivedfromjoint venturesandotherstotaled6,518millionbaht.

• Net cash payment for financing activitieswas990millionbaht.Thiswasmainlyduetothedividendpaymenttoshareholders totaling2,845millionbaht,theloanrepaymentsforEGCOCogen,Roi-EtGreenandKEGCO’sdebenturetotaled724million baht,andtheinterestpaymentsof461millionbaht.Meanwhile,EGCO’sdebtdrawdownwas3,043millionbaht.

Financialratios 2010 2011

Debttoequityratio(Time) 0.21 0.25

Bookvaluepershare(Baht) 104.13 110.13

Currentratio(Time) 10.26 11.72

Quickratio(Time) 5.59 6.69

Although,theendingbalanceofcashandcashequivalentswas8,402millionbaht,EGCOhasinvestmentplansin2012,which willutilizefundsfromcashonhandandloansfromfinancialinstitutions.Thedebttoequityratiomaybehigherthanthepresent at0.25times.

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Inconductingthenormalbusinesscourses,therearerelatedtransactionsbetweenEGCOoritssubsidiariesandpersonswhomayhavepotentialconflictofinterest.EGCOendeavorstoensurethatthesetransactionsarejustifiedandincompliancewiththeStockExchangeofThailand(SET)andtheCapitalMarketSupervisoryBoard’srulesandregulations.ApartfromdesignatingtheauthorizedpersonstoapprovethetransactioninaccordancewiththeTableofAuthority,theAuditCommitteeisentrustedtoreviewtherelatedtransactionsthatneedtobeapprovedbytheBoardofDirectors.Thedetailsoftherelatedtransactionsaredisclosedunderitem31oftheNotesto2011FinancialStatementsfortheperiodendedDecember31,2011.

ProceduretoApprovetheRelatedTransactions

EGCOlivesbythefollowingpoliciesandguidelinesintreatingandapprovingtherelatedtransactions.

• IncaseofenteringintoanycontractsoranyrelatedtransactionsbetweenEGCO,subsidiaries,jointventurecompanies,associated companiesand/oroutsideparties,EGCOwillconsiderthenecessityandjustificationofsuchtransactionsforthebestinterestof theCompany.Transactionpricesarechargedatfairmarketpricelikethetransactionswithotheroutsideparties(Arm’sLength Basis).Ifthereisnosuchprice,EGCOwillapplythepriceofsimilarmarkettransactions.EGCOmayalsocomparethepricewith theonerecommendedbyindependentappraisertoensurethatsuchpriceisreasonabletomaximizetheCompany’sbenefits.

• Related transactions that are consideredconnected transactions in accordancewith theSET’s regulationwill be treated in accordancewiththerequirementsoftheSET’sandSecurities&ExchangeCommission(SEC)andmustbereviewedbytheAudit CommitteeincasesuchtransactionmustbeapprovedbytheBoardofDirectors.

• FinancialassistanceorguaranteeprovidedtoGroupcompaniesorconnectedpersonswillbeconductedprudentlytoensure theutmostbenefitsoftheGroupcompanies.Feewillbechargedusingthemarketrateasatthetransactiondate.

• Thesummaryoftransactionswithcommercialtermthatanordinarypersonwillagreetodealwiththecounterpartyundersimilar circumstances,onthebasisofcommercialnegotiationandwithoutanydependentinterestresultedfromthestatusofthedirector, executiveorrelatedperson,asthecasemaybe,shallbereportedtotheAuditCommitteeannually.Thisisaimedtoensurethat suchtransactioniswellgroundedandprovideoptimalbenefittotheCompanyandinlinewiththeapprovedprocess.Itshould benotedthattheManagementhadalreadyreportedthetransactionsin2011totheAuditCommitteeandtheBoard.

• Inacasethatashareholders’approvalisneeded,themajorshareholderwhoistheconnectedpersoncanattendthemeeting inordertoconstituteaquorumbutwillnothaveavotingright.Sincethevotingwillbebasedonthenumberofshareholderswho areeligibleforvoting,thiscriteriondoesnothavethenegativeimpactonthequorumorthevoting.

• Directorsandmanagementwithpotentialconflictofinterestwillnotbeallowedtovoteorattendthemeeting

RelatedTransactionsin2011

EGCO’srelated transactions in2011werenormalbusiness transactionswithnoobjective tosiphonprofitsbetweenEGCOor itssubsidiariesandpartieswithpotentialconflictofinterest.Eachtransactionwasdulyapprovedunderthetransparentprocessandthepersonswithpotentialconflictofinterestswerenotinvolvedinthedecisionmaking.SuchtransactionswerewelljustifiedthattheywerecarriedoutforthebestinterestoftheCompanylikethetransactionswiththethirdparties.Thesystemtofollowupandreviewthetransactionswasalsoinplacetoensurethattheyarecarriedoutinlinewiththeestablishedprocess.

RelatedTransactions

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Detailsofrelatedtransactionsin2011areassummarizedbelow.

1. RelatedTransactionswithEGAT

IncarryingouttheEGCOGroup’sbusiness,therewererelatedtransactionsrelatingtothepowersaleandmaintenanceservices betweentheGroupcompaniesandEGAT,amajorshareholderwhichowns25.41stakesinEGCOandhas4representative directorsonEGCOBoard.However,allthetransactionsfollowedtheestablishedprocessandinlinewiththedisclosureandother requirementsoftheSETandSEC.

1.1 Power Sold to EGAT

EGCO(RayongPowerPlant)andthreesubsidiariesbeingKEGCO,EGCOCogenandRoiEtGreenenteredintothePower PurchaseAgreement(PPA)withEGAT.ThePPAtermsforEGCO(RayongPowerPlant)andKEGCOaretwentyyearswhile thetermsforEGCOCogenandRoiEtGreenaretwentyoneyearseach.

SuchtransactionsarejustifiedaspowergenerationisEGCOGroup’scorebusinessandEGATisthesinglewholesalebuyer. Inaddition,thepricingandconditionsofthosetransactionsareinaccordancewiththestandardcontractswhichhavebeen endorsedbyrelevantgovernmentagencies.

Companies Relationship

TransactionvaluefortheperiodendedDecember31,2011(millionbaht)

SaleRevenue TradeReceivables

EGCO(RayongPowerPlant) 2,258 202

KEGCO Subsidiaries 2,171 94

EGCOCogen 1,263 189

RoiEtGreen 325 61

ThevalueoftherelatedtransactionsbetweenjointventurecompanieswithEGATareasshowninthefollowingtable.Since EGCOhasrecordedtheshareofprofitfromjointventurecompaniesusingequitymethod,thevalueofsuchtransactions isnotshownontheconsolidatedfinancialstatements.

Companies Relationship

TransactionvaluefortheperiodendedDecember31,2011(millionbaht)

SaleRevenue TradeReceivables

GEC JointVenture 14,499 2,878

BLCP 8,895 540

NTPC 2,685 448

1.2 Maintenance Service to EGAT

ESCO,EGCO’ssubsidiarywhichisanO&Mserviceprovider,hasenteredintoaMaintenanceAgreementswithEGATto providemajormaintenanceworkincludingotheradministrativeandrelatingservicestothepowerplants.

Suchtransactionisjustifiedasthepriceischargedona“costplusbasis”withtheannualCPIescalationwhichisthesame standardas thepricecharged to the thirdparties. Theagreement is effective for aperiodof eight years commencing September24,2007.

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Companies Relationship

TransactionvaluefortheperiodendedDecember31,2011(millionbaht)

MaintenanceFee TradeReceivables

ESCO Subsidiary 51 3

1.3 Maintenance Service by EGAT

EGCOGrouphasenteredintotheoperationandmaintenanceagreementswithEGATwhicharedefinedasthetransactions tosupportnormalbusinessofwhichthegeneral tradingtermsandconditionsareappliedandtheagreedpricecanbe calculatedfromtheassetsorthereferencedpriceinaccordancewithSET’sguidelines.

• EGCO(RayongPowerPlant)andKEGCOhasenteredintotheMajorMaintenanceAgreement(MMA)withEGATforthe latter toprovidemajormaintenanceservices, repair services,administrativeservices,andadditional services to their powerplants.Theservicefeesarechargedona“costplusbasis”withtheannualCPIescalation.Thecontractshavebeen extendedforanother8yearsforEGCO(RayongPowerPlant)withtheexecutiondateonDecember7,2006and4years forKEGCOwiththeexecutiondateonAugust1,2008.

• ESCOentersintothelongtermagreementwithEGATwiththetermstartingfromJanuary2005-December2017.However, EGATstartedprovidingtheserviceundertheagreementonMay23,2007.Theservicefeesarechargedona“costplus basis”withtheannualescalationof3%.

Companies Relationship

TransactionvaluefortheperiodendedDecember31,2011(millionbaht)

O&MFee TradePayables

EGCO(RayongPowerPlant) 131 56

KEGCO Subsidiaries 82 9

ESCO 2 -

• GEChasengagedEGATasadvisorformaintenancework.Thefeeischargedinaccordancewiththeagreedprice.

Companies Relationship

TransactionvaluefortheperiodendedDecember31,2011(millionbaht)

MaintenanceAdvisoryFee AccountPayables

GEC JointVenture 0.58 1

2. RelatedTransactionbetweenEGCOandSubsidiaries

EGCOhasenteredintothreeagreementswithsubsidiariesandjointventurecompanies,whichEGCOisamajorshareholderand EGCOexecutivessitontheirboards.

1. Agreementstoprovideofficespaceandbuildingservicesfor5companiesbeingKEGCO,ESCO,EGCOCogen,RoiEtGreen andEGCOMTara.Thespaceandservicescopeisspecifiedinthecontractwithaone-yearterm.

Suchtransactionisconsideredjustifiedasithelpsmaximizethebuildingspaceusageandthefeeischargedatthemarket ratewhichisthesameratechargedtothethirdparty.

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2. AgreementstoprovidemanagementservicestotheabovecompaniesandPEPOIofwhichthescopecoversinternalaudit, legalcounseling,Board’ssecretarialwork,technology,publicandcommunityrelationsandfinancialwork(excludeESCO andEgcomTara)andagreementstodispatchemployeestoNTPCBLCPandNED.

SuchtransactionsarewellgroundedbecausethoseGroupcompaniesdonothaveinternalstafftotakecareofsuchwork whileEGCOhasthecapabilitytoprovidetheservices.Themanagementservicefeeischargedinaccordancewiththeactual operatinghoursbasedonthecostplusbasis.

Companies Relationship

TransactionvaluefortheperiodendedDecember31,2011(millionbaht)

FinancialStatements

KEGCO 16

ESCO 9

EGCOCogen 8

EGCOGreen 1

RoiEtGreen Subsidiaries 7

EgcomTara 2

EGCOBVI 1

PEPOI 16

Total for subsidiaries 60

NTPC 20

BLCP JointVentures 24

NED 6

Total for joint ventures 50

3. FinancialSupport

EGCOprovidesfinancialsupporttosubsidiariesandjointventuresinaccordancewithitsownershipinsuchrespectivecompanies. Suchsupportsarenormalbusinesspracticesandareaimedatoptimizingshareholders’return.Theyaredulyapprovedbythe BoardinaccordancewiththeTableofAuthorityanddisclosedinthenotestofinancialstatementsasatDecember31,2011.

3.1 Inter-company Loan

ESCO

OnNovember22,2005,EGCOenteredintoanagreementtoprovideloantoESCOintheamountof780millionbaht.Principal paymentof46millionbahteachisscheduledannuallycommencingDecember2009toDecember2025.Theinterestrate issetinaccordancewiththemarketrateforlongtermloanatMLRminusacertainmarginandpayableonasemi-annual basis.TheoutstandingloanamountasatDecember31,2011was642millionbaht

3.2 Liabilities

EGCOprovided the loanguaranteeunder theSponsorSupportAgreement to subsidiary, joint venture andassociated companies.Significantinformationisasfollows.

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3.2.1 Contingent Liabilities

EGCO Cogen

AsofDecember31,2011,EGCOCogen’ssponsorshadacommitmenttoprovidetheloantoEGCOCogenifithasany financialliquidityproblemandcannotservicedebtandexpendituresinaccordancewiththeconditionsinthecontractin theamountnotexceeding200millionbaht.SinceEGCOholdsan80%stakeinEGCOCogen,itsguaranteeportionis notexceeding160millionbaht.

Thisagreementisjustifiedasitistheconditionintheloanagreementandthefinancialsupportisprovidedonapro-rata basisinaccordancewiththeownershipinthecompany.

Roi-Et Green

EGCOhadacommitmenttoprovidetheloanguaranteeintheamountnotexceedingthetotaloutstandingloanand interestpayment.AsatDecember31,2011,thetotalcommitmentamountedto470millionyenequivalentto194million baht.

Thisagreementisjustifiedasitistheconditionintheloanagreementandtheprojectdevelopmentcondition.

3.2.2 Letter of Guarantee

EGCOhasthecommitmenttothebanksunderStandbyLetterofCredit(SBLC)andtheCounterGuaranteeandissued onbehalfofEGCOforthesubsidiariesandjointventures.Detailsofthetransactionareasshownbelow.

NTPC

TheNamTheunIIproject’sfinanceisstructuredinawaythatwillallowsponsorswhoinvestinLaoPDRtoinjectequity onaback-endbasiswhilelenderswillallowloandrawndownduringthefirstphase.Assuch,lendersrequestthebanks onbehalfofthesponsorstoissuetheSBLCtoguaranteefuturecapitalinjection.ThefacevalueoftheSBLCwillreduce inaccordancewitheachcapitalinjection.

AsatDecember31,2011,EGCOrequestedMizuhoCorporateBanktoissuetheSBLCforthepurposeofproviding aguaranteedebtobligation in reserveaccounts forTheNamTheun IIproject’samounting toUS5milliondollars (equivalentto151millionbaht)andamountingto607millionbaht.

Theppana

EGCOrequestedKASIKORNBANKtoissuetheSBLCforthepurposeofprovidingaguaranteeforthePPAbetween TheppanaandProvincialElectricityAuthority.AsatDecember31,2011,theguaranteevaluewas4millionbaht.

GuidelinesforTreatingFutureRelatedTransactions

Mostoftheexistingrelatedtransactionswillcontinueinthefuture.EGCOwillseektoensurethatalloftherelatedtransactionsaretransparent,fairandbeneficialtotheCompany.TheBoardwillentrusttheAuditCommittee,theauditororindependentconsultantstoreviewandrecommendtheappropriatepricingandthejustificationofthosetransactions.Inaddition,materialinformationaboutsuchtransactionswhichincludestypes,valueandthereasonsforenteringintothosetransactionswillbedisclosedtotheshareholdersinaccordancewiththeregulationsoftheSETandSEC.EGCOwillalsoprovidetheupdatedinformation,rulesandregulationwithregardtotherelatedtransactiontorelevantpartiestofosterunderstandingwhichwillleadtofullcompliance,transparencyandthebenefitoftheshareholders.

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AccordingtothePublicLimitedCompaniesActB.E.2535,theAccountingActB.E.2543,theSecuritiesandExchangeActB.E.2535,andtheNotificationofCapitalMarketSupervisoryBoardre:“DisclosureofFinancialStatementsandPerformanceofListedCompanies”,theBoardofDirectorsisresponsibletopreparethetrueandfairfinancialstatementsoftheCompany.

TheBoardofDirectorshasalso issued theCompany’s regulationonaccounting, financeandbudgetingB.E.2550 towhich theManagementmustadhere.Inaddition,theAuditCommitteehasbeenentrustedtoensurethattheCompany’sfinancialstatementshavebeenpreparedinajustifiedandprudentmannerincompliancewithsuchrulesandregulationsandthattheappropriateaccountingpolicieswereconsistentlyapplied.Also, theAuditCommitteehasreviewedtheCompany’s internalcontrolsystemstoensure itsadequacyandeffectivenessasameanstosafeguardthecompany’sassetsfromunauthorizedpersonsandtorevealtheweaknesstopreventunlawfulconductandabnormalities.

ManagementhaspreparedbothconsolidatedandCompanyfinancialstatementsfortheyearended31December2011incompliancewiththeThaiGenerallyAcceptedAccountingPrinciplesundertheAccountingProfessionActB.E.2547.Theappropriateaccountingpolicieswereconsistentlyappliedandthefinancialstatementswerepreparedinaprudentandjustifiedmannerwithadequatedisclosureofsignificantinformationinthenotesofthefinancialstatements.

TheBoardofDirectorsisoftheopinionthatboththeconsolidatedandcompanyfinancialstatementsfortheyear2011,presentthecompany’sfinancialposition,operatingresults,changesinshareholders’equityandcashflowsfairly,inallmaterialrespects,andreliablemannerandthatsuchstatementsareincompliancewiththeGenerallyAcceptedAccountingPrinciplesandallgoverningrulesandregulations.

Mr.PornchaiRujiprapaChairman

StatementofDirectors’Responsibilities

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TheAuditCommitteeofEGCOconsistsof3independentdirectorswhosequalifications,experience,andexpertiseareinaccounting,finance, economics, law, organizationmanagement andenergybusiness. TheChairmanof theAuditCommittee isMr.ChaipatSahasakul,andtheother2membersareMr.SomphotKanchanapornandMr.ThanapichMulapruk.

TheAuditCommitteehasperformeditsdutiesinconformitywiththemissionentrustedbytheBoardofDirectorsasprescribedintheAuditCommitteeCharterwhichisincompliancewiththosespecifiedbyTheStockExchangeofThailand(SET):theAuditCommittee’sQualificationandScopeofDutiesandResponsibilitiesB.E.2551.TheAuditCommitteeregularlyreportstheCommittee’sMinutesofMeetingstotheBoardofDirectors.

TheAuditCommitteeheld17meetingsin2011withallcommitteemembersattendingeachmeeting.TheCommitteeMeetingAttendanceReportisshowninTable2:BoardandCommitteeMeetingAttendanceReportinCorporateGovernancesection.

TheAuditCommittee’sperformancecanbesummarizedasfollows.

1. Review of financial statements

• ToreviewthequarterlyandtheannualfinancialstatementswiththeexternalauditorsandtheManagementtoensurecompliance withthegenerallyacceptedaccountingprinciples.Thedisclosureswerecomplete,accurate,reliable,andincompliance withrelatedlawsandregulations.TheCommitteealsoconsideredtheadoptionofthenewaccountingstandards,thenew financialreportingstandards,thenewinterpretationandamendmentstoaccountingstandards,andtheadjustedaccounting standardsandaccountingframeworksrelatingtoEGCO.

• ToreviewtheManagementDiscussionandAnalysis(MD&A)withtheManagementtoensureitsaccuracy,adequacyand usefulnesstoshareholdersandinvestorsformakingtheirinvestmentdecisions.

• Toholdexclusivemeetingwiththeexternalauditorstoensuretheirindependence.

• Toconsiderotherservicesperformedbytheauditfirm’sgroupcompaniesforEGCOanditssubsidiaries.Itwasdetermined that the scopesofwork and fees for other serviceswerenot significant anddidnot influence the independenceof the auditor.

2. Review of the internal control systems

TheAuditCommitteereviewedthesufficiencyandeffectivenessoftheinternalcontrolsystemsbyconsideringtheinternalauditor’s andtheexternalauditor’sreports.Theexternalauditoragreedthattherewasnosignificantshortcomingintheyear2011.Inaddition, theCommitteeconsideredtheresultsoftheinternalcontrolevaluationofEGCOanditssubsidiariestogetherwiththeinternalcontrol questionnaireswhichwerepreparedincompliancewiththeCommitteeofSponsoringOrganizationsoftheTreadwayCommission’s (COSO)guidelines,TheStockExchangeofThailand(SET),andtheSecuritiesandExchangeCommission(SEC).Theevaluation resultfortheyear2011showedthatEGCOanditssubsidiarieshadsufficientandappropriateinternalcontrolsystem.

AuditCommittee’sReport

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3. Oversight of internal audit

• ToapprovescopeofworkandannualauditplanwhichincludedManagementAudit.

• ToreviewinternalauditreportbydemandingthattheInternalAuditDivisiondirectlyreportstotheAuditCommittee.

• ToreviewbudgetandmanpoweroftheInternalAuditDivision,theprofessionaldevelopmentofinternalauditors,andChief InternalAuditor’sKPI.TheCommitteealsoreviewedtheperformanceofChiefInternalAuditor’stoensuretheInternalAudit Division’sindependence.

4. Review of compliance with laws relating to EGCO’s business

TheAuditCommitteereviewedwiththeManagementtoensurethatEGCO’sactivitiesareincompliancewiththesecuritiesand exchangelaws,requirementsofSETandSEC,aswellasotherlawsrelatingtoEGCO’sbusiness.Inaddition,theCommittee acknowledgedthatemployeesatseniorvicepresident levelandupwardreviewedtheircompliancewithrelatedlawsbefore signingandsubmittingAnnualRepresentationLettertotheirimmediatesupervisors.

5. Review of connected transactions

TheAuditCommitteeconsideredtheaccuracyandadequacyofEGCO’sdisclosureonrelated-partytransactionsoranytransactions thatmightcauseconflictofinteresttoensurethatEGCOhadcompliedwithbusinessconditionsandrequirementsofSEC.

6. Review of risk management

TheAuditCommitteereviewedwiththeManagementtheriskmanagementpolicy,andthecompliancewithsuchpolicyandEGCO’s riskmanagementguidelines.Inaddition,fraudriskpreventionandmonitoringpracticeforEGCOGroupwaspreparedtoensure thatEGCOanditssubsidiarieshadanappropriateriskmanagementsystemthatfollowedtheCOSOEnterpriseRiskManagement. Thecurrentandfuturemajorriskshadbeenconsideredformitigationandmanagement.Additionalmeasuresweresetforrisk managementimprovementaswell.

7. Review of good corporate governance

• Toenhanceothergoodcorporategovernancepracticessuchasprovidingthechannelforemployeesandshareholdersto directtheircomplaints,suspectedviolationoflawsandCodeofConductandquestionsaboutthefinancialstatementsand internalcontrolsystemsbyemailtoauditcommittee@egco.com.Whistleblowersystemwasalsosetup.

• ToreviewandacknowledgetheCodeofConductComplianceStatementandGeneralRepresentationLettersubmittedby thePresidenttotheChairman.Theprocessofpreparingthosestatementsaswellastheircontentsprovidedtheassurances totheCommitteethatEGCO’soperationswereincompliancewiththeCodeofConductandtheinternalcontrolsystemsand thatthefinancialinformationanddisclosureswereaccurate,completeandreliable.

8. Audit Committee’s self assessment

TheAuditCommitteeassessed theAuditCommittee’sperformance for theyear2011bycompleting theAuditCommittee’s Self-AssessmentFormwhichcompliedwithSET’sregulationsandinternationalgoodpractice.Theresultofthisself-assessment was reported to theBoard ofDirectors. The 2011 assessment resultwas that the composition, qualifications, duties, and responsibilitiesoftheAuditCommitteewerestillinaccordancewiththeAuditCommitteeCharter,theStockExchangeofThailand’s guidelines,andtheinternationalgoodpractices.

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9. Review of the Audit Committee Charter

TheAuditCommitteereviewedtheAuditCommitteeChartertoensurethatthedutiesentrustedtothemin2011wereachieved andcompliedwithinternationalpracticesandthosespecifiedbytheSET’sAuditCommitteeBestPracticeGuidelines,whilealso beingappropriateforEGCO’sbusiness.

10. Appointment of the external auditor

TheCommitteereviewedtheauditors’performancein2011andrecommendedtotheBoardofDirectorsthatPricewaterhouse CoopersABASLtd.,Mr.SomchaiJinnovartCertifiedPublicAccountant(Thailand)No.3271,Mr.VichienKhingmontriCertified Public Accountant (Thailand)No. 3977,Mr. Chaisiri RuangritchaiCertified Public Accountant (Thailand)No. 4526, and Ms.AmornratPearmpoonvatanasukCertifiedPublicAccountant (Thailand)No. 4599,beappointedby the shareholders as theCompany’sauditorsfor2012duetotheirindependence,professionalpractices,appropriateexperience,SECapprovaland dischargingtheirdutieseffectively.

Basedontheabovepractices,theCommitteewasoftheopinionthatEGCO’s2011financialstatementwasaccurate,complete, andreliable.Theinternalcontrolsystemwasadequateandappropriate.OperationswereincompliancewiththeSecuritiesand ExchangeAct,regulationsofTheStockExchangeofThailandandlawsrelatingtothebusinessofEGCO.Inaddition,information disclosureincaseofrelated-partytransactionorconflictofinterestwascorrectandcomplete.

Mr.ChaipatSahasakulChairmanoftheAuditCommittee

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BasedonEGCO’sGovernancePrinciples,theNominationandRemunerationCommittee(NRC)shallconsistof5directors,threeofwhichshallbenon-executive,independentdirectors.ThetermofofficeofeachNRCmemberis3years.

In2011,theNRCdulyperformeditsdutiesundertheNominationandRemunerationCommittee’sCharterandheldtenmeetingsinsuchregard.Themajor issuesbeingdiscussedincludeddirectornominees,selectionofEGCOseniorexecutivesundertheneworganizationstructure,performanceappraisaloftheCompanyanditssubsidiariesincludingtheperformanceappraisalofdirectorsandmanagement,theremunerationofdirectorsandmanagementandthesuccessionplanforkeypositions.

Inscrutinizingthelistofnomineesfordirectorsandexecutives,theNRChadtakenintoaccounttherequiredskillsetsandexperience,integrityandethics,goodattitudetowardstheCompany,andprofessionalismalongwiththetimecommitment.

WithregardtotheremunerationstructureofthedirectorsandseniorexecutivesoftheCompany,theNRChadestablishedaclearandtransparentprocesstoensurethattheremunerationstructureofbothdirectorsandexecutiveswerecomparabletothoseofpeercompanies,effectiveinretainingqualifiedpersonnel,fairandtiedtothelongtermbenefitsoftheCompanyandtheshareholders.

Theguidelineforselectionofdirectorsandexecutivesalongwiththeirremunerationaredisclosedinthisannualreport.

Mr.HideakiTomikuChairmanoftheNominationandRemunerationCommittee

NominationandRemunerationCommittee’sReport

151

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To the Shareholders of Electricity Generating Public Company Limited

Ihaveauditedtheaccompanyingconsolidatedandcompanystatementsoffinancialpositionasat31December2011and2010andtherelatedconsolidatedandcompanystatementsofincome,comprehensiveincome,changesinshareholders’equityandcashflowsfortheyearsthenendedofElectricityGeneratingPublicCompanyLimitedanditssubsidiariesandofElectricityGeneratingPublicCompanyLimitedrespectively.TheCompany’smanagementisresponsibleforthecorrectnessandcompletenessofinformationinthesefinancialstatements.Myresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonmyaudits.

Iconductedmyauditsinaccordancewithgenerallyacceptedauditingstandards.ThosestandardsrequirethatIplanandperformanaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,ona testbasis,evidencesupporting theamountsanddisclosures in thefinancialstatements.Anauditalso includesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Ibelievethatmyauditsprovideareasonablebasisformyopinion.

Inmyopinion,theconsolidatedandcompanyfinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,theconsolidatedandcompanyfinancialpositionasat31December2011and2010andtheconsolidatedandcompanyresultsofoperationsandcashflowsfortheyearsthenendedofElectricityGeneratingPublicCompanyLimitedanditssubsidiariesandofElectricityGeneratingPublicCompanyLimitedrespectivelyinaccordancewithgenerallyacceptedaccountingprinciples.

Auditor’sReport

NangnoiCharoenthaveesubCertifiedPublicAccountant(Thailand)No.3044

PricewaterhouseCoopersABASLtd.

Bangkok17February2012

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Consolidated Company

2011 2010 2011 2010 Restated Restated Baht Baht Baht BahtNotes

Assets

Current assets Cashandcashequivalents 7 8,401,866,377 7,748,266,006 5,674,226,709 6,641,233,520Short-terminvestments 8 - Depositsatfinancialinstitutions 1,717,680,697 108,217,105 1,576,075,477 943,871 - Marketablesecurities 222,000,000 505,981,000 222,000,000 515,715,500Short-terminvestmentsusedascollateral 9 343,952,162 964,776,625 - -Tradereceivables 10 245,141,606 245,779,344 - -Tradereceivablefromarelatedparty 31(d) 549,230,689 544,949,244 202,016,743 219,944,810Dividendreceivablesfromsubsidiariesand jointventures 13.4 6,089,418,454 5,756,143,305 7,018,039,732 7,109,556,304Currentportionoflong-termloanstorelated parties 31(f) - - 45,882,350 45,882,350Amountsduefromrelatedparties 31(e) 51,081,780 59,997,506 22,779,474 19,576,599Fuelandsparepartsandsupplies,net 11 2,043,819,652 2,126,889,696 833,986,690 993,274,921Othercurrentassets 455,163,627 516,010,592 112,637,703 20,386,911Total current assets 20,119,355,044 18,577,010,423 15,707,644,878 15,566,514,786

Non-current assets Long-terminvestmentsinmarketablesecurities 12 1,937,293,740 2,074,097,214 1,930,947,778 2,071,097,214Amountsduefromarelatedpartydueover oneyear 31(e) 168,134,509 246,646,589 168,134,509 246,646,589Long-termloanstorelatedparties,net 31(f) - - 596,470,600 642,352,950Depositsatfinancialinstitutionsusedascollateral 282,300 282,300 - -Investmentsinsubsidiaries,net 13.2 - - 17,901,783,196 11,940,361,196Interestsinjointventures 13.3 36,444,572,866 30,711,750,853 23,150,309,238 22,874,309,238Otherlong-terminvestments 12 127,000,000 2,000,000 127,000,000 2,000,000Investmentproperty 14 322,071,012 322,071,012 322,071,012 322,071,012Property,plantandequipment,net 15 13,022,582,385 14,796,459,845 4,977,213,590 5,987,845,784Rightinlong-termpowerandtapwater purchaseagreementsandoperationand maintenanceagreement,net 16 685,946,459 175,339,183 - -Othernon-currentassets 17 128,834,166 134,757,515 11,779,387 11,527,548Total non-current assets 52,836,717,437 48,463,404,511 49,185,709,310 44,098,211,531

Total assets 72,956,072,481 67,040,414,934 64,893,354,188 59,664,726,317

Electricity Generating Public Company Limited

Statements of Financial Position As at 31 December 2011 and 2010

153

For Director ……………………………………………………………….

Thenotestotheconsolidatedandcompanyfinancialstatementsonpages163to215areanintegralpartofthesefinancialstatements.

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Electricity Generating Public Company Limited

Statements of Financial Position (continued) As at 31 December 2011 and 2010

Consolidated Company

2011 2010 2011 2010 Restated Restated Baht Baht Baht BahtNotes

Liabilities and shareholders’ equity

Current liabilities Tradepayables 253,078,447 232,804,758 27,636,013 20,798,381Tradepayabletoarelatedparty 31(d) 64,551,410 92,712,524 55,751,959 34,298,660Amountsduetorelatedparties 31(e) 9,701,695 11,845,750 4,458,738 6,311,636Currentportionoflong-termloansfrom financialinstitutions,net 18 535,728,282 223,697,707 289,380,906 -Debenturesduewithinoneyear 19 - 496,621,203 - -Othercurrentliabilities - Interestpayable 18,222,832 15,899,297 9,659,749 2,733,699 - Valueaddedtaxpayable 78,063,073 84,008,213 35,525,577 40,192,146 - Corporateincometaxpayable 35,810,629 113,015,320 - 11,105,901 - Others 720,905,424 540,140,230 286,883,840 270,834,863Total current liabilities 1,716,061,792 1,810,745,002 709,296,782 386,275,286

Non-current liabilities Long-termloansfromfinancialinstitutions,net 18 11,521,387,363 8,840,246,236 10,893,809,094 8,000,000,000Retirementbenefitobligations 20 199,408,660 180,533,136 91,767,927 82,159,491Provisionfordecommissioningcosts 21 972,895,496 874,279,974 386,414,269 370,839,030Othernon-currentliabilities 13,267,003 6,091,897 30,590,721 26,111,871Total non-current liabilities 12,706,958,522 9,901,151,243 11,402,582,011 8,479,110,392

Total liabilities 14,423,020,314 11,711,896,245 12,111,878,793 8,865,385,678

Thenotestotheconsolidatedandcompanyfinancialstatementsonpages163to215

areanintegralpartofthesefinancialstatements.

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Electricity Generating Public Company Limited

Statements of Financial Position (continued) As at 31 December 2011 and 2010

Consolidated Company

2011 2010 2011 2010 Restated Restated Baht Baht Baht BahtNotes

Liabilities and shareholders’ equity (continued)

Shareholders’ equity Sharecapital Authorisedsharecapital - 530,000,000ordinarysharesofBaht10 pershare 5,300,000,000 5,300,000,000 5,300,000,000 5,300,000,000 Issuedandpaid-upsharecapital - 526,465,000ordinarysharesofBaht10 pershare 5,264,650,000 5,264,650,000 5,264,650,000 5,264,650,000Premiumonsharecapital 8,601,300,000 8,601,300,000 8,601,300,000 8,601,300,000Premiumontreasurystock 47,373,035 47,373,035 47,373,035 47,373,035Retainedearnings Appropriated - Legalreserve 22 530,000,000 530,000,000 530,000,000 530,000,000 Unappropriated 42,681,867,762 40,455,123,354 37,274,695,405 35,142,994,510Othercomponentsofequity 852,834,463 (79,022,179) 1,063,456,955 1,213,023,094

Total equity attributable to the parent company 57,978,025,260 54,819,424,210 52,781,475,395 50,799,340,639Non-controllinginterests 23 555,026,907 509,094,479 - -

Total shareholders’ equity 58,533,052,167 55,328,518,689 52,781,475,395 50,799,340,639

Total liabilities and shareholders’ equity 72,956,072,481 67,040,414,934 64,893,354,188 59,664,726,317

Thenotestotheconsolidatedandcompanyfinancialstatementsonpages163to215

areanintegralpartofthesefinancialstatements.

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Electricity Generating Public Company Limited

Income Statements For the years ended 31 December 2011 and 2010

Consolidated Company

2011 2010 2011 2010 Restated Restated Baht Baht Baht BahtNotes

Salesandserviceincome 31(a),(b) 7,661,035,192 8,608,979,776 2,258,324,928 2,535,275,542Costofsalesandservices 31(c) (5,588,768,660) (5,678,455,725) (1,806,013,523) (1,531,846,798)

Gross profit 2,072,266,532 2,930,524,051 452,311,405 1,003,428,744Otherincome 24 449,118,661 386,196,878 5,892,735,667 6,697,157,118Currencyexchangegains(losses) 21,978,720 (55,762,049) 7,412,030 (24,030,414)Administrativeexpenses 31(h),(i) (1,678,317,514) (1,433,135,581) (921,361,651) (983,884,749)Financecosts 26 (694,204,857) (563,981,872) (536,606,508) (380,741,909)Shareofprofitfrominterestsinjointventures,net 13 5,199,684,409 6,109,227,948 - -

Profit before corporate income tax 5,370,525,951 7,373,069,375 4,894,490,943 6,311,928,790Corporateincometax (254,702,346) (455,179,284) - (142,951,141)

Net profit for the year 5,115,823,605 6,917,890,091 4,894,490,943 6,168,977,649

Attributable to : Ownersoftheparent 4,989,534,456 6,802,559,659 4,894,490,943 6,168,977,649Non-controllinginterests 126,289,149 115,330,432 - -

Net profit for the year 5,115,823,605 6,917,890,091 4,894,490,943 6,168,977,649

Earnings per share for the year 27 Basicearningspershare 9.48 12.92 9.30 11.72Dilutedearningspershare 9.48 12.92 9.30 11.72

Thenotestotheconsolidatedandcompanyfinancialstatementsonpages163to215

areanintegralpartofthesefinancialstatements.

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Electricity Generating Public Company Limited

Statements of Comprehensive Income For the years ended 31 December 2011 and 2010

Consolidated Company

2011 2010 2011 2010 Restated Restated Baht Baht Baht Baht

Net profit for the year 5,115,823,605 6,917,890,091 4,894,490,943 6,168,977,649

Other comprehensive income Unrealisedgains(losses)oninvestmentsinmarketable securities-available-for-sale (146,130,436) 664,398,097 (149,566,139) 657,060,271Translationadjustments 1,077,987,078 (957,799,151) - -

Other comprehensive income (expenses) for the year 931,856,642 (293,401,054) (149,566,139) 657,060,271

Total comprehensive income for the year 6,047,680,247 6,624,489,037 4,744,924,804 6,826,037,920

Total comprehensive income attributable to : Ownersoftheparent 5,921,391,098 6,509,158,605 4,744,924,804 6,826,037,920Non-controllinginterests 126,289,149 115,330,432 - -

6,047,680,247 6,624,489,037 4,744,924,804 6,826,037,920

Thenotestotheconsolidatedandcompanyfinancialstatementsonpages163to215

areanintegralpartofthesefinancialstatements.

157

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

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159

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Page 162: Electricity Generating : Annual Report 2011

Electricity Generating Public Company Limited

Statements of Cash Flows For the years ended 31 December 2011 and 2010

Consolidated Company

2011 2010 2011 2010 Restated Restated Baht Baht Baht BahtNotes

Cash flows from operating activities Profitbeforecorporateincometaxfortheyear 5,370,525,951 7,373,069,375 4,894,490,943 6,311,928,790Adjustmentstoreconcileprofitbeforecorporate incometaxtonetcashprovidedbyoperations: - Depreciationandamortisation 1,972,553,321 2,175,204,520 1,053,132,812 1,076,811,397 - Allowanceforobsolescence 217,216,514 247,138,340 121,740,689 135,970,288 - Retirementbenefitexpenses 20 25,988,046 22,299,447 10,310,096 10,889,865 - Interestincome (176,396,514) (87,946,201) (189,063,659) (111,140,429) - Interestexpenses 466,647,642 569,080,001 380,541,269 365,794,461 - Provisionfordecommissioningcosts 50,892,632 35,239,692 15,575,239 14,947,448 - Unrealisedcurrencyexchange(gains) losses 163,988,568 (17,655,469) 140,490,000 - - Lossesfromwrite-offanddisposalofspare partsandsupplies 68,627 106,583,177 68,627 106,583,177 - Lossesfromdisposalsofequipment 1,481,885 49,741 101,091 49,741 - Gainondisposalsofequipment (1,476,528) (3,450,742) (170,865) (4,697,184) - Gainsfromdissolutionofasubsidiary - - (6,982,607) (330,000,000) - Gainondisposalsofmarketablesecurities - (4,812,935) - (4,812,935) -Dividendsreceivedfromothercompany (115,233,980) (118,348,412) (115,233,980) (118,348,412) - Dividendsreceivedfromsubsidiariesand jointventures 13.4 - - (5,364,452,040) (5,906,465,803) - Shareofprofitfrominterestsin jointventures,net 13 (5,199,684,409) (6,109,227,948) - -

Cashflowsbeforechangesinoperatingassets andliabilities 2,776,571,755 4,187,222,586 940,547,615 1,547,510,404Changesinoperatingassetsandliabilities: (excludingtheeffectsofacquisitionof subsidiaries) - Othercurrentassets (56,747,588) (380,946,787) (69,231,794) (128,243,728) - Othernon-currentassets 77,353,857 (13,780,021) 78,512,080 (14,141,579) - Short-termandlong-terminvestments usedascollateral 620,824,463 (467,955,680) - - - Tradereceivablesandtradereceivable fromarelatedparty (3,360,613) 667,664,575 17,928,067 444,653,496

Thenotestotheconsolidatedandcompanyfinancialstatementsonpages163to215

areanintegralpartofthesefinancialstatements.

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Page 163: Electricity Generating : Annual Report 2011

Electricity Generating Public Company Limited

Statements of Cash Flows (continued) For the years ended 31 December 2011 and 2010

Consolidated Company

2011 2010 2011 2010 Restated Restated Baht Baht Baht BahtNotes

- Amountsduefromrelatedparties 8,946,332 838,569 (3,225,854) 8,229,493 - Sparepartsandsupplies (117,590,329) (7,526,810) 28,693,005 (43,277,518) - Tradepayablesandtradepayableto arelatedparty (7,911,130) 32,697,764 28,290,932 7,209,194 -Amountsduetorelatedparties (4,062,337) (19,181,726) (1,852,898) (21,200,903) - Retirementbenefitpaid (7,112,522) (6,968,516) (701,660) (3,995,690) - Othercurrentliabilities (68,134,980) 10,743,722 231,501 29,466,466 - Othernon-currentliabilities 1,162,381 (5,197,140) 1,153,981 (2,212,609)

Cashgeneratedfromoperations 3,219,939,289 3,997,610,536 1,020,344,975 1,823,997,026 - Interestreceived 152,419,869 95,589,690 166,871,516 117,129,117 - Taxpaid (171,659,875) (71,942,173) (9,657,280) -

Net cash receipts from operating activities 3,200,699,283 4,021,258,053 1,177,559,211 1,941,126,143

Cash flows from investing activities Investmentsinsubsidiariesandinterestsinjoint ventures,netofcashandcashequivalents transferredaspartofacquisition 13 (6,570,001,495) (2,650,733,492) (6,237,422,000) (2,622,957,206)Cashreceivedfromajointventureforreturn ofcapital 13 - 3,521,667 - 3,521,667Cashreceivedfromdissolutionofasubsidiriary andajointventure 13 - 24,047,071 6,982,607 354,047,071Netcashreceiptsfrom(paymentsin)short-term investments (1,489,463,592) 47,338,009 (1,448,832,809) 84,636,476Netcashreceiptsfromshort-terminvestments usedascollateral - 450,000,000 - 450,000,000Netcashpaymentsfromlong-terminvestments 156,075,075 - 158,000,000 -Acquisitionofotherlong-terminvestments (125,000,000) - (125,000,000) -Netcashpaymentsinpurchasesofequipment (76,474,101) (90,212,402) (21,302,557) (23,590,046)Proceedfromloanstorelatedparties 31(f) - 32,000,000 45,882,350 77,882,350Dividendsreceivedfromsubsidiariesand jointventures 13.4 6,403,252,203 4,536,948,586 5,455,968,612 4,920,419,170Dividendsreceivedfromothercompany 115,233,980 118,348,412 115,233,980 118,348,412

Net cash receipts from (payment in) investing activities (1,586,377,930) 2,471,257,851 (2,050,489,817) 3,362,307,894

Thenotestotheconsolidatedandcompanyfinancialstatementsonpages163to215

areanintegralpartofthesefinancialstatements.

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Page 164: Electricity Generating : Annual Report 2011

Electricity Generating Public Company Limited

Statements of Cash Flows (continued) For the years ended 31 December 2011 and 2010

Consolidated Company

2011 2010 2011 2010 Restated Restated Baht Baht Baht BahtNotes

Cash flows from financing activities Paymentsonfinanceleases (3,257,977) (2,303,178) (1,062,724) -Interestspaid (460,923,941) (576,525,347) (373,477,533) (365,794,461)Proceedsfromlong-termloansfromfinancial institutions 3,042,700,000 - 3,042,700,000 -Paymentsonlong-termloansfromfinancial institutionsanddebentures (724,073,518) (1,121,751,334) - - Dividendspaidtoshareholders 28 (2,844,842,618) (2,855,935,925) (2,762,235,948) (2,762,599,106)

Net cash payment in financing activities (990,398,054) (4,556,515,784) (94,076,205) (3,128,393,567)

Net increase (decrease) in cash and cash equivalents 623,923,299 1,936,000,120 (967,006,811) 2,175,040,470Beginningbalance 7,748,266,006 5,854,559,912 6,641,233,520 4,466,193,050Effectofexchangeratechanges 29,677,072 (42,294,026) - -

Endingbalance 8,401,866,377 7,748,266,006 5,674,226,709 6,641,233,520

Cash and cash equivalents are made up as follows : - Cashinhandanddepositsatfinancial institutions-maturitieswithinthreemonths 2,539,090,823 2,669,712,841 339,646,491 1,740,221,779 - Short-terminvestmentsinpromissory notes-maturitieswithinthreemonths 5,862,775,554 5,078,553,165 5,334,580,218 4,901,011,741

8,401,866,377 7,748,266,006 5,674,226,709 6,641,233,520

Non-cash transactions - Purchasesoffixedassetsbyfinancelease liabilities 27,512,619 - 3,998,070 - - Reclassificationofutilisedcapitalspare partstoproperty,plantandequipment 15 242,058,511 718,446,962 141,847,753 219,764,097 - Reclassificationofunutilisedcapitalspare partsfromproperty,plantandequipment 15 (258,683,278) (262,927,304) (133,061,844) (102,140,231) - Increaseinproperty,plantandequipment byotherpayables 10,877,070 - 8,344,308 -

Thenotestotheconsolidatedandcompanyfinancialstatementsonpages163to215

areanintegralpartofthesefinancialstatements.

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

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Page 165: Electricity Generating : Annual Report 2011

Electricity Generating Public Company Limited

Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2011 and 2010

1 General information ElectricityGeneratingPublicCompanyLimited(“theCompany”)isapubliclimitedcompanyincorporatedandresidentinThailand. Theaddressof itsregisteredoffice is222Moo5,EGCOTower,14thand15thfloor,VibhavadiRangsitRoad,Tungsonghong, Laksi,Bangkok10210.

TheCompanyislistedontheStockExchangeofThailand.Forreportingpurposes,theCompanyanditssubsidiariesarereferred toas“theGroup”.

TheprincipalbusinessoperationoftheGroupisthegenerationofelectricityforsaletothegovernmentsectorandindustrialusers.

Theseconsolidatedandcompanyfinancialstatementswereauthorisedforissuebythepresidenton17February2012.

2 Accounting policies Theprincipalaccountingpoliciesappliedinthepreparationoftheseconsolidatedandcompanyfinancialstatementsaresetoutbelow.

2.1 Basis of preparation

Theconsolidatedandcompany financial statementshavebeenprepared inaccordancewithThaigenerallyaccepted accounting principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the AccountingProfessionActB.E.2547,andthefinancialreportingrequirementsoftheSecuritiesandExchangeCommission undertheSecuritiesandExchangeAct.

Theconsolidatedandcompanyfinancialstatementshavebeenpreparedunderthehistoricalcostconventionexceptas disclosedintheaccountingpoliciesbelow.

ThepreparationoffinancialstatementsinconformitywithThaigenerallyacceptedaccountingprinciplesrequirestheuse ofcertaincriticalaccountingestimates.Italsorequiresmanagementtoexerciseitsjudgementintheprocessofapplying theGroup’saccountingpoliciesandtodisclosetheareasinvolvingahigherdegreeofjudgementorcomplexity,orareas whereassumptionsandestimatesaresignificanttothefinancialstatementsasdisclosedinNote3.

AnEnglishversionoftheconsolidatedandcompanyfinancialstatementshasbeenpreparedfromthestatutoryfinancial statementsthatareintheThailanguage.Intheeventofaconflictoradifferenceininterpretationbetweenthetwolanguages, theThailanguagestatutoryfinancialstatementsshallprevail.

2.2 Newaccountingstandards,newfinancialreportingstandards,newinterpretationandamendmentstoaccountingstandards (collectively “the accounting standards”)

2.2.1 The accounting standards being effective for the accounting periods beginning on or after 1 January 2011

TAS1(Revised2009) PresentationofFinancialStatements

TAS2(Revised2009) Inventories

TAS7(Revised2009) StatementofCashFlows

TAS8(Revised2009) AccountingPolicies,ChangesinAccountingEstimatesandErrors

TAS10(Revised2009) EventsaftertheReportingPeriod

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2 Accounting policies (continued)

2.2 New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards (collectively “the accounting standards”) (continued)

2.2.1 The accounting standards being effective for the accounting periods beginning on or after 1 January 2011 (continued)

TAS11(Revised2009) ConstructionContracts

TAS16(Revised2009) Property,PlantandEquipment

TAS17(Revised2009) Leases

TAS18(Revised2009) Revenue

TAS19 EmployeeBenefits

TAS23(Revised2009) BorrowingCosts

TAS24(Revised2009) RelatedPartyDisclosures

TAS26 AccountingandReportingbyRetirementBenefitPlans

TAS27(Revised2009) ConsolidatedandSeparateFinancialStatements

TAS28(Revised2009) InvestmentsinAssociates

TAS29 FinancialReportinginHyperinflationaryEconomies

TAS31(Revised2009) InterestsinJointVentures

TAS33(Revised2009) EarningsperShare

TAS34(Revised2009) InterimFinancialReporting

TAS36(Revised2009) ImpairmentofAssets

TAS37(Revised2009) Provisions,ContingentLiabilitiesandContingentAssets

TAS38(Revised2009) IntangibleAssets

TAS40(Revised2009) InvestmentProperty

TFRS2 Share-basePayment

TFRS3(Revised2009) BusinessCombinations

TFRS5(Revised2009) Non-currentAssetsHeldforSaleandDiscontinuedOperations

TFRS6 ExplorationforandEvaluationofMineralResources

TFRIC15 AgreementsfortheConstructionofRealEstate

TSIC31 Revenue-BarterTransactionsinvolvingAdvertisingServices

Commencing1January2011,theGrouphasappliedtheaforementionedaccountingstandards.Theapplication ofthoseaccountingstandardsdoesnothavesignificantimpacttothefinancialstatementsbeingpresentedexcept TAS16(revised2009)“Property,PlantandEquipment”andTAS40“InvestmentProperty”.

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2 Accounting policies (continued)

2.2 New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards (collectively “the accounting standards”) (continued)

2.2.1 The accounting standards being effective for the accounting periods beginning on or after 1 January 2011 (continued)

TheGrouphasretrospectivelyappliedTAS16(revised2009)“Property,PlantandEquipment” inrespectof the estimationofresidualvaluesoffixedassetsandrelateddecommissioningcostsandTAS40“InvestmentProperty”. Theimpactofthechangesontheconsolidatedandcompanystatementsoffinancialpositionasat31December2010 andtheconsolidatedandcompanyincomestatementsfortheyearended31December2010isasfollows.However, therestatementdoesnothaveanyimpactstotaxandothercomprehensiveincome.

Consolidated Company

Baht’000 Baht’000 Increase(decrease) Increase(decrease)

Statements of financial position as at 31 December 2010

-Interestsinjointventures (3,368) -

- Investmentproperty 322,071 322,071

- Property,plantandequipment,net 1,389,181 864,353

- Othernon-currentassets (322,071) (322,071)

-Provisionfordecommissioningcosts 874,280 370,839

-Retainedearningsasat1January2010 501,215 466,657

- Retainedearningsasat31December2010 511,533 493,514

Income statements for the year ended 31 December 2010

- Costofsales (58,482) (41,804)

-Financialcosts 35,240 14,947

-Shareofprofitsfrominterestsinjointventures,net (12,924) -

-Netprofitfortheperiod 10,318 26,857

-Basicanddilutedearningspershare(Baht) 0.02 0.05

Consolidated Company

Baht’000 Baht’000 Increase(decrease) Increase(decrease)

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2 Accounting policies (continued)

2.2 New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards (collectively “the accounting standards”) (continued)

2.2.2 The accounting standards being effective for the accounting periods beginning on or after 1 January 2013

TAS12 IncomeTaxes

TAS20(Revised2009) AccountingforGovernmentGrantsandDisclosureofGovernment Assistance

TAS21(Revised2009) TheEffectsofChangesinForeignExchangeRates

TSIC10 GovernmentAssistance-NoSpecificRelationtoOperating Activities

TSIC21 IncomeTaxes-RecoveryofRevaluedNon-DepreciableAssets

TSIC25 IncomeTaxes-ChangesintheTaxStatusofanEntityorits Shareholders

TheGrouphasnotearlyadoptedtheaforementionedaccountingstandardsandtheGroup’smanagementisintheprocess ofreviewingtheimpactsofthoseaccountingstandards.Howeversignificantchangesinaccountingstandardsrelevant totheGrouparesummarisedasbelow.

• TAS12prescribedtheaccountingtreatmentforincometaxes,comprisingcurrenttaxanddeferredtax.Current taxassetsand liabilitiesaremeasuredat theamountexpected tobepaid toor recovered from the taxation authorities, using tax rates and tax law that have been enacted or substantively enacted by the end of the reportingperiod.Deferredtaxesaremeasuredbasedonthetemporarydifferencebetweenthetaxbaseofan assetor liabilityanditscarryingamount inthefinancialstatementsandusingthetaxratesthatareexpected toapplytotheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxratesandtaxlawthathave beenenactedorsubstantivelyenactedbytheendofthereportingperiod.

• TAS21(Revised2009)requiredeachindividualentitytodetermineitsfunctionalcurrencywhichisacurrencyof theprimaryeconomicenvironmentinwhichtheentityoperates.Foreigncurrencytransactionsarerequiredto betranslatedintothefunctionalcurrencyusingtheexchangeratesprevailingatthedatesofthetransaction. Foreignexchangegainsandlossesresultingfromthesettlementofsuchtransactionsandfromtranslationat year-endexchange rateofmonetary itemsdenominated in foreigncurrencyare recognised inprofitor loss. Inaddition,theresultsandfinancialpositionofallthegroupentitiesthathaveafunctionalcurrencydifferencefrom thepresentationcurrencyaretranslatedinthepresentationcurrencyby(a)assetsandliabilitiesaretranslated at theclosing rateat thedateof thatstatementof financialposition (b) incomeandexpensesare translated atexchangerateatthedateofthetransactionsand(c)allresultingexchangedifferencesarerecognisedinother comprehensiveincome.

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2 Accounting policies (continued) 2.3 Group accounting - investments in subsidiaries and interests in joint ventures

2.3.1 Investments in subsidiaries

Subsidiariesareallentities(includingspecialpurposeentities)overwhichtheGrouphasthepowertogovernthe financialandoperatingpoliciesgenerallyaccompanyingashareholdingofmorethanone-halfofthevotingrights. Theexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhen assessingwhethertheGroupcontrolsanotherentity.Subsidiariesarefullyconsolidatedfromthedateonwhich controlistransferredtotheGroup.Theyarede-consolidatedfromthedatethatcontrolceases.

TheGroupuses theacquisitionmethodofaccounting toaccount forbusinesscombinations.Theconsideration transferredfortheacquisitionofasubsidiaryisthefairvalueoftheassetstransferred,theliabilitiesincurredand theequityinterestsissuedbytheGroup.Theconsiderationtransferredincludesthefairvalueofanyassetorliability resultingfromacontingentconsiderationarrangement.Acquisition-relatedcostsareexpensedasincurred.Identifiable assetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationaremeasuredinitially attheirfairvaluesattheacquisitiondate.Onanacquisition-by-acquisitionbasis,theGrouprecognisesanynon- controllinginterestintheacquireeeitheratfairvalueoratthenon-controllinginterest’sproportionateshareofthe acquiree’snetassets.

The excess of the consideration transferred the amount of any non-controlling interest in the acquiree and the acquisition-datefairvalueofanypreviousequityinterestintheacquireeoverthefairvalueoftheGroup’sshareof theidentifiablenetassetsacquiredisrecordedasgoodwill.Ifthisislessthanthefairvalueofthenetassetsofthe subsidiary acquired in the case of a bargain purchase, the difference is recognised directly to the income statements.

Intercompanytransactions,balancesandunrealisedgainsorlossontransactionsbetweengroupcompaniesare eliminated.Unrealisedlossesarealsoeliminatedbutconsideredanimpairmentindicatoroftheassettransferred. AccountingpoliciesofsubsidiarieshavebeenchangedtoensureconsistencywiththepoliciesadoptedbytheGroup.

Inthecompanyfinancialstatements,investmentsinsubsidiariesareaccountedforusingthecostmethodofaccounting. Underthecostmethod,incomefrominvestmentsinsubsidiarieswillberecordedwhendividendsaredeclared. Costisadjustedtoreflectchangesinconsiderationarisingfromcontingentconsiderationamendments.Costalso includesdirectattributablecostsofinvestment.

Atestforimpairmentforinvestmentsinsubsidiariesiscarriedoutwhenthereisafactorindicatingthatinvestments mightbeimpaired.Ifthecarryingvalueoftheinvestmentsishigherthanitsrecoverableamount,impairmentlossis chargedtotheincomestatements.

AlistoftheGroup’ssubsidiariesandthefinancialeffectsoftheacquisitionsanddisposalsofsubsidiariesareshown inNote13.

2.3.2 Transactions and non-controlling interests

TheGrouptreatstransactionswithnon-controllinginterestsastransactionswithequityownersoftheGroup.For changesinaparent’sownershipinterestinasubsidiarythatdonotresultinalossofcontrol,thedifferencebetweenany considerationpaid/receivedandtherelevantshareacquired/disposedof thecarryingvalueofnetassetsof the subsidiary isrecordedinshareholders’equity.Gainsor lossesondisposalstonon-controllinginterestsarealso recordedinshareholders’equity.

167

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Page 170: Electricity Generating : Annual Report 2011

2 Accounting policies (continued) 2.3 Group accounting - investments in subsidiaries and interests in joint ventures (continued)

2.3.2 Transactions and non-controlling interests (continued)

WhentheGroupceasestohavecontrol,anyretainedinterestintheformersubsidiaryisre-measuredatitsfairvalue,with thechangeincarryingamountrecognisedinincomestatements.Thefairvalueistheinitialcarryingamountforthepurposes ofsubsequentlyaccountingfortheretainedinterest.Inaddition,anyamountspreviouslyrecognisedinstatementsof comprehensiveincomeinrespectoftheformersubsidiaryareaccountedforintheincomestatementsasiftheGrouphad directlydisposedoftherelatedassetsorliabilities.

2.3.3 Interests in joint ventures

TheGroup’sinterestsinjointlycontrolledentitiesareaccountedforusingtheequitymethodofaccountinginthe consolidatedfinancialstatements.Undertheequitymethod,theinterestsinjointventuresareinitiallyrecognisedat costwhichincludesgoodwillidentifiedonacquisition,netofanyaccumulatedimpairmentloss(ifany).TheGroup’s shareofitsjointventures’post-acquisitionprofitsorlossesisrecognisedintheconsolidatedincomestatements,and itsshareofpost-acquisitionmovements incomprehensive incomeisrecognised in theconsolidatedstatements ofcomprehensiveincome.Thecumulativepost-acquisitionmovementsareadjustedagainstthecarryingamountof theinterestsinjointventures.WhentheGroup’sshareoflossesinjointventuresequalsorexceedsitsinterestsin jointventures,theGroupdoesnotrecognisefurtherlosses,unlessithasincurredobligationsormadepaymentson behalfofthejointventures.

UnrealisedgainsontransactionsbetweentheGroupanditsjointventuresareeliminatedtotheextentoftheGroup’s interestinthejointventures.Unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceofan impairmentoftheassettransferred.Accountingpoliciesofjointventureshavebeenchangedtoensureconsistency withthepoliciesadoptedbytheGroup.

Inthecompanyfinancialstatements,interestsinjointventuresareaccountedforusingthecostmethodofaccounting. Underthecostmethod,incomefrominterestsinjointventureswillberecordedwhendividendsaredeclared.

Atestforimpairmentforinterestsinjointventuresiscarriedoutwhenthereisafactorindicatingthatinvestments mightbeimpaired.Ifthecarryingvalueoftheinvestmentsishigherthanitsrecoverableamount,impairmentlossis chargedtotheincomestatements.

AlistoftheGroup’sjointventuresandthefinancialeffectsoftheacquisitionsanddisposalsofjointventuresare showninNote13.

2.4 Foreign currency translation

ItemsincludedinthefinancialstatementsofeachentityintheGrouparemeasuredusingthereportingcurrencyofthat entity.TheconsolidatedfinancialstatementsarepresentedinThaiBaht.

ForeigncurrencytransactionsaretranslatedintoThaiBahtusingtheexchangeratesprevailingatthedateofthetransaction. Monetary assets and liabilities denominated in foreign currencies are translated into Thai Baht at the exchange rate prevailingattheendofthereportingperiod.Gainsandlossesresultingfromthesettlementofforeigncurrencytransactionsand from the translationofmonetaryassetsand liabilitiesdenominated in foreigncurrenciesare recognised in the income statements.

Incomestatementsandstatementsofcomprehensive incomeandcash flowsof foreignentitiesare translated into the Group’sreportingcurrencyattheweightedaverageexchangeratesfortheyearandstatementsoffinancialpositionare translatedattheexchangeratesprevailingontheendofthereportingperiod.Currencytranslationdifferencesarisingfrom theretranslationofthenetinvestmentinforeignentitiesaretakentoshareholders’equity.Ondisposalofaforeignentity, accumulatedcurrencytranslationdifferencesarerecognisedintheincomestatementsaspartofthegainorlossondisposal offoreignentities.

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2 Accounting policies (continued) 2.5 Financial instruments

Financialassetscarriedinthestatementoffinancialpositionincludecashandcashequivalents,investments,tradereceivables andtradereceivablesfromarelatedparty.Financialliabilitiescarriedinthestatementoffinancialpositionincludetrade payables,tradepayablestoarelatedparty,loansanddebentures.Theparticularrecognitionmethodsadoptedaredisclosed intheindividualpolicystatementsassociatedwitheachitem.

TheGroupisalsoapartytofinancialinstrumentsthatreduceexposuretofluctuationsininterestrates.Theseinstruments arenotrecognisedintheconsolidatedandcompanyfinancialstatementsoninception.

InterestrateswapcontractsprotecttheGroupfrommovementsininterestrates.Anydifferentialtobepaidorreceivedon theinterestrateswapcontractsisrecognisedasacomponentoffinancecostsasincurred.

DisclosuresaboutfinancialinstrumentstowhichtheGroupisapartyareprovidedinNote30.

2.6 Cash and cash equivalents

Cashandcashequivalentsarecarriedinthestatementoffinancialpositionatcost.Cashandcashequivalentscomprise cashinhand,depositsheldatfinancialinstitutionsandshort-termhighlyliquidinvestmentswithmaturitiesofthreemonths orlessfromthedateofacquisition.

2.7 Trade receivables

Tradereceivablesarerecognisedinitiallyatoriginalinvoiceamountandsubsequentlymeasuredattheremainingamount lessallowancefordoubtfulreceivablesbasedonareviewofalloutstandingamountsattheyearend.Theamountofthe allowanceisthedifferencebetweenthecarryingamountandtheamountexpectedtobecollectible.Baddebtsarerecognised totheincomestatementsaspartofadministrativeexpenses.

2.8 Spare parts and supplies

Sparepartsandsuppliesarestatedatcostlessallowanceforobsolescence.Costiscalculatedonthemovingaverage basis.Thesparepartsarecategorisedas“specificspareparts”and“commonspareparts”.Specificsparepartsareclassified intotwocategories,whicharecapitalsparepartsusedforspecificplantequipmentinpowerplantsandspecificspareparts usedforgeneraluse.

Theallowanceforspecificsparepartsiscalculatedbydividingthebalanceofspecificsparepartsonhandattheyearend bythenumberofyearsremainingunderthePowerPurchaseAgreementswiththeElectricityGeneratingAuthorityofThailand (EGAT),exceptforcapitalsparepartsthatareusedforspecificplantequipmentinpowerplants(Note2.11).

Theallowanceforcommonsparepartsisgenerallyprovidedbasedonanaginganalysis.

2.9 Other investments

Investmentsother than investments insubsidiariesand interests in joint venturesareclassified into the following three categories:held-to-maturity,available-for-saleandgeneral investments.Theclassification isdependentonthepurpose forwhichtheinvestmentswereacquired.Managementdeterminestheappropriateclassificationofitsinvestmentsatthe timeofthepurchaseandre-evaluatessuchdesignationonaregularbasis.

• Investmentswithfixedmaturitythatthemanagementhastheintentandabilitytoholdtomaturityareclassifiedasheld-to- maturityandareincludedinnon-currentassets,exceptthosewithmaturitieswithin12monthsfromtheendofthereporting period,whichareclassifiedascurrentassets.

• Investmentsintendedtobeheldforanindefiniteperiodoftime,whichmaybesoldinresponsetoliquidityneedsorchanges in interest rates,areclassifiedasavailable-for-sale,andare included innon-currentassetsunlessmanagementhas expressedtheintentionofholdingtheinvestmentforlessthan12monthsfromtheendofthereportingperiodorunless theywillneedtobesoldtoraiseoperatingcapital,inwhichcasetheyareincludedincurrentassets.

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2 Accounting policies (continued) 2.9 Other investments (continued)

• Investmentsinnon-marketableequitysecuritiesareclassifiedasgeneralinvestments.

Allcategoriesof investmentsare initially recognisedatcostwhich isequal to the fairvalueofconsiderationpaidplus transactioncosts.

Held-to-maturityinvestmentsarecarriedatamortisedcostusingtheeffectiveyieldmethodlessimpairmentloss.

Available-for-saleinvestmentsaresubsequentlycarriedatfairvalue.Unrealisedgainsandlossesarisingfromchangesin thefairvalueofinvestmentsclassifiedasavailable-for-salearerecognisedinthestatementsofcomprehensiveincome.The fairvalueofinvestmentsisbasedonthequotedbidpricebyreferencetotheStockExchangeofThailandandtheThai BondDealingCentre.Wheninvestmentsclassifiedasavailable-for-salearesoldorimpaired,theaccumulatedfairvalue adjustmentsareincludedintheincomestatementsasgainsandlossesfrominvestmentinsecurities.

Generalinvestmentsarecarriedatcostlessimpairment.

Atestforimpairmentiscarriedoutwhenthereisafactorindicatingthataninvestmentmightbeimpaired.Ifthecarrying valueoftheinvestmentishigherthanitsrecoverableamount,impairmentlossischargedtotheincomestatements.

Ondisposalofaninvestment,thedifferencebetweenthenetdisposalproceedsandthecarryingamountischargedorcredited to the income statements. When disposing of part of the Group’s holding of a particular investment in debt or equity securities,thecarryingamountofthedisposedpartisdeterminedbytheweightedaveragecarryingamountofthetotal holdingoftheinvestment.

2.10 Investment property

Propertythatisheldforlong-termrentalorforcapitalappreciationorboth,andthatisnotoccupiedbythecompaniesin theGroup,isclassifiedasinvestmentproperty.Investmentpropertyalsoincludespropertythat isbeingconstructedor developedforfutureuseasinvestmentpropertyorlandheldforacurrentlyundeterminedfutureuse.Investmentproperty oftheGroupislandheldforacurrentlyundeterminedfutureuse.TheGrouphasnotdeterminedthatitwillusethelandas owner-occupiedpropertyorascapitalappreciation.

Investmentpropertyismeasuredinitiallyatitscostincludingrelatedtransactioncosts.Subsequently,theinvestmentproperty iscarriedatcostlessaccumulatedimpairmentlosses(ifany).

Subsequentexpenditureiscapitalisedtotheasset’scarryingamountonlywhenitisprobablethatfutureeconomicbenefits associatedwiththeexpenditurewillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.Allotherrepairand maintenancecostsareexpensedwhenincurred.

2.11 Property, plant and equipment

Allproperty,plantandequipmentareinitiallyrecordedatcost.Subsequentlyallplantandequipmentarestatedathistorical costlessaccumulateddepreciationandimpairment(ifany).Thecostsofproperty,plantandequipmentcompriseboththe purchasepriceandanycostsdirectlyattributabletobringingtheassetstolocationandconditionnecessaryforthemtobe capableofoperatinginthemannerintendedbymanagement.Theircostsalsoincludetheinitialestimateofthecostsof dismantlingandremovingtheitemandrestoringthesiteonwhichtheyarelocated,theobligationforwhichtheGroupincurs eitherwhentheitemsareacquiredorasaconsequenceofhavingusedtheitemsduringaparticularperiod.

Depreciationiscalculatedusingthestraight-linemethodtowriteoffthecostofeachassettoitsresidualvalueoverits estimatedusefullife,exceptlandwhichisconsideredtohaveanindefinitelife,asfollows:

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2 Accounting policies (continued) 2.11 Property, plant and equipment (continued)

Years

Powerplants 15,18,20and21

Waterplantsandtransmissionpipeline 30

Buildingsandstructures 10and20

Substationandtransmissionsystem 20and21

Operatingandmaintenanceequipment 5

Officeequipment,furnitureandcomputers 3,5and10

Motorvehicles 5

Theassets’residualvaluesandusefullivesarereviewedandadjustedifappropriate,attheendofeachreportingperiod.

Capitalsparepartswhoseestimatedusefullifeismorethanoneyeararecapitalisedanddepreciatedusingthestraight-line methodovertheestimatedusefullifeofbetween6and12yearswhenusedinmajorrepairandmaintenanceprocesses. Thecapitalsparepartswhicharereplacedbyamajoroverhaulwillberemovedandrecordedassparepartsandsupplies atthenetbookvalueatthedateofreplacement.Allotherrepairsandmaintenancearechargedtotheincomestatements duringthefinancialperiodinwhichtheyareincurred.

Wherethecarryingamountofassetisgreaterthanitsestimatedrecoverableamount,itiswrittendownimmediatelytoits recoverableamount.

Gainsandlossesondisposalsofassetsaredeterminedbycomparingproceedswiththecarryingamountandarerecognised within“Othergainsorlosses,net”intheincomestatements.

Borrowingcoststhataredirectlyattributabletotheacquisitionorconstructionofaqualifyingassetarecapitalisedaspart ofthecostofthatasset,duringtheperiodoftimerequiredtocompleteandpreparetheassetforitsintendeduse.Allother borrowingcostsarerecognisedasexpensesintheincomestatements.

2.12 Goodwill

GoodwillrepresentstheexcessofthecostofanacquisitionoverthefairvalueoftheGroup’sshareofthenetassetsof theacquiredsubsidiaryundertakingorjointventureatthedateofacquisition.Goodwillonacquisitionsofsubsidiariesisseparately reportedandofjointventuresisincludedininterestsinjointventuresintheconsolidatedstatementoffinancialposition.

Recognisedgoodwillistestedannuallyforimpairmentandcarriedatcostlessaccumulatedimpairmentlosses.Impairment lossesongoodwillarenotreversed.Gainsandlossesonthedisposalofasubsidiaryorajointventureincludethecarrying amountofgoodwillrelatingtotheentitysold.

Goodwillisallocatedtocashgeneratingunitsforthepurposeofimpairmenttesting.Theallocationismadetothosecash generatingunitsorgroupofcashgeneratingunitsthatareexpectedtobenefitfromthebusinesscombinationinwhichthe goodwillarose.

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2 Accounting policies (continued) 2.13 Intangible assets

2.13.1 Right in Power Purchase Agreement and Tap Water Purchase Agreement

TherightinPowerPurchaseandTapWaterPurchaseAgreementsarisingonacquisitionsoftheGroupisamortised overtheperiodsofthePowerPurchaseAgreementswiththeElectricityGeneratingAuthorityofThailand(EGAT)and oftheWaterSupplyAgreementwiththeProvincialWaterworksAuthority(PWA),whicharebetween16and25years.

2.13.2 Development expenditure

Developmentexpenditureisrecognisedasanexpenseasincurred.Costsincurredondevelopmentprojectsare recognisedasintangibleassetswhenitisprobablethattheprojectwillbeasuccessconsideringitscommercialand technologicalfeasibility,andonlyifthecostcanbemeasuredreliably.Otherdevelopmentexpenditureisrecognisedas anexpenseasincurred.Developmentexpenditurepreviouslyrecognisedasanexpenseisnotrecognisedasanasset inasubsequentperiod.Developmentexpenditurethathasbeencapitalisedisamortisedfromthecommencement ofthecommercialoperationonastraight-linebasisoverthepowerplants’life.

2.14 Impairment of assets

Assetsthathaveanindefiniteusefullife,forexamplegoodwill,arenotsubjecttoamortisationandaretestedannuallyfor impairment.Assetsand intangibleassets thathavedefiniteuseful lifeare reviewed for impairmentwhenevereventsor changesincircumstancesindicatethatthecarryingamountmaynotberecoverable.Animpairmentlossisrecognisedfor theamountbywhichthecarryingamountoftheassetsexceedsitsrecoverableamountwhichisthehigherofanasset’sfair valuelesscoststosellandvalueinuse.Forthepurposesofassessingimpairment,assetsaregroupedatthelowestlevel forwhichthereareseparatelyidentifiablecashflows.Assetsotherthangoodwillthatsufferedimpairmentarereviewedfor possiblereversaloftheimpairmentateachreportingdate.

2.15 Leases where a Group is the lessee

Leasesofassetswhichsubstantiallytransferalltherisksandrewardsofownershipareclassifiedasfinanceleases.Finance leasesarecapitalisedattheinceptionoftheleaseatthelowerofthefairvalueoftheleasedpropertyorthepresentvalue oftheminimumleasepayments.Eachleasepaymentisallocatedtotheprincipalandtothefinancechargessoastoachieve aconstantrateonthefinancebalanceoutstanding.Theoutstandingrentalobligations,netoffinancecosts,areincluded inotherlong-termpayables.Theinterestelementofthefinancecostischargedtotheincomestatementsoverthelease period.Theassetacquiredunderfinanceleaseisdepreciatedovertheshorteroftheusefullifeoftheassetortheleaseterm.

Leases inwhichasignificantportionof therisksandrewardsofownershipareretainedby the lessorareclassifiedas operatingleases.Paymentsmadeunderoperatingleases(netofanyincentivesreceivedfromthelessor)arechargedto theincomestatementsonastraight-linebasisovertheperiodofthelease.

2.16 Borrowings

Borrowingsarerecognisedinitiallyatthefairvalueoftheproceedsreceived,netofthetransactioncostsincurred.Borrowings aresubsequentlystatedatamortisedcostusingtheeffectiveyieldmethod;anydifferencebetweentheproceeds(netof transactioncosts)andtheredemptionvalueisrecognisedtotheincomestatementsovertheperiodoftheborrowings.

Feespaidontheestablishmentofloanfacilitiesarerecognisedastransactioncostsoftheloantotheextentthatitisprobable thatsomeorallofthefacilitywillbedrawndown.Inthiscase,thefeeisdeferreduntilthedraw-downoccurs.Totheextent thereisnoevidencethatitisprobablethatsomeorallofthefacilitywillbedrawndown,thefeeiscapitalisedasapre- paymentforliquidityservicesandamortisedovertheperiodofthefacilitytowhichitrelates.

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2 Accounting policies (continued) 2.17 Corporate income taxes

TheGroupcalculatesincometaxesinaccordancewiththeRevenueCodeonanaccrualbasis.TheGroupdoesnotrecognise incometaxespayableorreceivableinfutureperiodsinrespectoftemporarydifferencesarisingfromdifferencesbetween thetaxbaseofassetsandliabilitiesandtheircarryingamounts.

2.18 Employee benefits

TheGrouphaspost-employmentbenefits consistingofbothdefinedbenefit anddefinedcontributionplans.Adefined contributionplanisapensionplanunderwhichtheGrouppaysfixedcontributionsintoaseparateentity.TheGrouphasno legalorconstructiveobligationstopayfurthercontributionsifthefunddoesnotholdsufficientassetstopayallemployees thebenefitsrelatingtoemployeeserviceinthecurrentandpriorperiods.Adefinedbenefitplanisapensionplanthatis notadefinedcontributionplan.Typicallydefinedbenefitplansdefineanamountofpensionbenefitthatanemployeewill receive on retirement, usually dependent on one or more factors such as age of employee, years of service and compensation.

2.18.1Definedbenefitplan-retirementbenefit

TheGroupprovidesforpostemploymentbenefits,payabletoemployeesunderthelabourlawsapplicableinThailand andothercountriesinwhichtheGrouphasitsoperations.Theliabilityinrespectofemployeebenefitsisthepresent valueofthedefinedbenefitobligationwhichiscalculatedbyanindependentactuaryinaccordancewiththeactuarial technique.Thepresentvalueofthedefinedbenefitobligationisdeterminedbydiscountingestimatedfuturecash flowsusingyieldsongovernmentbondswhichhavetermstomaturityapproximatingthetermsoftherelatedliability. Theestimatedfuturecashflowsshallreflectemployeesalaries,turnoverrate,mortality,lengthofserviceandother factors.Actuarialgainsorlosseswillberecognisedintheincomestatementsintheperiodtowhichtheyrelate.The costsassociatedwithprovidingthesebenefitsarechargedtotheincomestatementssoastospreadthecostover theemploymentperiodduringwhichtheentitlementtobenefitsisearned.

2.18.2Definedcontributionplan-providentfund

TheGroupoperatesaprovidentfundthatisadefinedcontributionplan.Theassetsareheldinaseparatefund whichismanagedbyanexternalfundmanagerinaccordancewiththeProvidentFundActB.E.2530.Theprovident fundisfundedbypaymentsfromemployeesandbytheGroup.Contributionstotheprovidentfundarechargedto theincomestatementsintheyeartowhichtheyrelate.

2.19 Provisions

2.19.1 General provisions

ProvisionsarerecognisedwhentheGrouphasapresentlegalorconstructiveobligationasaresultofpastevents, itisprobablethatanoutflowofresourceswillberequiredtosettletheobligation,andareliableestimateoftheamount canbemade.WheretheGroupexpectsaprovisiontobereimbursed,thereimbursementisrecognisedasaseparate asset,butonlywhenthereimbursementisvirtuallycertain.

2.19.2 Provision for decommissioning costs

TheGrouprecognisesprovisionfordecommissioningcosts,whichareprovidedattheonsetofcompletionofthe project,fortheestimateoftheeventualcoststhatrelatetotheremovalofthepowerandwaterplants.Therecognised provisionfordecommissioningcostsisbasedonfutureremovalcostestimatesandincorporatemanyassumptions suchasabandonmenttimesandfutureinflationrateanddiscountedtopresentvalueatthediscountrateestimated bythemanagement.Thosecostsareincludedaspartofthepowerandwaterplants.

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2 Accounting policies (continued) 2.20 Treasury stock

Treasurystockpresentedintheconsolidatedandcompanyfinancialstatementsiscarriedatcostandshownasadeduction fromtotalshareholders’equity.Gainsondisposaloftreasurystockaredeterminedbyreferencetoitscarryingamountand aretakento“Premiumontreasurystock”.Lossesondisposaloftreasurystockaredeterminedbyreferencetoitscarrying amountandaretakento“Premiumontreasurystock”and“Retainedearnings”consecutively.

2.21 Revenue recognition

Salesunder thePowerPurchaseAgreements (PPA)compriseAvailabilityPaymentsandEnergyPayments.Availability PaymentsarerecognisedaccordingtothetermssetoutinthePowerPurchaseAgreement.EnergyPaymentsarecalculated basedonelectricitydelivered.SalesundertheElectricityandSteamSales/PurchaseAgreementswithindustrialusersare recognisedondeliveryofelectricityandsteamandcustomeracceptance.However,underthePPAsoftwosubsidiaries, EGAThastobearthenaturalgascost,therefore,thecalculationofrevenuesfromtheportionofenergysalesofelectricity andthenaturalgascostofthosetwosubsidiariesarenotincludedinthesefinancialstatements.

Revenuefromconstructionservicesisrecognisedusingthepercentageofcompletionmethod.Thestageofcompletionis measuredbyreferencetotherelationshipthatthecontractcostsincurredforworkperformedtodatebeartotheestimated totalcostsforthecontract.Revenuefromotherservicesisrecognisedwhentheserviceshavebeenrenderedinaccordance withthetermsoftheagreementsorinvoiceshavebeenissued.

Interestincomeisrecognisedonanaccrualbasisunlesscollectabilityisindoubt.

Dividendincomeisrecognisedwhentheshareholder’srighttoreceivepaymentisestablished.

2.22 Dividends

Dividendsarerecordedintheconsolidatedandcompanyfinancialstatementsintheperiodinwhichtheyareapprovedby theshareholdersandtheBoardofDirectors.

3 Critical accounting estimates, assumptions and judgements Accountingestimates,assumptionsandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandother factors,includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.During2011,the significantaccountingestimatesoftheGroupareasfollows:

3.1 Useful life of power plants and water treatment plant

TheGroupdeterminestheestimatedusefullivesofpowerplantsandthewatertreatmentplantbasedontheperiodsofthe PowerPurchaseAgreementsandWaterPurchaseAgreement.

3.2 Provision for decommissioning costs

TheGroupmakesestimatesandassumptionsconcerningthefutureinrelationtoprovisionfordecommissioningcostsof powerandwaterplants.TheGrouprecognisesprovision fordecommissioningcostsofpowerandwaterplants,which areprovidedattheonsetofcompletionoftheproject,fortheestimateoftheeventualcoststhatrelatetotheremovalof the power and water plants. The recognised provision for decommissioning costs is based on future removal cost estimateswhicharebynaturecomplicatedprocessesandincorporatemanyassumptionssuchasabandonmenttimes andfutureinflationrate.

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3 Critical accounting estimates, assumptions and judgements (continued) 3.3 Revenue recognition from construction services

Revenuerecognitionunderconstructionandservicescontractsisbasedonthestageofcompletionofacontractmeasured byapplyingthecost-to-costbasistocontractualrevenues.Useofthestageofcompletionmethodrequiresestimatesof futuregrossprofitonacontractbycontractbasis.Thefuturegrossprofitrepresentstheprofitremainingafterdeducting thecostsattributabletothecontractfromtherevenuesprovidedforinthecontract.Theestimateoffuturegrossprofitis basedonacomplexestimationprocess that includes identificationof risksandanyassessment that it isnecessary to estimatewithsufficientprecisionthetotalfuturecostsaswellastheexpectedtimetable.

4 Capital risk management TheGroup’sobjectiveswhenmanagingcapitalaretosafeguardtheGroup’sabilitytocontinueasagoingconcerninorderto providereturnsforshareholdersandbenefitsforotherstakeholdersandtomaintainanoptimalcapitalstructuretoreducethe costofcapital.

Inordertomaintainoradjustthecapitalstructure,alternativepracticesincludereturningcapitaltoshareholders,issuingnew sharesorsellingassetstoreducedebt.

5 Statements of cash flows Changesinshort-termandlong-terminvestmentsusedascollateralareincludedinthestatementsofcashflowsascashflows fromoperatingactivitiesbecauseproceedsfromsalesofelectricitymustbemaintainedasshort-termandlong-terminvestments usedascollateralinaccordancewiththeMasterAgreementsandloanagreementsanddebentures,asdescribedinNote9.

6 Segment information - consolidated financial statements Financial information by business operation segment

Thebusinessof theGroup is thegenerationofelectricityandtapwater forsale togovernmentand industrialusers,both in Thailandandoverseas, includingprovidingmaintenanceservicesandoperatingpowerplant.TheGroupdoesnotdisclose segmentinformationforpipedwaterandtheprovisionofmaintenanceservicesandpowerplantoperationsbecauserevenues fromthosetwobusinesssegmentswereequivalentto3.51%and8.72%oftotalrevenuefromsalesandservices,respectively (2010:3.01%and6.35%oftotalrevenuesfromsalesandservices,respectively).

Financial information by geographical segment

Fortheyearended31December2011

TheLaos People’sDemocratic The Thailand Republic Philippines Consolidated Baht Baht Baht Baht

Revenuefromsalesandserviceincome 7,462,281,941 - 198,753,251 7,661,035,192Costofsalesandservices (5,467,533,568) - (121,235,092) (5,588,768,660)Segmentresults 1,994,748,373 - 77,518,159 2,072,266,532Otherincome 448,260,100 - 858,561 449,118,661Currencyexchangegains 21,809,250 - 169,470 21,978,720Administrativeexpenses (1,353,124,105) - (325,193,409) (1,678,317,514)

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6 Segment information - consolidated financial statements (continued) Financial information by geographical segment (continued)

Financecosts (694,204,857) - - (694,204,857)Shareofprofitfrominterestsinjointventures,net 3,656,993,634 1,045,620,255 497,070,520 5,199,684,409Profitbeforecorporateincometax 4,074,482,395 1,045,620,255 250,423,301 5,370,525,951Corporateincometax (237,738,101) - (16,964,245) (254,702,346)Netprofitfortheyear 3,836,744,294 1,045,620,255 233,459,056 5,115,823,605

Ownersoftheparent 3,710,455,145 1,045,620,255 233,459,056 4,989,534,456Non-controllinginterests 126,289,149 - - 126,289,149

Property,plantandequipment,net 13,022,582,385 - - 13,022,582,385

Fortheyearended31December2010(Restated)

Revenuefromsalesandserviceincome 8,608,979,776 - - 8,608,979,776Costofsalesandservices (5,678,455,725) - - (5,678,455,725)Segmentresults 2,930,524,051 - - 2,930,524,051Otherincome 386,196,878 - - 386,196,878Currencyexchangelosses (55,762,049) - - (55,762,049)Administrativeexpenses (1,433,135,581) - - (1,433,135,581)Financecosts (563,981,872) - - (563,981,872)Shareofprofitfrominterestsinjointventures,net 5,279,615,208 107,269,990 722,342,750 6,109,227,948Profitbeforecorporateincometax 6,543,456,635 107,269,990 722,342,750 7,373,069,375Corporateincometax (455,179,284) - - (455,179,284)Netprofitfortheyear 6,088,277,351 107,269,990 722,342,750 6,917,890,091

Ownersoftheparent 5,972,946,919 107,269,990 722,342,750 6,802,559,659Non-controllinginterests 115,330,432 - - 115,330,432

Property,plantandequipment,net 14,796,459,845 - - 14,796,459,845

Fortheyearended31December2011

TheLaos People’sDemocratic The Thailand Republic Philippines Consolidated Baht Baht Baht Baht

TheLaos People’sDemocratic The Thailand Republic Philippines Consolidated Baht Baht Baht Baht

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7 Cash and cash equivalents Asat31December2011,cashandcashequivalentsmainlycomprisedinvestmentsinpromissorynoteswithmaturitiesofthree monthsorless.Theinterestrateswere0.25%to4.00%perannum(2010:0.13%to2.00%perannum).

8 Short-term investments Short-terminvestmentscompriseddepositsatfinancialinstitutionswithmaturitiesoverthreemonthsbutnotlaterthanoneyear andmarketablesecurities.

Deposits at financial institutions

ThedepositsatfinancialinstitutionsoftheGroupmainlycomprisedepositsatfinancialinstitutionsandpromissorynotesissued bylocalfinancialinstitutions.Asat31December2011,depositsatfinancialinstitutionsboreinterestatratesfrom1.60%to4.35% perannum(2010:interestatratesfrom0.75%to1.60%perannum).

Marketable securities

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

Available-for-saleDebtsecurities - 500,000,000 - 506,298,797Changesinfairvalueofinvestments - 5,981,000 - 9,416,703 - 505,981,000 - 515,715,500Held-to-maturityDebtsecurities 222,000,000 - 222,000,000 -Short-terminvestmentsinmarketablesecurities 222,000,000 505,981,000 222,000,000 515,715,500

9 Short-term and long-term investments used as collateral Themajorityofthedepositsatfinancialinstitutionsusedascollateralarethoseoftwosubsidiaries:EGCOCogenerationCompany LimitedandRoi-EtGreenCompanyLimited(Asat31December2010,wereofthreesubsidiaries-EGCOCogenerationCompany Limited,Roi-EtGreenCompanyLimitedandKhanomElectricityGeneratingCompanyLimited).Theycomprisecashreserves requiredtobemaintainedundertheirloananddebentureagreementsforthepurposeofrepaymentofprincipalandpaymentof interestduewithinoneyearandasareservetominimiseexchangeraterisk.Thesecashreservesareprovidedfromtheproceeds ofsalesofelectricity.

Duringthesecondquarterof2011,KhanomElectricityGeneratingCompanyLimitedwhichisasubsidiarysettledthewholeamount oftheoutstandingdebentures.Thus,itsdepositsatfinancialinstitutionsusedascollateralwerenilasat31December2011.

As at 31December 2011, theGrouphadThaiBaht deposits at financial institutions usedas collateral ofBaht 344million bearinginterestattheratesof0.50%to4.25%perannum(2010:Baht965millionbearinginterestattheratesof0.50%to2.00%). Theseincludedthecashreserveforthepurposeofrepaymentofprincipalandpaymentofinterestduewithinoneyearofthese twosubsidiariesamountedtoBaht142million(2010:Baht224million)andtheremainingbalanceofBaht202million(2010:Baht 741million)representedcollateraliseddepositsmaintainedinaccordancewiththeloanagreementsbutwhichcouldbeused subjecttocertainlenderapprovals.

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10 Trade receivables, net

Tradereceivables 245,141,606 245,779,344 - -LessAllowancefordoubtfulreceivables - - - -Tradereceivables,net 245,141,606 245,779,344 - -

Outstandingtradereceivablesasat31Decembercanbeanalysedasfollows:

Notoverdue 159,014,689 135,331,854 - -Overduebelow3months 20,759,550 109,625,108 - -Overdue3-6months 22,742 491,907 - -Overdue6-12months 5,843,921 - - -Overdueover12months 59,500,704 330,475 - - 245,141,606 245,779,344 - -LessAllowancefordoubtfulreceivables - - - -Tradereceivables,net 245,141,606 245,779,344 - -

11 Fuel and spare parts and supplies, net

Fuel 390,791,496 394,772,788 193,856,784 196,059,782Specificspareparts - Capitalsparepartsusedforspecificequipment ofthepowerplant 735,815,839 578,376,062 266,946,425 249,832,046 - Otherspecificspareparts 1,810,084,793 1,830,821,206 897,729,306 953,986,316Commonspareparts 43,405,407 42,668,003 9,373,502 6,671,817Sparepartsintransit 1,096,402 409,408 1,096,402 - 2,981,193,937 2,847,047,467 1,369,002,419 1,406,549,961LessAllowanceforobsolescence (937,374,285) (720,157,771) (535,015,729) (413,275,040)

Fuelandsparepartsandsupplies,net 2,043,819,652 2,126,889,696 833,986,690 993,274,921

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

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12 Long-term investments in marketable securities and other long-term investments

Available-for-saleDebtsecurities 6,345,962 3,000,000 - -Equitysecurities 867,490,823 867,490,823 867,490,823 867,490,823Changesinfairvalueofinvestments 1,063,456,955 1,203,606,391 1,063,456,955 1,203,606,391Totallong-terminvestmentsinmarketablesecurities 1,937,293,740 2,074,097,214 1,930,947,778 2,071,097,214

Otherlong-terminvestmentsOtherequitysecurities 127,000,000 2,000,000 127,000,000 2,000,000Totalotherinvestments 127,000,000 2,000,000 127,000,000 2,000,000Totallong-terminvestmentsinmarketablesecurities andotherlong-terminvestments 2,064,293,740 2,076,097,214 2,057,947,778 2,073,097,214

Otherlong-terminvestments

As at 31 December 2011, other long-term investment mainly represented an investment Xayaburi Power Company Limited (XPCL)amountingtoBaht125million.On1March2011,theCompanyacquireda12.5%shareholdinginterestinXPCLfora totalconsiderationofBaht100millioninordertobecomeajointdeveloperoftheXayaburihydropowerproject.XPCLwasawarded aconcessionagreementbythegovernmentoftheLaosPeople’sDemocraticRepublic(LaosPDR)todesign,develop,construct andimplementarun-of-the-riverdampowerprojectwithaninstalledcapacityof1,285MWfor29yearsafterthecommercial operationdate.On20April2011, the investmentcommitteeapproved thepaymentofXPCLfor theadditionalsharesat the proportionoftheCompany’soriginalinvestment,totallingBaht25million.TheCompanypaidfortheadditionalordinaryshares already.

13 Investments in subsidiaries and interests in joint ventures, net

Investmentsinsubsidiaries - - 17,949,603,196 11,988,181,196LessImpairment - - (47,820,000) (47,820,000)Investmentsinsubsidiaries,net(Note13.2) - - 17,901,783,196 11,940,361,196Investmentsinjointventures(Note13.3) 36,444,572,866 30,711,750,853 23,150,309,238 22,874,309,238Totalinvestmentsinsubsidiariesandinterests injointventures,net 36,444,572,866 30,711,750,853 41,052,092,434 34,814,670,434

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

Consolidated Company

2011 2010 2011 2010 Restated Baht Baht Baht Baht

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.1 Themovementsininvestmentsinsubsidiariesandinterestsinjointventurescanbeanalysedasfollows:

Consolidated

2011 2010 Baht Baht

Openingnetbookvalue - Aspreviouslyreported 30,715,119,040 28,529,156,466 - Effectfromchangeinaccountingpolicy(Note2.2.1) (3,368,187) 9,555,476 - Asrestated 30,711,750,853 28,538,711,942Shareofprofitfrominterestsinjointventures,net 5,199,684,409 6,109,227,949Increaseinsharecapitalofjointventures(Note13.3) 276,000,000 2,457,316,292Returnofsharecapitalfromajointventure - (27,568,738)Transferofnetliabilitiestointerestsinajointventure - 162,090,086Dividendsreceivedfromjointventures(Note13.4) (6,736,527,352) (5,537,914,927)Acquisitionofinterestinajointventure(Note13.1(a)) 5,938,404,518 -Translationadjustments 1,055,260,438 (990,111,750)Closingnetbookvalue 36,444,572,866 30,711,750,853

Company

Openingnetbookvalue 34,814,670,434 32,219,281,966Acquisitionofasubsidiaryandinterestsinajointventure 5,961,422,000 -Increaseinsharecapitalofjointventures(Note13.3) 276,000,000 2,622,316,291Returnofsharecapitalfromajointventure - (27,568,738)Investmentinanewsubsidiary - 640,915Closingnetbookvalue 41,052,092,434 34,814,670,434

(a) Principalmovementsininvestmentsinasubsidiaryandinterestsinajointventureduringtheyearended31December 2011

Quezon Power (Philippines), Limited Co. (QPL) andPearl Energy Philippines Operating, Inc. (PEPOI) (formerly namedCovantaPhilippinesOperating,Inc.(CPOI)

On13December2010,theGroupenteredintoadefinitiveagreementtoacquire100%oftheordinarysharesofOgden Power Development Cayman Inc (OPDCI), which held a 26.125% interest in Quezon Power (Philippines), Limited Co. (QPL), and in Pearl Energy Philippines Operating, Inc (PEPOI) from Covanta Energy International InvestmentsLtd.(CEILL).TheconsiderationwasUSDollars215million,whichisequivalenttoBaht6,529million. TheCompanypaidUSDollars196.2milliontoEGCOInternational(B.V.I)Limited(asubsidiaryoftheGroup)which thenpaidthisamountandtheremainingUSDollars19milliontoCEILL.

2011 2010 Baht Baht

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.1 Themovementsininvestmentsinsubsidiariesandinterestsinjointventurescanbeanalysedasfollows:(continued)

(a) Principalmovementsininvestmentsinasubsidiaryandinterestsinajointventureduringtheyearended31December 2011(continued)

Quezon Power (Philippines), LimitedCo. (QPL) andPearl Energy Philippines Operating, Inc. (PEPOI) (formerly namedCovantaPhilippinesOperating,Inc.(CPOI) (continued)

TheacquisitionofallofthetotalordinarysharesofOPDCIincreasedtheGroup’sshareholdinginQPL,ajointventure oftheGroup,from26%to52.125%.Themanagementstructureremainsunchanged.TheGroupalsohas100% ownershipinPEPOI,whichisengagedintheprovisionofoperationandmaintenanceservicestoQPLthrougha long-termOperationandMaintenanceAgreement.Theacquisitionwascompletedon25March2011.

Underthetermsandconditionsofthedefinitiveagreement,apurchasepriceadjustmentwasrequiredtobemade afterthetransferoftheshares.Asaresult,inApril2011theGrouppaidCEILLanadditionalamountofUSDollars 0.58million,whichisequivalenttoBaht17million.Therefore,thetotalconsiderationwasUSDollars215.58million, whichisequivalenttoBaht6,547million.

DetailsofthenetacquiredassetsofQPLandPEPOIasat25March2011areasfollows:

Consolidated

JointventureQPL SubsidiaryPEPOI Total Baht’000 Baht’000 Baht’000

Property,plantandequipment,net 5,708,359 - 5,708,359Loansfromfinancialinstitution,net (2,383,555) - (2,383,555)Otherassetslessotherliabilities 956,854 53,438 1,010,292Netassets 4,281,658 53,438 4,335,096Rightinlong-termpowerpurchaseagreement (presentsunderinterestsinjointventures) 1,656,746 - 1,656,746Rightinlong-termoperationandmaintenanceagreement - 555,102 555,102Totalpurchaseconsideration 5,938,404 608,540 6,546,944LessCashtransferredaspartofsubsidiaryacquisition - (252,943) (252,943)Investmentsinsubsidiariesandinterestsinjointventures,netofcash andcashequivalentstransferredaspartofacquisition 5,938,404 355,597 6,294,001

Therightsinthelong-termpowerpurchaseagreementandthelong-termoperationandmaintenanceagreement areamortisedovertheremainingperiodsoftherespectiveagreements.

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.2 Investmentsinsubsidiaries,net

Thedetailoftheinvestmentsinsubsidiariesareasfollows:

2011

Paid-up Portionof Cost sharecapital Investment Method Dividend Business Baht’000 (%) Baht’000 Baht’000

(Including indirectholding)

Subsidiaries incorporated in Thailand KhanomElectricityGeneratingCo.,Ltd. Electricitygeneration 4,850,000 99.99 4,850,000 307,208EGCOEngineeringandServiceCo.,Ltd. Powerplantoperationand 400,000 99.99 400,000 68,000 anditssubsidiaries maintenanceservices -AgroEnergyCo.,Ltd. Trading/delivery 99.99 ofnaturalscrap -EgcomTaraCo.,Ltd. Tapwaterbusiness 74.19EGCOGreenEnergyCo.,Ltd. Investmentinbiomass 175,000 74.00 129,500 71,040 anditssubsidiary fueledelectricity generationplant -Roi-EtGreenCo.,Ltd. Huskfueledelectricity 95.00 generationplantEGCOCogenerationCo.,Ltd. Electricitygeneration 1,060,000 80.00 891,894 80,000Totalinvestmentinsubsidiariesincorporated inThailand 6,271,394 526,248

Company

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.2 Investmentsinsubsidiaries,net(continued)

Thedetailoftheinvestmentsinsubsidiariesareasfollows:(continued)

Subsidiary incorporated in overseas NorthPoleInvestmentCompanyLimited Investmentinenergy 11,731,443 100.00 11,678,209 -(incorporatedintheRepublicofMauritius) relatedbusinessanditssubsidiariesandjointventures - EGCOInternational(B.V.I.)Limited Investmentinenergy 5,865,560 100.00 (incorporatedinBritishVirginIslands) relatedbusiness anditssubsidiariesandjointventures Subsidiaries - NewGrowthCooperatiefU.A Investmentinenergy 6,532,609 100.00 (incorporatedinNetherlands) relatedbusiness anditssubsidiaryandjointventure - NewGrowthB.V. Investmentinenergy 6,527,138 100.00 (incorporatedinNetherlands) relatedbusiness anditssubsidiariesandjointventures - PearlEnergyPhilippinesOperating,Inc. Powerplantoperation 6,085 100.00 (PEPOI)(registeredunderthelaws andmaintenance ofCaymanIslands,operatedinthe services Philippines) Jointventures - QuezonPower(Philippines),LimitedCo. Electricitygeneration 7,340,472 52.125 (QPL)(incorporatedinthePhilippines) - ConalHoldingsCorporation(Conal) Investmentinpower 729,320 40.00 (incorporatedinthePhilippines) projects

Totalinvestmentinsubsidiariesincorporated inoverseas 11,678,209 -

Totalinvestmentinsubsidiaries 17,949,603 526,248LessImpairment (47,820) -

Investmentsinsubsidiaries,net 17,901,783 526,248

Asat31December2011,dividendsreceivablefromsubsidiariesamountingtoBaht929millionwererecognisedinthecompany financialstatements.

Paid-up Portionof Cost sharecapital Investment Method Dividend Business Baht’000 (%) Baht Baht’000

(Including indirectholding)

2011(continued)

Company(continued)

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.2 Investmentsinsubsidiaries,net(continued)

Thedetailoftheinvestmentsinsubsidiariesareasfollows:(continued)

2010

Subsidiaries incorporated in Thailand KhanomElectricityGeneratingCo.,Ltd. Electricitygeneration 4,850,000 99.99 4,850,000 474,715EGCOEngineeringandServiceCo.,Ltd. Powerplantoperationand 400,000 99.99 400,000 142,365 anditssubsidiaries maintenanceservices -AgroEnergyCo.,Ltd. Trading/delivery 99.99 ofnaturalscrap -EgcomTaraCo.,Ltd. Tapwaterbusiness 74.19EGCOGreenEnergyCo.,Ltd. Investmentinbiomass 175,000 74.00 129,500 94,720 anditssubsidiary fueledelectricity generationplant -Roi-EtGreenCo.,Ltd. Huskfueledelectricity 95.00 generationplantEGCOCogenerationCo.,Ltd. Electricitygeneration 1,060,000 80.00 891,894 160,000

Totalinvestmentinsubsidiariesincorporated inThailand 6,271,394 871,800

Company

Paid-up Portionof Cost sharecapital Investment Method Dividend Business Baht’000 (%) Baht’000 Baht’000

(Including indirectholding)

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.2 Investmentsinsubsidiaries,net(continued)

Thedetailoftheinvestmentsinsubsidiariesareasfollows:(continued)

Subsidiary incorporated in overseas

NorthPoleInvestmentCompanyLimited Investmentinenergy 5,770,026 100.00 5,716,787 -

(incorporatedintheRepublicofMauritius) relatedbusiness

anditssubsidiariesandjointventures

- EGCOInternational(B.V.I.)Limited Investmentinenergy 12,569 100.00

(incorporatedinBritishVirginIslands) relatedbusiness

- NewGrowthCooperatiefU.A Investmentinenergy 2,169 100.00

(incorporatedinNetherlands) relatedbusiness

- NewGrowthB.V. Investmentinenergy 1,094 100.00

(incorporatedinNetherlands) relatedbusiness

- ConalHoldingsCorporation(Conal) Investmentinpower 729,320 40.00

(incorporatedinthePhilippines) projects

- QuezonPower(Philippines),LimitedCo. Electricitygeneration 7,340,472 26.00

(QPL)(incorporatedinthePhilippines)

Totalinvestmentinsubsidiariesincorporated

inoverseas 5,716,787 -

Totalinvestmentinsubsidiaries 11,988,181 871,800

LessImpairment (47,820) -

Investmentsinsubsidiaries,net 11,940,361 871,800

As at 31 December 2010, dividends receivable from subsidiaries amounting to Baht 1,353 million were recognised inthecompanyfinancialstatements.

2010(continued)

Company(continued)

Paid-up Portionof Cost sharecapital Investment Method Dividend Business Baht’000 (%) Baht’000 Baht’000

(Including indirectholding)

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.3 Interestsinjointventures

Thedetailoftheinterestsinjointventuresareasfollows:

2011

Joint ventures incorporated in Thailand

GulfElectricPublicCo.,Ltd. Investmentinpower 50.00 6,672,769 11,979,777 1,530,063

(GEC)anditssubsidiaries project

BLCPPowerLtd.(BLCP) Electricitygeneration 50.00 10,433,597 10,147,541 1,933,275

NaturalEnergyDevelopmentCo.,Ltd. Developmentofrenewable 33.33 474,000 412,188 -

(NED) energyproject

Joint ventures incorporated in the Philippines

ConalHoldingsCorporation(Conal) Investmentinpower 40.00 954,647 890,381 106,810

anditssubsidiaries project

QuezonPower(Philippines),LimitedCo.(QPL) Electricitygeneration 52.125 10,754,275 9,622,420 1,791,514

Joint venture incorporated in the Lao

People’s Democratic Republic

NamTheun2PowerCompanyLimited(NTPC) Electricitygeneration 35.00 5,569,943 3,392,266 1,374,866

Totalinterestsinjointventures 34,859,231 36,444,573 6,736,528

Consolidated

As at 31 December 2011, dividends receivable from joint ventures amounting to Baht 6,089 million were recognised intheconsolidatedfinancialstatements.

Portionof Cost Equity Investment Method Method Dividend Business (%) Baht’000 Baht’000 Baht’000

(Including indirectholding)

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.3 Interestsinjointventures(continued)

Thedetailoftheinterestsinjointventuresareasfollows:(continued)

2010

Joint ventures incorporated in Thailand

GulfElectricPublicCo.,Ltd. Investmentinpower 50.00 6,672,769 11,673,659 1,233,700

(GEC)anditssubsidiaries project

BLCPPowerLtd.(BLCP) Electricitygeneration 50.00 10,433,597 10,231,787 3,800,966

NaturalEnergyDevelopmentCo.,Ltd. Developmentofrenewable 33.33 198,000 164,403 -

(NED) energyproject

Joint ventures incorporated in the Philippines

ConalHoldingsCorporation(Conal) Investmentinpower 40.00 954,647 615,011 128,355

anditssubsidiaries project

QuezonPower(Philippines),Limited Electricitygeneration 26.00 4,833,293 4,610,076 374,894

Co.(QPL) (Note13.1(a))

Joint venture incorporated in the Lao

People’s Democratic Republic

NamTheun2PowerCompanyLimited(NTPC) Electricitygeneration 35.00 5,569,943 3,416,814 -

Totalinterestsinjointventures 28,662,249 30,711,750 5,537,915

Consolidated

Asat31December2011and2010,underthetermsandconditionsofBLCP’sloanagreement,itscommonshareswere pledgedascollateralforitslong-termloans.

Asat31December2010,dividendsreceivablefromjointventuresamountingtoBaht5,756millionwererecognisedin theconsolidatedfinancialstatements.

Portionof Cost EquityMethod Investment Method Restated Dividend Business (%) Baht’000 Baht’000 Baht’000

(Including indirectholding)

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.3 Interestsinjointventures(continued)

Thedetailoftheinterestsinjointventuresareasfollows:(continued)

2011

Joint ventures incorporated in Thailand GulfElectricPublicCo.,Ltd.(GEC) Investmentinpower 50.00 6,672,769 1,530,063 anditssubsidiaries projectBLCPPowerLtd.(BLCP) Electricitygeneration 50.00 10,433,597 1,933,275NaturalEnergyDevelopmentCo.,Ltd.(NED) Developmentofrenewable 33.33 474,000 - energyprojects

Joint venture incorporated in the Lao People’sDemocratic Republic NamTheun2PowerCompanyLimited(NTPC) Electricitygeneration 35.00 5,569,943 1,374,866

Totalinterestsinjointventures 23,150,309 4,838,204

Company

Joint ventures incorporated in Thailand GulfElectricPublicCo.,Ltd.(GEC) Investmentinpower 50.00 6,672,769 1,233,700anditssubsidiaries projectBLCPPowerLtd.(BLCP) Electricitygeneration 50.00 10,433,597 3,800,966NaturalEnergyDevelopmentCo.,Ltd.(NED) Developmentofrenewable 33.33 198,000 - energyprojects

Joint venture incorporated in the Lao People’s Democratic Republic NamTheun2PowerCompanyLimited(NTPC) Electricitygeneration 35.00 5,569,943 -

Totalinterestsinjointventures 22,874,309 5,034,666

Asat31December2011,dividendsreceivablefromjointventuresamountingtoBaht6,089millionwererecognisedinthe companyfinancialstatements(31December2010amountingtoBaht5,756million).

PortionofInvestment CostMethod Dividend Business (%) Baht’000 Baht’000

(Including indirectholding)

2010

Company

PortionofInvestment CostMethod Dividend Business (%) Baht’000 Baht’000

(Including indirectholding)

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.3 Interestsinjointventures(continued)

(a) Thefollowingchangesininterestsinjointventuresoccurredduringtheyearended31December2011

NaturalEnergyDevelopmentCo.,Ltd.(NED)

On10October2011,NaturalEnergyDevelopmentCo.,Ltd(NED),whichisajointventureoftheCompany,issued additionalordinarysharesofBaht828million.TheCompanypaidtheadditionalpaid-upsharesinthesameportion asitsoriginalinvestment,totallingBaht276million.

On22December2011,NEDhascommencedtheCommercialOperationDate(COD)asspecifiedinthePower PurchaseAgreement(PPA)withEGAT.Thecontractiseffectivefortheperiodof5yearsstartingfromtheCOD.

13.4 Dividendsreceivablefromsubsidiariesandjointventures

Theprincipalmovementsofdividendsreceivableareasfollows:

Openingbalance 5,756,143,305 4,755,176,964 7,109,556,304 6,123,509,671Dividendsdeclaredbysubsidiaries - - 526,248,253 871,800,255Dividendsdeclaredbyjointventures 6,736,527,352 5,537,914,927 4,838,203,787 5,034,665,548Dividendsreceivedfromsubsidiariesandjointventures (6,403,252,203) (4,536,948,586) (5,455,968,612) (4,920,419,170)Closingbalance 6,089,418,454 5,756,143,305 7,018,039,732 7,109,556,304

For the years ended 31 December

13.5 TheGroup’sshareoftheassets,liabilities,revenuesandexpensesofthejointventuresisasfollows:

InterestinGulfElectricPublicCompanyLimited(GEC)

GulfElectricPublicCompanyLimitedisajointventurebetweentheCompanyandJ-PowerHoldings(Thailand)Company Limited (JPHT)andMitrPower (Thailand)CompanyLimited.GEC’sbusiness is thegenerationofelectricity forsale to ElectricityGeneratingAuthorityofThailand(EGAT)andindustrialusersunderlong-termpurchasingagreements.TheGroup hasa50%interestinGEC.

InterestinBLCPPowerLtd.(BLCP)

BLCPPowerLtd.isajointventurebetweentheCompanyandBanpuCoalPowerLimited.BLCP’sbusinessistogenerate electricityfromthecoalfireelectricitygeneratingplantforsaletoEGATunderlong-termpurchasingagreement,inwhich theGrouphasa50%interest.

InterestinConalHoldingsCorporation(Conal)

ConalHoldingsCorporation isa jointventurebetweenEGCOInternational (B.V.I.)Limited,which isasubsidiaryof the Company,andAlsonsConsolidatedResources,Inc.Conal’sbusinessisthegenerationofelectricityforsaletotheNational PowerCorporation(whichispartofthegovernmentsectorofthePhilippines)andtheprovisionofmaintenanceservices andpowerplantoperations,inwhichtheGrouphasa40%interest.

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

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13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.5 TheGroup’sshareoftheassets,liabilities,revenuesandexpensesofthejointventuresisasfollows:(continued)

InterestinNamTheun2PowerCompanyLimited(NTPC)

NamTheun2PowerCompanyLimitedisajointventurebetweenthegovernmentofLaoPDR(throughLaoHoldingState Enterprise(LHSE)),EDFInternational(EDFI)andtheCompany.NTPC’sbusinessisthegenerationofelectricityforsaleto EGATandElectriciteDuLaos(EDL),inwhichtheGrouphasa35%interest.

InterestinQuezonPower(Philippines),LimitedCo.(QPL)

QuezonPower(Philippines),LimitedCo.isajointventureofEGCOInternational(B.V.I.)Limited(EGCOBVI),theCompany’s subsidiary.EGCOBVIholds100%ofthesharesofGPIQuezonLtd.(GPIQ)andGPIQholds26%ofthetotalsharesof QPL.Accordingly,EGCOBVIisanindirectshareholderofQPL,witha52.125%interest(2010:26%interest).QPL’sbusiness is the generation of electricity for sale to the major private sector of the Philippines under long term purchasing agreements.

InterestinNaturalEnergyDevelopmentCo.,Ltd.(NED)

NaturalEnergyDevelopmentCo.,Ltd. isa jointventurebetweentheCompany,CLPThailandRenewablesLimitedand DiamondGeneratingAsiaLimited.ThejointventureisgovernedbyajointventureagreementandtheGrouphasa33.33% interest.NED’sbusinessistogenerateelectricityfromitssolarpowerplantforsaletoEGAT.

Detailsofthefinancialpositionandjointventure’sreturnfollowtheGroup’sownershipareasfollows:

GECanditssubsidiaries Thailand 22,281,418 10,309,915 15,320,892 1,842,428 50%BLCP Thailand 24,956,443 18,172,592 9,037,129 2,017,212 50%NED Thailand 2,163,454 1,751,266 6,578 (28,215) 33%Conalanditssubsidiaries ThePhilippines 1,572,158 187,589 698,514 47,361 40%QPL ThePhilippines 13,904,747 6,293,127 5,105,078 598,012 52.125%NTPC TheLaoPeople’s 13,055,843 10,892,283 2,703,209 1,097,355 35% Democratic Republic

Fortheyearended31December2011

Countryof Assets Liabilities Revenue Profit(loss) %interest incorporation Baht’000 Baht’000 Baht’000 Baht’000 held

(Includingindirectholding)

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

55-01-084_153-216 (2c) Eng_Y.ind190 190 3/9/12 4:06:20 PM

Page 193: Electricity Generating : Annual Report 2011

13 Investments in subsidiaries and interests in joint ventures, net (continued) 13.5 TheGroup’sshareoftheassets,liabilities,revenuesandexpensesofthejointventuresisasfollows:(continued)

Detailsofthefinancialpositionandjointventure’sreturnfollowtheGroup’sownershipareasfollows:(continued)

GECanditssubsidiaries Thailand 23,043,800 11,387,222 15,128,337 2,452,111 50%BLCP Thailand 24,790,948 18,026,639 8,989,336 3,035,365 50%NED Thailand 523,301 358,898 649 (22,687) 33%Conalanditssubsidiaries ThePhilippines 1,305,093 282,399 654,367 167,274 40%QPL ThePhilippines 6,785,623 2,650,206 2,774,911 615,715 26%NTPC TheLaoPeople’s 13,375,354 11,238,982 1,727,718 120,204 35% Democratic Republic

Fortheyearended31December2010(Restated)

14 Investment property

Bookvalue 322,071,012 322,071,012 322,071,012 322,071,012

Fairvalue 727,939,371 727,939,371 727,939,371 727,939,371

InvestmentpropertyoftheGroupislandheldforacurrentlyundeterminedfutureuse.

Countryof Assets Liabilities Revenue Profit(loss) %interest incorporation Baht’000 Baht’000 Baht’000 Baht’000 held

(Includingindirectholding)

For the years ended 31 December

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

191

55-01-084_153-216 (2c) Eng_Y.ind191 191 3/9/12 4:06:20 PM

Page 194: Electricity Generating : Annual Report 2011

15 P

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At 3

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(25,

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26

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42

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95

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C

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ofc

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

55-01-084_153-216 (2c) Eng_Y.ind192 192 3/9/12 4:06:20 PM

Page 195: Electricity Generating : Annual Report 2011

15 P

rope

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cont

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193

55-01-084_153-216 (2c) Eng_Y.ind193 193 3/9/12 4:06:21 PM

Page 196: Electricity Generating : Annual Report 2011

15 P

rope

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and

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cont

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Year

end

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

55-01-084_153-216 (2c) Eng_Y.ind194 194 3/9/12 4:06:21 PM

Page 197: Electricity Generating : Annual Report 2011

15 P

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195

55-01-084_153-216 (2c) Eng_Y.ind195 195 3/9/12 4:06:22 PM

Page 198: Electricity Generating : Annual Report 2011

15 P

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

55-01-084_153-216 (2c) Eng_Y.ind196 196 3/9/12 4:06:22 PM

Page 199: Electricity Generating : Annual Report 2011

15 P

rope

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197

55-01-084_153-216 (2c) Eng_Y.ind197 197 3/9/12 4:06:23 PM

Page 200: Electricity Generating : Annual Report 2011

15 Property, plant and equipment, net (continued) Asat31December2011,property,plantandequipmentamountingtoBaht1,899millionintheconsolidatedfinancialstatements weremortgagedandpledgedascollateralforlong-termloansanddebentures,asdescribedinNotes18and19(2010:Baht 7,867million).

Asat31December2011, theGrouphadnosignificantcapitalcommitments in respectofconstructionofpowerplantsand purchasesofequipmentbutnotyetrecognisedintheconsolidatedfinancialstatements(2010:Nil).

16 Right in long-term power and tap water purchase agreements and operation and maintenance agreements, net

Consolidated

2011 2010 Baht Baht

Openingnetbookvalue 175,339,183 181,646,649Acquisitionsofinvestmentsinsubsidiaries 555,101,557 8,994,328Amortisation(Note25) (44,494,281) (15,301,794)Closingnetbookvalue 685,946,459 175,339,183

At 31 December Cost 861,274,049 306,172,492LessCumulatedamortisation (175,327,590) (130,833,309)Netbookvalue 685,946,459 175,339,183

For the years ended 31 December

17 Other non-current assets, net

Deposits 15,643,995 13,593,824 11,527,548 11,527,548Licensesforoperatingpowerplants 74,528,877 80,700,929 - -Others 38,661,294 40,462,762 251,839 -Othernon-currentassets,net 128,834,166 134,757,515 11,779,387 11,527,548

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

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18 Long-term loans, net Thelong-termloansareasfollows:

Current portion of long-term loans, net

ThaiBaht 109,595,000 102,447,500 - -

USDollars 387,486,822 87,283,640 289,380,906 -

JapaneseYen 42,401,935 37,721,175 - -

LessDeferredfinancingfee (3,755,475) (3,754,608) - -

535,728,282 223,697,707 289,380,906 -

Long-term loans, net

ThaiBaht 8,254,927,500 8,364,522,500 8,000,000,000 8,000,000,000

USDollars 3,122,011,985 310,567,371 2,893,809,094 -

JapaneseYen 151,316,710 175,780,673 - -

LessDeferredfinancingfee,net (6,868,832) (10,624,308) - -

11,521,387,363 8,840,246,236 10,893,809,094 8,000,000,000

Totallong-termloans,net 12,057,115,645 9,063,943,943 11,183,190,000 8,000,000,000

Asat31December2011,thelong-termloansweremainlyoftheCompanyamountingtoBaht11,183million.Suchlong-term loansareunsecured loansfromlocalfinancial institutionswhichcomprised(a) long-termloansofBaht4,000millionbearing interestatthesix-monthTHBFIXrateplusacertainmarginperannum.Interestispayableonasemi-annualbasisandtheprincipal istobepaidin2014,(b)long-termloansofBaht4,000millionbearingfixedinterestrateat4.325%perannum.Interestispayable onamonthlybasisandtheprincipalistobepaidin2016.Theinterestrateon(c)Baht3,183millionofthelong-termloansfrom twolocalfinancialinstitutionsamountedtoUSDollars100millionaretheLIBORrateplusacertainmarginperannum.Interestis payableonasemi-annualbasis,commencingfromNovember2012.

Long-termloansatsubsidiariesaresecuredliabilities.Thelong-termloansaresecuredoverland,buildings,powerplantsand equipmentofthesubsidiaries.Thesubsidiariesarerequiredtomaintaincashreserveswhichareprovidedfromtheproceeds ofsalesofelectricityforthepurposeofrepaymentofprincipalandpaymentofinterestduewithinoneyearandasareservefor minimisingtheexchangerisk(refertoNote9).Inaddition,thePowerPurchaseAgreements,theAssetPurchaseAgreements, theMajorMaintenanceAgreementsandinsurancepolicieshavebeenassignedascollateralinaccordancewiththeconditions undertheLoanAgreementsanddebentures.

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

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18 Long-term loans, net (continued) Interestrateriskmanagement

ThedetailofinterestrateswapcontractstheGroupareshowninNote30(a).

Theinterestrateexposureonthelong-termloansoftheGroupaftertakingaccountofinterestrateswapcontractsisasfollows:

Long-termloans,net - atfixedrates 4,873,925,645 5,063,943,943 4,000,000,000 4,000,000,000 - atfloatingrates 7,183,190,000 4,000,000,000 7,183,190,000 4,000,000,000Totallong-termloans,net 12,057,115,645 9,063,943,943 11,183,190,000 8,000,000,000

Aftertakingaccountofinterestrateswaps,theweightedaverageeffectiveinterestratesofthelong-termloansoftheGroupwere approximately3.29%perannumforUSDollarsloans,2.96%perannumforJapaneseYenloansand4.21%perannumforThai Bahtloans.(2010:USDollars7.17%perannum,JapaneseYen2.83%perannumandThaiBaht4.64%perannum).

Aftertakingaccountofinterestrateswaps,theweightedaverageeffectiveinterestrateofthelong-termloansoftheCompany were2.36%perannumforUSDollarsloansand4.14%perannumforThaiBahtloans.(2010:ThaiBaht4.57%perannum).

Themovementsofthelong-termloansfromfinancialinstitutionscanbeanalysedasfollows:

Openingnetbookvalue 9,063,943,943 9,305,663,301 8,000,000,000 8,000,000,000Additionsoflong-termloans 3,042,700,000 - 3,042,700,000 -Repaymentsoflong-term (227,452,315) (208,094,034) - -LoansUnrealisedexchangelosses(gains) 174,169,409 (37,379,931) 140,490,000 -Amortisationofdeferredfinancingfee 3,754,608 3,754,607 - -

Closingnetbookvalue 12,057,115,645 9,063,943,943 11,183,190,000 8,000,000,000

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

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18 Long-term loans, net (continued) Maturityoflong-termloansisasfollows:

Within1year 535,728,282 223,697,707 289,380,906 -Laterthan1yearandnotlaterthan5years 10,942,625,519 4,820,710,190 10,315,047,250 4,000,000,000Laterthan5years 578,761,844 4,019,536,046 578,761,844 4,000,000,000Totallong-termloans,net 12,057,115,645 9,063,943,943 11,183,190,000 8,000,000,000

Credit facilities

Asat31December2011,theGrouphadtheavailablecreditfacilitiesfromfinancialinstitutionsamountedtoBaht4,108million ofwhichBaht4,000millionfortheCompany(2010:Baht4,333millionandUSDollars100millionofwhichBaht4,000millionand USDollars100millionwasfortheCompany).

19 Debentures ThedebenturesaredebenturesinThaiBahtofasubsidiaryasfollows:

Currentportionofdebentures - 496,621,203 - -Debentures,net - - - -Totaldebentures - 496,621,203 - -

Debenturesaresecuredliabilities.Thesubsidiaryisrequiredtomaintainreservesforrepaymentofprincipalandpaymentof interestduewithinoneyear.Thesecashreservesareprovidedfromtheproceedsofsalesofelectricity(refertoNote9).The subsidiaryalsohastopledgetherelevantassetsandagreementsascollateral(refertoNote18).

However,duringthesecondquarterof2011,debentureswerefullypaidinaccordancewithtermsandconditionssetoutinthe agreement.Asat31December2011,thesubsidiaryalreadyreleasedproperty,buildingsandequipmentofpowerplants,the PowerPurchaseAgreement,theMajorMaintenanceAgreementandinsurancepolicies,whichweremortgagedandpledgedas collateralforlong-termloansanddebenturesfromthelenders(Notes9and15).

Theweightedaverageeffectiveinterestrateexposureofthedebentureswas10.48%perannum(2010:13.86%perannum).

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

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19 Debentures (continued) Maturityofdebenturesisasfollows:

Consolidated

2011 2010 Baht Baht

Within1year - 496,621,203Laterthan1yearbutnotlaterthan5years - -Totaldebentures - 496,621,203

For the years ended 31 December

20 Retirement benefits obligation

Openingbalance 180,533,136 165,202,205 82,159,491 75,265,316Retirementbenefitexpenses 17,689,478 12,799,643 6,235,191 6,196,281Interestcost 8,298,568 7,587,214 4,074,905 3,767,703Actuarialgains - 1,912,590 - 925,881Retirementbenefitpaid (7,112,522) (6,968,516) (701,660) (3,995,690)Closingbalance 199,408,660 180,533,136 91,767,927 82,159,491

Thefollowingtableisasummaryoftheassumptionsrelatingtotheactuarialtechniqueasatthedateoffinancialstatements:

2011and2010

Discountrateasat31December 4.80%Salaryincreaserate 5.00%-10.00%Turnoverrate 0.00%-5.00%Pre-retirementmortalityrate 0.11%-2.18%

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

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21 Provision for decommissioning costs

Openingnetbookvalue - Aspreviouslyreported - - - - - Effectfromchangeinaccountingpolicy (Note2.2.1) 874,279,974 839,040,282 370,839,030 355,891,583 - Asrestated 874,279,974 839,040,282 370,839,030 355,891,583Additionalprovision 98,615,522 35,239,692 15,575,239 14,947,447Closingnetbookbalance 972,895,496 874,279,974 386,414,269 370,839,030

For the years ended 31 December

22 Legal reserve

Openingbalance 530,000,000 530,000,000 530,000,000 530,000,000Appropriationduringtheyear - - - -Closingbalance 530,000,000 530,000,000 530,000,000 530,000,000

UnderthePublicCompaniesActB.E.2535,theCompanyisrequiredtosetasideasalegalreserveatleast5%ofitsnetprofit after accumulateddeficit brought forward (if any) until the reserve is not less than10%of the registeredcapital. The legal reserveisnon-distributable.

23 Non-controlling interests

Openingbalance 509,094,479 521,174,207 - -Sharesofnetprofitfromsubsidiariesandinterests injointventures 126,289,149 115,330,432 - -Additioninvestmentinsubsidiary - (19,422,872) - -Dividendpaymentofsubsidiaries (80,356,721) (107,987,288) - -

Closingbalance 555,026,907 509,094,479 - -

For the years ended 31 December

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

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24 Other income

26 Finance costs

Dividendincomefromsubsidiaries andjointventures(Note13) - - 5,364,452,040 5,906,465,803Dividendincomefromothercompany 115,233,980 118,348,412 115,233,980 118,348,412Interestincome(Note31(f)) 176,396,514 88,882,158 189,063,659 111,140,429Rentalandservicesincome 63,030,708 47,371,179 137,805,052 109,910,119Gainondiscontinuedoperationofasubsidiary - - 6,982,607 330,000,000Others 94,457,459 131,595,129 79,198,329 121,292,355

Totalotherincome 449,118,661 386,196,878 5,892,735,667 6,697,157,118

For the years ended 31 December

25 Expense by nature Thefollowingexpenditureitemshavebeenchargedinarrivingatnetprofit:

Depreciationonplantandequipment(Note15) 1,919,833,684 2,151,362,804 1,053,132,814 1,076,811,398Amortisationofrightinlong-termpowerand tapwaterpurchaseagreements(Note16) 44,494,281 15,301,794 - -Majorrepairandmaintenanceexpensesofpowerplants 568,986,812 322,635,033 335,734,075 118,211,344Staffcosts 1,242,528,151 1,050,335,011 505,268,310 477,030,452

For the years ended 31 December

Interestexpenses 450,786,060 544,033,596 368,772,872 344,450,001Netlosses(gains)onexchangeratefrom foreigncurrencyloans 175,639,231 (42,878,997) 140,490,000 -Otherfinancecosts 67,779,566 62,827,273 27,343,636 36,291,908Totalfinancecosts 694,204,857 563,981,872 536,606,508 380,741,909

For the years ended 31 December

Consolidated Company

2011 2010 2011 2010 Baht Baht Baht Baht

Consolidated Company

2011 2010 2011 2010 Restated Restated Baht Baht Baht Baht

Consolidated Company

2011 2010 2011 2010 Restated Restated Baht Baht Baht Baht

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27 Earnings per share Basic earnings per share is calculated by dividing the net profit for the year attributable to shareholders by the weighted averagenumberofordinarysharesissuedandpaid-upduringtheyear,netoftreasurystock.

Netprofitattributabletoownersoftheparent(Baht) 4,989,534,456 6,802,559,659 4,894,490,943 6,168,977,649Weightedaveragenumberofordinaryshareinissue(Shares) 526,465,000 526,465,000 526,465,000 526,465,000Basicearningspershare(Baht) 9.48 12.92 9.30 11.72

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

28 Dividends Duringtheyearended31December2011,theCompanydeclaredandpaiddividendstotheshareholdersasdetailsbelow.

(a) AttheAnnualGeneralShareholders’Meetingdated21April2011,theshareholdersapprovedthepaymentofdividends inrespectoftheoperatingresultsforthesix-monthperiodended31December2010for526,465,000sharesatBaht2.75 pershare, totallingBaht1,448million.Thesedividendswerepaidtoshareholderson4May2011(2010:Dividendsfor 526,465,000sharesofBaht2.75pershare,totallingBaht1,448million).

Theshareholdersacknowledgedthepaymentsofinterimdividendsinrespectofoperatingresultsforthefirstsix-month periodof2010for526,465,000sharesatBaht2.50pershare,totallingBaht1,316million.Thesedividendswerepaidto shareholderson17September2010.

(b) TheBoardofDirectors’meetingon22August2011approvedtopayinterimdividendsinrespectoftheoperatingresults forthesix-monthperiodended30June2011for526,465,000sharesatBaht2.50pershare,totalingBaht1,316million. Thesedividendswerepaidtoshareholderson16September2011.

In addition, the Company reversed dividend payable, payable to foreign investors who were unable to exercise rights to receivesuchdividends,amountingtoBaht1millionduring2011(2010:Baht1million).

29 Promotional privileges TheGrouphasbeengrantedpromotionalprivilegesbytheOfficeof theBoardof Investmentunderpromotioncertificates in respectofelectricityandtapwatergeneration.Thesefoursubsidiarieshavebeengrantedexemptionfromcertaintaxesand dutiesasdetailedinthecertificatesincludingexemptionfromcorporateincometaxforaperiodofeightyearsfromthedateof first revenue.Aspromotedentities, thesesubsidiariesare required tocomplywith the termsandconditionsspecified in the promotioncertificates.

The promotional privileges of Khanom Electricity Generating Company Limited, Egcom Tara Company Limited, EGCO Cogeneration Company Limited and Roi-Et Green Company Limited in relation to the eight-year corporate income tax exemption expired on 26 September 2004, 14 February 2009, 10 January 2011 and 24 April 2011, respectively. Khanom

Consolidated Company

2011 2010 2011 2010 Restated Restated

Baht Baht Baht Baht

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29 Promotional privileges (continued) Electricity Generating Company Limited, EGCO Cogeneration Company Limited and Roi-Et Green Company Limited are eligibletoapplythecorporateincometaxrateof50%ofthenormalcorporateincomerateforaperiodoffiveyearsbeyondthe eight-yearcorporate income taxexemptionperiod.EgcomTaraCompanyLimited isnoteligible forany further reduction in corporate income tax. Accordingly, the net profit of Khanom Electricity Generating Company Limited and Egcom Tara CompanyLimitedaresubjecttothenormalcorporateincometaxrateaftertheexpirationdate.

30 Financial instruments The principal financial risks faced by the Group are interest rate and exchange rate risks. The Group borrows to finance itsoperations,whichinvolvepaymentsinforeigncurrencies,atbothfixedandfloatingratesofinterest.

The objectives of using derivative financial instruments are to reduce the uncertainty over future cash flows arising from movementsininterestratesandtomanagetheliquidityofcashresources.Interestrateexposureismanagedthroughinterest rate swap contracts. In respect of currency exchange risk, the formula for the calculation of revenues from the Availability PaymentsandEnergyPaymentschargedtoEGATallowsfortheminimisationoftheimpactofcurrencyexchange.

Trading for speculative purposes is not allowed. All derivative transactions are subject to prior approval by the respective boardofeachcompanyintheGroup.

(a) Financial assets and liabilities

As at 31 December 2011 and 2010, the Group had outstanding foreign currency assets and liabilities after taking accountofforeigncurrencyforwardcontractsasdetailsbelow.

2011 2010

Currency Currency Million MillionBaht Million MillionBaht

Liabilities USDollars 110.25 3,510 13.13 398JapaneseYen 469.73 194 570.53 213 3,704 611

Consolidated

Liabilities USDollars 100 3,183 - -

Company

2011 2010

Currency Currency Million MillionBaht Million MillionBaht

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30 Financial instruments (continued) (a) Financial assets and liabilities (continued)

Foreigncurrencyassetsrepresentcashandcashequivalents,tradereceivablesandUSDollarsdepositswithfinancial institutions.Foreigncurrencyliabilitiesrepresenttradepayables,otherpayables,interestpayablesandlong-termloans.

Asat31December2011, theGroupdidnotenter intoanyforeigncurrencyforwardcontracts tocover theirexchange riskrelatingtolong-termloanrepaymentsofUSDollars110.25millionandJapaneseYen469.73millionwhichwerethe netamountafterdeductingdepositsandinvestmentsinforeigncurrency(2010:USDollars13.13millionandJapanese Yen570.53million).However, theGroupreceivescompensationfromEGATforexchangerateeffectsrelatedto itsUS DollarsandJapaneseYendebtservices.

Objectivesandsignificanttermsandconditions

In order to manage risks arising from fluctuations in interest rates and currency exchange rates, the Group uses the followingderivativefinancialinstruments.

Interestrateswapcontracts

Interestrateswapcontractsareenteredintotomanageexposuretofluctuationsininterestratesonspecifictransactions. TheCompanyenteredintoaninterestrateswapcontractbyconvertingfloatingratestofixedrateforthetotalamountof long-termloansofBaht4,000millionandofUSDollars55million(whichequivalenttoBaht1,751million).Asubsidiaryof theCompanyenteredintoaninterestrateswapcontractbyconvertingfloatingratestofixedrateforthetotalamountof long-termloansofUSDollars10.25million(whichequivalenttoBaht326million)andofBaht365million.

Thefixedinterestratesundertheswapsforlong-termloansat31Decemberwere:

Contractamounts(millions) FixedExchangeRates

2011 2010 2011 2010

USDollars 65 13 2.60-7.42 7.42ThaiBaht 4,365 4,467 2.48-5.65 2.48-5.65

Currency

Theremainingnotionalprincipalamountsoftheoutstandinginterestrateswapcontractsat31Decemberwere:

Within1year 367 190 159 -Laterthan1year 6,075 4,675 5,592 4,000 6,442 4,865 5,751 4,000

Consolidated Company

2011 2010 2011 2010 MillionBaht MillionBaht MillionBaht MillionBaht

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30 Financial instruments (continued) (b) Credit risk

TheGrouphasnosignificantconcentrationsofcreditriskrelatingtoitscashandinvestments.TheGroupplacesitscash and investmentswith highquality financial institutions. TheGroup’spolicy isdesigned to limit exposurewith anyone institutionandtoinvestitsexcesscashinlowriskinvestmentaccounts.TheGrouphasnotexperiencedanylosseson suchaccounts.For trade receivables, theGroup’s salesaremade toEGATand industrial usersunder the termsand conditionsof the long-termPowerPurchaseAgreementsand the long-termElectricityandSteamSalesandPurchase Agreements.

(c) Fair value

Thecarryingamountsofthefollowingfinancialassetsandfinancialliabilitiesapproximatetheirfairvalues:cashandcash equivalents, investments, trade receivables and payables, amounts due from and due to related companies, other receivablesandpayables,andshort-termloansduetotheshortmaturitiesoftheseinstruments.

Long-termloansanddebentures

Thefairvaluesoflong-termloanswithfixedinterestrateshavebeencalculatedfromthenetpresentvalueoffuturecash flowsdiscountedbymarketinterestratesusingratesatthedateoffinancialstatements.Thefairvaluesoflong-termloans withfloatinginterestratesapproximatetheircarryingamounts.

The fair value of debentures is estimated by discounting the future contractual cash flows at the market interest rate availableonthelatesttradingdateintheThaiBondDealingCenteronthedateoffinancialstatements.

Thecontractamountsand fairvaluesofcertain long-term loansanddebentureswith fixed interest ratesat thedateof financialstatementsareasfollows:

Long-termloans 4,192 4,394 4,000 4,142

2011

Long-termloans 4,212 5,138 4,000 4,880Debentures 497 513 - -

2010

Consolidated Company

Consolidated Company

Contractamounts Fairvalues Contractamounts Fairvalues MillionBaht MillionBaht MillionBaht MillionBaht

Contractamounts Fairvalues Contractamounts Fairvalues MillionBaht MillionBaht MillionBaht MillionBaht

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30 Financial instruments (continued) (c) Fair value (continued)

Thefairvaluesofthederivativefinancialinstrumentsatthedateoffinancialstatementsareasfollows:

Unfavourableinterestrateswaps (126) (126) (100) (85)Favourableinterestrateswap 14 23 14 23

The fair valuesof interest rateswapcontracts,currencyand interest rateswapcontractshavebeencalculatedusing ratesquotedbytheGroup’sbankerstoterminatethecontractsatthedateoffinancialstatements.

31 Related party transactions Enterprisesandindividualsthatdirectly,orindirectlythroughoneormoreintermediaries,control,orarecontrolledby,orare undercommoncontrolwiththecompany,includingholdingcompanies,subsidiariesandfellowsubsidiariesarerelatedparties oftheCompany.Associatesandindividualsowning,directlyorindirectly,aninterestinthevotingpoweroftheCompanythat gives them significant influence over the Company, key management personnel, including directors and officers of the Company and close members of the family of these individuals and companies associated with these individuals also constituterelatedparties.

In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merelythelegalform.

ThemajorshareholdersoftheCompanyaretheElectricityGeneratingAuthorityofThailand(EGAT)andOneEnergyThailand Limited (formerly named “CLP Power Projects (Thailand) Limited”), holding 25.41% and 22.42% of the Company’s shares, respectively.TheremainingsharesintheCompanyarewidelyheld.

On1April2011,OneEnergyThailandLimitedtransferredallof itsshareholdingintheCompanytoTEPDIAGeneratingB.V. whichisajointventurevehicleownedbyTokyoElectricPowerCompany(TEPCO)andDiamondGeneratingAsia,Limited.

TheinformationontheCompany’ssubsidiariesandjointventuresisprovidedinNote13.

Thefollowingmaterialtransactionswerecarriedoutwithrelatedparties:

(a) Sales of electricity

Salesofelectricity - Majorshareholder 6,017 6,816 2,258 2,535

For the years ended 31 December

Consolidated Company

2011 2010 2011 2010 MillionBaht MillionBaht MillionBaht MillionBaht

Consolidated Company

2011 2010 2011 2010 MillionBaht MillionBaht MillionBaht MillionBaht

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31 Related party transactions (continued) Thefollowingmaterialtransactionswerecarriedoutwithrelatedparties:(continued)

(a) Sales of electricity (continued)

TheCompanyandthreesubsidiaries,KhanomElectricityGeneratingCompanyLimited(KEGCO),EGCOCogeneration Company Limited, and Roi-Et Green Company Limited, have entered into Power Purchase Agreements (PPAs) with EGAT.Theagreementsareeffectiveforperiodsof20,20,21and21years,respectively.Accordingtotheresolutionsof theCabinetmeetingsdated15February1994,23January1996,28January2003,and29May2003,respectively,the electricity revenues from such agreements must be calculated on a cost plus basis. There is a limitation on sales of electricitytothirdpartiesasspecifiedintheagreements.

Inaddition,theCompanyandKEGCOareeligibletoreceivecompensationforexchangerateeffects,byadjustingthe formulaforcalculationofelectricitysoldtoEGATeachmonthpertainingtoTheFirstAmendmenttothePowerPurchase Agreementsdated30January1998overtheperiodsofthePPAs.Compensationfortheyearsended31December2011 and2010amountingtoBaht33millionandBaht91millionrespectively.

UnderthePPAsoftheCompanyandofKEGCO,EGAThastobearthenaturalgascostuntiltheCompanyandsubsidiary enter intonaturalgaspurchaseagreementswithPTTPublicCompanyLimited.Todate, theCompanyandsubsidiary havenotenteredintosuchpurchaseagreements.Therefore,thecalculationofrevenuesfromtheportionofenergysales ofelectricityandthenaturalgascostarenotincludedinthesefinancialstatements.

(b) Service income

Serviceincome -Majorshareholder 51 122 - -

For the years ended 31 December

EGCOEngineeringandServiceCompanyLimitedhasenteredintotheSubcontractforMajorMaintenanceAgreementwith EGAT toprovidemajormaintenanceservices, repair services,administrativeservicesandadditional services related to powerplants. Thecompensation for suchservices iscalculatedonacostplusbasis. Theagreement iseffective fora periodofeightyearscommencingfrom24September2007.

Consolidated Company

2011 2010 2011 2010 MillionBaht MillionBaht MillionBaht MillionBaht

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31 Related party transactions (continued) Thefollowingmaterialtransactionswerecarriedoutwithrelatedparties:(continued)

(c) Major maintenance expenses

Majormaintenanceexpenses -Majorshareholder 215 259 131 50

For the years ended 31 December

Tradereceivables - Majorshareholder 549 545 202 220

Outstandingtradereceivablesasat31Decembercanbeanalysedasfollows:Notoverdue 545 506 202 220Overduebelow3months 3 1 - -Overdue3-6months - 38 - -Overdue6-12months - - - -Overdueover12months 1 - - - 549 545 202 220

Tradepayables - Majorshareholder 65 93 56 34

As at 31 December

TheCompanyandsubsidiaryoftheCompany,KEGCO,haveenteredintoMajorMaintenanceAgreementswithEGATin orderforthelattertoprovidemajormaintenanceservices,repairservices,administrativeservicesandadditionalservices relatedtotheCompanyandsubsidiary’spowerplants.Thepriceforsuchservicesiscalculatedundertheagreements onacostplusbasisandwillbeadjustedannuallyaccordingtotheConsumerPriceIndex.Theagreementshavebeen extendedforaperiodofeightyears,commencingfrom7December2006fortheCompanyandaperiodoffouryears, commencingfrom1August2008forKEGCO.

(d) Trade receivables from and trade payables to a related party

Consolidated Company

2011 2010 2011 2010 MillionBaht MillionBaht MillionBaht MillionBaht

Consolidated Company

2011 2010 2011 2010 MillionBaht MillionBaht MillionBaht MillionBaht

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31 Related party transactions (continued) Thefollowingmaterialtransactionswerecarriedoutwithrelatedparties:(continued)

(e) Amounts due from and amounts due to related parties

Amountsduefromrelatedparties - Majorshareholder 9 8 9 8 - Subsidiaries - - 10 8 - Jointventures 42 52 4 4 51 60 23 20

Amountsduefromrelatedpartiesdueoveroneyear 168 247 168 247

Amountsduetorelatedparties - Majorshareholder - 2 - 2 -Subsidiaries - - 4 4 - Otherrelatedparty 10 10 - - 10 12 4 6

Righttosharespareparts(othernon-currentliabilities) - - 24 24

As at 31 December

(f) Loans to related parties and related interests

Long-termloantoarelatedparty-subsidiary - Duewithin1year - - 46 46 - Dueover1year - - 596 642 - - 642 688

For the years ended 31 December Interestincome -Subsidiary - - 43 38

As at 31 December

On 22 November 2005, the Company entered into a long-term loan agreement with EGCO Engineering and Service CompanyLimitedto lendBaht780million.Theprincipal is toberepaidannually in theamountofBaht46millionfrom December2009toDecember2025.TheinterestrateisMLRminusacertainmarginandinterestispayableonasemi- annualbasis.

Consolidated Company

2011 2010 2011 2010 MillionBaht MillionBaht MillionBaht MillionBaht

Consolidated Company

2011 2010 2011 2010 MillionBaht MillionBaht MillionBaht MillionBaht

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

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31 Related party transactions (continued) Thefollowingmaterialtransactionswerecarriedoutwithrelatedparties:(continued)

(g) Investment in debentures issued by a subsidiary and related interests

As at 31 December Investmentindebentures(investmentinmarketable securities) - Subsidiary - - - 6

For the years ended 31 December Interestincomeoninvestmentindebenturesof - Subsidiary - - 1 3

(h) Office building rental and service income

TheCompanyhasenteredintoOfficeBuildingRental,ServiceChargesandManagementAgreementswithsubsidiaries and joint ventures. The agreements are renewed yearly. The price for management services is calculated under the agreementsonacostplusbasis.

Company

2011 2010 MillionBaht MillionBaht

Officebuildingrentalandserviceincome -Subsidiaries 7 7 7 7

Managementfee -Subsidiaries 53 35 -Jointventures 50 33 103 68

For the years ended 31 December

(i) Directors and managements remuneration

Short-termemployeebenefits 91 86 66 59Postemploymentbenefits 2 2 1 1Totaldirectorandmanagementsremuneration 93 88 67 60

For the years ended 31 December

Consolidated Company

2011 2010 2011 2010 MillionBaht MillionBaht MillionBaht MillionBaht

Consolidated Company

2011 2010 2011 2010 MillionBaht MillionBaht MillionBaht MillionBaht

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32 Commitments and significant agreements 32.1 Commitments

(a) Asat31December2011,theCompanyhadcommitmentsunderSponsorSupportAgreements,whichweremade inrespectofloansofsubsidiaries,totallingBaht354million(31December2010:Baht374million).

(b) Asat31December2011,theCompanyhadcommitmentsundertheCounterGuaranteeandStandbyLettersof Credit issuedonbehalfof theCompany toasubsidiaryand jointventuresofBaht1,077million (31December 2010:Baht2,213million).

(c) According to the Power Purchase Agreements (PPAs) between the Company’s subsidiaries and the Electricity GeneratingAuthorityofThailand(EGAT)whoseperiodbetween15yearsand21years,thesubsidiarieshaveto providebankguarantees,totallingBaht140million.Thecollateralistobereturnedtosuchsubsidiariesuponthe expiryoftheagreements.

(d) Asat31December2011,thecommonsharesofBLCPwerepledgedascollateralforthelong-termloansofBLCP asdescribedinNote13.3.

32.2 Significantagreements

InadditiontothePPAswithEGATwhichisoneoftheCompany’smajorshareholdersasdiscussedinNote31,theGroup hadthefollowingsignificantagreements:

WaterSupplyAgreement

AsubsidiaryoftheCompanyhasenteredintoawatersupplyagreementwiththeProvincialWaterworksAuthority(PWA) foraperiodof30years.Undertheagreement,thesubsidiaryisrequiredtoproducewaterforsaletoPWAinRatchaburi andSamutsongkramprovinces.ThePWAhasanobligationtopurchasewaterattheminimumvolumeandpriceagreed.

FuelPurchaseAgreements

SubsidiariesoftheCompanyhaveenteredintogaspurchaseagreementswithPTTPublicCompanyLimited(PTT).These agreementsareeffectiveforaperiodof21yearsandcanbeextendedforanotherfouryears.

Asubsidiaryof theCompanyhasentered intoaheavy fueloilpurchaseagreementwithPTT.Theagreementshallbe effectiveforaperiodofthreeyearsfrom1January2005to31December2008.Theagreementhasbeenextendedby oneyearandcanbeextendedautomaticallyforfurtherone-yearperiods(intheeventthatthereisnocancellationofthe automaticextension).

OperationandMaintenanceAgreements

A subsidiary of the Company has entered into power plant operation and maintenance, and power plant equipment maintenanceagreementswiththreecustomers.Theagreements,totallingBaht694million,areeffectiveforaperiodof5 to6years.Inaddition,thesubsidiaryhasalsoenteredintoasubcontractforSupplyofSparePartswithathirdparty.This agreementiseffectiveforaperiodof2to3years.ThetotalcontractpriceisUSDollars14.48million.

Long-termOperationandMaintenanceAgreements

A subsidiary of the Company has entered into power plant operation and maintenance, and power plant equipment maintenanceagreementwithPTTUtilityCompanyLimited.Theagreements,totallingBaht140million,areeffectivefora periodof10years.

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33 Post statement of financial position event (a) On18January2012, theCompany invested in90%ofordinarysharesofTheppanaWindFarmCo.,Ltd.which is the VSPP wind power project developer. The partial payment of Baht 2.5 million was made on 18 January 2012. The remainingpaymentof7.5millionwillbepaidafterthecompletionoftheconditionintheSharePurchaseAgreement.

(b) On16December2011, theCompany invested in thesolarpowerplantsofSPPThreeCo.,Ltd. (SPP3)andSPPFour Co., Ltd. (SPP4). In January and February 2012, the Company paid for a 99.99% interest in SPP4 from MEMC SingaporePteLtd.withanamountofBaht291million.SPP4commenceditsCommercialOperationDateon24January 2012.Thecounter-partiescompletedtheconditionintheagreementinJanuary2012.

(c) On 2 February 2012, the Natural Energy Development Co., Ltd. (NED), which is a joint venture, called for additional paid-upsharecapital.TheGrouppaidtheadditionalpaid-upsharecapitalinthesameportionasitsoriginalinvestment, totalingBaht86million.

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Audit Fee

In2011,EGCOanditssubsidiariespaidtheauditfeeof3,473,500bahttotheOfficeoftheAuditors,comprisingEGCO’sandsubsidiaries’auditfeesof1,986,390bahtand1,487,110baht,respectively.NootherauditfeehadbeenpaidtotheauditorsorrelatedpartiestotheauditorsandtheAuditors’office.

Non-Audit Fee

EGCO’sandsubsidiaries’totalnon-auditfeewas28,499,322bahtwhichwasalreadypaidof25,501,221baht.Inaddition,EGCOanditssubsidiarieswouldalsoberesponsiblefortheexpensesofundeliveredworkof2,998,111baht.Thedetailsofthenon-auditfeewereasfollows:

1. PaymenttotheOfficeoftheAuditors:

In2011,thenon-auditfeefortheadvisoryservicesonInternationalFinancialReportingStandardsandaccountingpurposereview atEGCOanditssubsidiariesofficeswas2,308,130bahtwhichwasalreadypaidof1,938,130bahttotheOfficeoftheAuditors. Inaddition,EGCOanditssubsidiarieswouldalsoberesponsiblefortheexpensesofundeliveredworkof370,000baht.

2. PaymenttoOtherRelatedPartiesoftheAuditors’Office:

In2011,thenon-auditfeeforthespecialpurposereviewandadvisoryservicesonoffshoreinvestmentstructurewas26,191,202 bahtwhichwasalreadypaidof23,563,091bahttootherrelatedpartiesoftheAuditors’office.Inaddition,EGCOanditssubsidiaries wouldalsoberesponsiblefortheexpensesofundeliveredworkof2,628,111baht.

TheengagementsoftheofficeoftheAuditorsanditsrelatedpartiestoprovidethenon-auditworkwerereportedtotheAuditCommitteetoensurethatitwouldnotinvolveanyconflictofinterestoranyreviewoftheirownworkwhichwouldcontaminatetheindependencejudgmentoftheauditors.

Audit Fee

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Starting from 2004, the Company had the policy to present the annual report in CD ROM format to save the cost and to reduce tree cutting over the long term. The Company committed to make a donation to the “Thai Forest Conservation Foundation” which had the objective to conserve the environment on behalf of all shareholders who opt for electronic form.

In 2010, the Company donated the cost saving in this regard to the Thai Forest Conservation Foundation on behalf of all shareholders in the amount of 2,653,248 baht.

The Company thanks all our shareholders and stakeholders who have made this donation and the Company looks forward to your support in the future.

Report on the donation on behalf of all shareholders who elect to receive the Annual Report in the electronic form

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General Information

Registered Paid-up Ownership Company Business Share Capital Par Value Share Capital Interest (Million Baht) (Baht) (Million Baht) (Direct+ Indirect) (%)

Electricity Generating Public Company Limited (EGCO) Holding Company focusing on Power 5,300 10 5,264.65 -

Registration 0107537000866 (No.BorMorJor.333) business and others related to power

Head Office 14th, 15th Floor EGCO Tower, 222 business

Moo 5, Vibhavadi Rangsit Road,

Tungsonghong, Laksi,

Bangkok 10210, Thailand

Tel. 66 0 2998 5000

Fax 66 0 2955 0956-9

Rayong Power Plant Independent Power Producer (IPP)

Bangkok Office 12th Floor, EGCO Tower Electricity Generating and supply

Tel. 66 0 2998 5000 business

Fax 66 0 2955 0931

Rayong Office 35 Rayong Highway No. 3191

Huay Pong District, Amphur Muang,

Rayong 21150, Thailand

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

66 0 3868 1020

Sector Energy & Utilities

Industry Resources

Foreign Limit 44.81%

Share of Minor 51.90%

Shareholder

(% Free Float)

Website www.egco.com

Subsidiaries Registered Paid-up Ownership Company Business Share Capital Par Value Share Capital Interest (Million Baht) (Baht) (Million Baht) (Direct+ Indirect) (%)

Khanom Electricity Generating Company Limited (KEGCO) IPP 5,000 10 4,850 99.99

Office 12th Floor, EGCO Tower Electricity Generating and supply

Tel. 66 0 2998 5000 business

Fax 66 0 2955 0932

Site Office 112 Moo 8, Tongnean District,

Amphur Khanom, Nakhon Sri-

Thammarat 80210, Thailand

Tel. 66 0 7552 9173, 66 0 7552 9179

Fax 66 0 7552 8358

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Registered Paid-up Ownership Company Business Share Capital Par Value Share Capital Interest (Million Baht) (Baht) (Million Baht) (Direct+ Indirect) (%)

EGCO Engineering & Service Company Limited (ESCO) Engineering, operation and 400 10 400 99.99

Office 13th Floor, EGCO Tower maintenance services for power

Tel. 66 0 2998 5000 plants and manufacturers

Fax 66 0 2955 0933

Site Office 35 Rayong Highway No. 3191

Huay Pong District, Amphur Muang,

Rayong 21150, Thailand

Tel. 66 0 3868 2611-4

Fax 66 0 3868 2823

North Pole Investment Company Limited (North Pole) Holding company focusing on 5,724.76/1 31.6116/1 5,724.76/1 100

Office EGCO Tower investment in electricity generating

Tel. 66 0 2998 5000 companies in foreign countries (181,096,921 (1USD) (181,096,921

Fax 66 0 2955 0956-9 USD) USD)

Oversea office 6th Floor, Tower A, 1 CyberCity,

Ebene, Republic of Mauritius

EGCO International (B.V.I.) Limited (EGCO B.V.I.) Holding company focusing on 11.06/1 31.6116/1 11.06/1 100

Office EGCO Tower investment in electricity generating

Tel. 66 0 2998 5000 companies in foreign countries (350,000USD) (1USD) (350,000USD)

Fax 66 0 2955 0956-9

Oversea office Akara Bldg., 24 De Castro Street,

Wickhams Cay 1, Road Town,

Tortola, British Virgin Islands,

P.O. Box 3136

New Growth Cooperatief U.A. (Coop) Holding company focusing on 2.23/2 4,088.28/2 2.23/2 100

Office EGCO Tower investment in electricity generating

Tel. 66 0 2998 5000 companies in foreign countries (54,500EUR) (100EUR) (54,500EUR)

Fax 66 0 2955 0956-9

Oversea office De Lairessestraat 154, 1075 HL

Amsterdam, The Netherlands

New Growth B.V. (BV) Holding company focusing on 1.12/2 4,088.28/2 1.12/2 100

Office EGCO Tower investment in electricity generating

Tel. 66 0 2998 5000 companies in foreign countries (27,500EUR) (100EUR) (27,500EUR)

Fax 66 0 2955 0956-9

Oversea office De Lairessestraat 154, 1075 HL

Amsterdam, The Netherlands

Pearl Energy Philippines Operating, Inc. (PEPOI) Operation and Maintenance of QPL 6.32/1 - 6.32/1 100

Office EGCO Tower (200,000USD) (200,000USD)

Tel. 66 0 2998 5000

Fax 66 0 2955 0956-9

Oversea office Barangay, Cagsiay I, Mauban,

Quezon, Philippines 4330

EGCO Cogeneration Company Limited (EGCO Cogen) Small Power Producer (SPP) 1,060 10 1,060 80

Office 13th Floor, EGCO Tower Electricity and steam generating and

Tel. 66 0 2998 5000 supply business

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Subsidiaries (continued)

Registered Paid-up Ownership Company Business Share Capital Par Value Share Capital Interest (Million Baht) (Baht) (Million Baht) (Direct+ Indirect) (%)

Fax 66 0 2955 0956-9

Site Office 222 Moo 8, Mabkha District,

Amphur Nikhom Phattana,

Rayong 21180, Thailand

Tel. 66 0 3863 7051-8

Fax 66 0 3863 7063

EGCO Green Energy Company Limited (EGCO Green) Holding company focusing on power 175 10 175 74

Office EGCO Tower business

Tel. 66 0 2998 5000

Fax 66 0 2955 0956-9

Roi-Et Green Energy Company Limited (Roi-Et Green) SPP utilizing Biomass as primary fuel 180 10 180 70.30

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

Office 13th Floor, EGCO Tower

Tel. 66 0 2998 5000

Fax 66 0 2955 0956-9

Site Office 222 Moo 10, Nua-Muang District,

Amphur Muang, Roiet 45000,

Thailand

Tel. 66 0 4351 9825-6

Fax 66 0 4351 9827

Agro Energy Company Limited (AE) Trading/delivery service of fuel from 2 10 2 99.99

(ESCO is the company’s 99.99% shareholder) natural scrap

Office EGCO Tower

Tel. 66 0 2998 5000

Fax 66 0 2955 0956-9

Egcom Tara Company Limited (ET) Piped water generating and supply 345 10 345 74.19

(ESCO is the company’s 74.19% shareholder) business

Office 13th Floor, EGCO Tower

Tel. 66 0 2998 5000

Fax 66 0 2955 0945

Site office

• Plant 1 332 Moo 2, Pongsawai District,

Amphur Muang, Ratchburi 70000,

Thailand

• Plant 2 250 Moo 1, Pangpuay District,

Amphur Damneansaduak,

Ratchburi 70130, Thailand

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Joint Venture

Registered Paid-up Ownership Company Business Share Capital Par Value Share Capital Interest (Million Baht) (Baht) (Million Baht) (Direct+ Indirect) (%)

Gulf Electric Public Company Limited (GEC) Holding company focusing on IPP 14,000 10 13,784.35 50

Office 11th Floor, M. Thai Tower I, and SPP

All Seasons Place, 87 Wireless Road,

Lumpini, Phathumwan,

Bangkok 10330, Thailand

Tel. 66 0 2654 0155

Fax 66 0 2654 0156-7

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

Gulf Power Generation Company Limited (GPG) Independent Power Producer (IPP) 9,607 10 9,607 50

(GEC is the company’s 100% shareholder) Electricity Generating and supply

Site office 64 Moo 2 Ban Pa District, business

Amphur Kaeng Khoi,

Saraburi 18110, Thailand

Tel. 66 0 3624 8305

Fax. 66 0 3624 8314, 66 0 3625 1344

Gulf Cogeneration Company Limited (GCC) Small Power Producer (SPP) 850 10 850 50

(GEC is the company’s 100% shareholder) Electricity and steam generating and

Site office 79 Moo 3 Tandeow District, supply business

Amphur Kaeng Khoi,

Saraburi 18110, Thailand

Tel. 66 0 3624 6531

Fax 66 0 3624 8020

Nong Khae Cogeneration Company Limited (NKCC) Small Power Producer (SPP) 1,241.72 74 1,241.72 50

(GEC is the company’s 100% shareholder) Electricity and steam generating and

Site office 111/11 Moo 7 Nongplamor District, supply business

Amphur Nong Khae,

Saraburi 18140, Thailand

Tel. 66 0 3637 3676

Fax 66 0 3637 3691

Samutprakarn Cogeneration Company Limited (SCC) Small Power Producer (SPP) 981.54 76 981.54 50

(GEC is the company’s 100% shareholder) Electricity and steam generating and

Site office 745 Moo 2 Bang Pu Mai District, supply business

Amphur Muang,

Samutprakarn 10280, Thailand

Tel. 66 0 2709 0751

Fax 66 0 2709 1842

Gulf Yala Green Company Limited (GYG) SPP utilizing Biomass as primary fuel 460 10 460 50

(GEC is the company’s 100% shareholder)

Site office 80 Moo 1, Pron District,

Amphur Muang, Yala 95160,

Thailand

Tel. 66 0 7325 2721

Fax 66 0 7325 2722

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Joint Venture (continued)

Registered Paid-up Ownership Company Business Share Capital Par Value Share Capital Interest (Million Baht) (Baht) (Million Baht) (Direct+ Indirect) (%)

Conal Holding Corporation (Conal) Holding company focusing on power 827.63/1 103.37/1 827.63/1 40

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

Office EGCO Tower (26,181,409 (3.27USD) (26,181,409

Tel. 66 0 2998 5000 USD) USD)

Fax 66 0 2955 0956-9

Oversea office 4th Floor, Alphaland Southgate Tower

2258 Chino Roses Avenue Corner

EDSA, Makati City, 1232 Philippines

Tel. (632) 836 4940, (632) 836 4403

Fax (632) 801 0593

Alto Power Management Corporation (APMC) Operation and maintenance services 15.69/1 78.40/1 7.84/1 24

(Conal is the company’s 60% shareholder) for power plants and consulting

Oversea office 4th Floor, Alphaland Southgate Tower (496,278USD) (2.48USD) (248,139USD)

2258 Chino Roses Avenue Corner

EDSA, Makati City, 1232 Philippines

Tel. (632) 836 4940, (632) 836 4403

Fax (632) 801 0593

Western Mindanao Power Corporation (WMPC) IPP 410.18/1 82.19/1 307.47/1 17.6

(Conal is the company’s 44% indirect shareholder) Electricity Generating and supply

Oversea office 4th Floor, Alphaland Southgate Tower business (12,975,535 (2.60USD) (11,719,503

2258 Chino Roses Avenue Corner USD) USD)

EDSA, Makati City, 1232 Philippines

Tel. (632) 836 4940, (632) 836 4403

Fax (632) 801 0593

Site office Sitio Malasugat, Sangali,

Zamboanga City, Philippines

Southern Philippines Power Corporation (SPPC) IPP 257.74/1 85.98/1 237.55/1 17.6

(Conal is the company’s 44% indirect shareholder) Electricity Generating and supply

Oversea office 4th Floor, Alphaland Southgate Tower business (8,153,289USD) (2.72USD) (7,514,615USD)

2258 Chino Roses Avenue Corner

EDSA, Makati City, 1232 Philippines

Tel. (632) 836 4940, (632) 836 4403

Fax (632) 801 0593

Site office Bo. Baluntay, Alubel,

Sarangani, Philippines

Quezon Power (Philippines), Limited Co. (QPL) IPP 6,563.87/1 - 6,563.87/1 52.125

(North Pole is the company’s 52.125% indirect Electricity Generating and supply

shareholder) business (207,641,268 (207,641,268

Oversea office 62 H. Dela Costa, Mauban, USD) USD)

Quezon Province,

Republic of Philippines

Site Office Barangay, Cagsiay I, Mauban,

Quezon, Philippines 4330

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Joint Venture (continued)

Registered Paid-up Ownership Company Business Share Capital Par Value Share Capital Interest (Million Baht) (Baht) (Million Baht) (Direct+ Indirect) (%)

BLCP Power Limited (BLCP) IPP 12,010 100 12,010 50

(Since January 30, 2007) Electricity Generating and supply

Office No. 9, I-8 Road, business

Map Ta Phut Industrial Estate,

Rayong 21150, Thailand

Tel. 66 0 3892 5100

Fax 66 0 3892 5199

Nam Theun 2 Power Company Limited (NTPC) IPP 14,225.22/1 3,161.16/1 11,806.93/1 35

Office Unit 9, Tat Luang Road Electricity Generating and supply (450,000,000 (100USD) (373,500,000

Nongbone Village, P.O. Box 5862 business USD) USD)

Vientiane, Lao PDR

Tel. (856-21) 263 900

Fax (856-21) 263 901

Natural Energy Development Company Limited (NED) SPP 2,304 10 594 33.33

Office 45/F The Offices at Central World Electricity Generating and supply

999/9 Rama 1 Road, Patumwan business using solar power

Bangkok 10330, Thailand

Website www.ned.co.th

Other Registered Paid-up Ownership Company Business Share Capital Par Value Share Capital Interest (Million Baht) (Baht) (Million Baht) (Direct+ Indirect) (%)

Eastern Water Resources Development and Water resources development and 1,663.73 1 1,663.73 18.72

Management Public Company Limited (EASTW) management for supplying raw water

Offic 23 - 26/F Eastwater Building, to the customers

1 Vibhavadi Rangsit Road, Jomphol,

Chatuchak, Bangkok 10900, Thailand

Tel. 66 0 2272 1600

Fax 66 0 2272 1601-3

Website www.eastwater.com

Xayaburi Power Company Limited (Xayaburi) Feasibility study on Hydroelectric 1,000 10 1,000 12.50

Office 215 Lanexang Avenue, Ban Siang project in Lao PDR

Yuen, Chantaburi District, Vientiane,

Lao PDR

Tel. (856-21) 223 215, 252 060

Fax (856-21) 215 500

Note : The Exchange rate as at December 30, 2011

/1 1 USD = Baht 31.6116

/2 1 EUR = Baht 40.8828

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Referenced Persons

Regulator The Securities and Exchange Commission, Thailand GPF Witthayu Building, 93/1 Wireless Road, Lumpini, Patumwan, Bangkok 10330, Thailand Tel. 66 0 2695 9999, 66 0 2263 6499 Fax 66 0 2256 7711 Corporate Affairs ext. 9535, 9509 Department E-mail : [email protected] Website : www.sec.or.th

Regulator The Stock Exchange of Thailand The Stock Exchange of Thailand Building, 62 Ratchadaphisek Road, Klongtoey, Bangkok 10110, Thailand Tel. 66 0 2229 2000, 66 0 2654 5656 Fax 66 0 2229 2030, 66 0 2654 5649 S-E-T Call Center 66 0 2229 2222 E-mail : [email protected] Website : www.set.or.th

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

Auditor 1. Ms. Nangnoi Charoenthaveesub Certified Public Accountant (Thailand) No. 3044 2. Mr. Prasan Chuaphanich Certified Public Accountant (Thailand) No. 3051 3. Mr. Vichien Khingmontri Certified Public Accountant (Thailand) No. 3977 PricewaterhouseCoopers ABAS Limited 15th Floor, Bangkok City Tower, 179/74-80 South Sathorn Road, Bangkok 10120, Thailand Tel. 66 0 2286 9999, 66 0 2344 1000 Fax 66 0 2286 5050

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Topics Page No.

(This is prepared in accordance with the notice of the Securities and Exchange Commission no. Kor Jor 40/2540 re : Criteria and Conditions of Information Disclosure on financial status and operation performance of Listed Company)

1. General Information 218

2. Financial Summary 24

3. Business Characteristics

Business Operation 63

Revenue Structure 69

Industrial trend and Competition 70

4. Risk Factors 130

5. Shareholding and Management Structure

Shareholder 72

Management Structure 73

Director and Management Selection 84

Remuneration 86

Good Corporate Governance Report 93

Inside Information 98

Internal Control 127

6. Related Transaction 142

7. Management Discussion and Analysis 135

8. Financial Statements

Financial Statement 153

Audit Fee 216

Index of articles required for the 56-2 form

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Glossary

1. Companies

EGCO Electricity Generating Public Company Limited

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

AE Agro Energy Company Limited

APMC Alto Power Management Corporation

BLCP BLCP Power Limited

BV New Growth B.V.

Conal Conal Holdings Corporation

Coop New Growth Cooperatief U.A.

CPOI Covanta Philippines Operating Inc.

Chaiyaphum Chaiyaphum Wind Farm Company Limited

DGA Diamond Generating Asia, Limited

East Water Eastern Water Resources Development and Management Public Company Limited

EGAT Electricity Generating Authority of Thailand

EGCO BVI EGCO International (BVI) Limited

EGCO Cogen EGCO Cogeneration Company Limited

EGCO Green EGCO Green Energy Company Limited

Egcom Tara Egcom Tara Company Limited

ESCO EGCO Engineering and Service Company Limited

GCC Gulf Cogeneration Company Limited

GEC Gulf Electric Public Company Limited

GECC General Electric Capital Corporation

GEN Gulf Energy Company Limited

GIPP Gulf IPP Company Limited

GPG Gulf Power Generation Company Limited

GPIQ GPI Quezon Company Limited

GYG Gulf Yala Green Company Limited

KEGCO Khanom Electricity Generating Company Limited

NED Natural Energy Development Company Limited

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NED Wind NED Wind Company Limited

NKCC Nong Khae Cogeneration Company Limited

NMPC Northern Mindanao Power Corporation

NTPC Nam Theun 2 Power Company Limited

North Pole North Pole Investment Company Limited

OneEnergy OneEnergy Thailand Limited

OPDCI Ogden Power Development Cayman Inc.

PEPOI Pearl Energy Philippines Operating Inc.

PGS Power Generation Services Company Limited

Quezon Quezon Power (Philippines) Limited Company

REGCO Rayong Electricity Generating Company Limited

Roi-Et Green Roi-Et Green Company Limited

SCC Samutprakarn Cogeneration Company Limited

SPPC Southern Philippines Power Corporation

TEPDIA TEPDIA Generating B.V.

Theppana Theppana Wind Farm Company Limited

WMPC Western Mindanao Power Corporation

XPCL Xayaburi Power Company Limited

2. Government Organizations

EPPO Energy Policy and Planning Office

ERC Energy Regulatory Commission

NEPC National Energy Policy Council

PWA Provincial Waterworks Authority

SEC Securities and Exchange Commission, Thailand

SET Stock Exchange of Thailand

3. Other Institutions

IOD Thai Institute of Directors

JBIC Japan Bank for International Corporation

COSO The Committee of Sponsoring Organizations of the Treadway Commission

4. Technical Terms

Associated Company A firm is an associated company if :

A) listed company or its subsidiaries hold 20.00% (twenty percent) or more, but not more than 50.00% (fifty percent) of its overall voting stock.

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B) A listed company or its subsidiary has influence, but not controlling power, over its monetary and operational policies. (The company is not deemed to be a subsidiary or joint venture.)

Shareholdings referred to above include those held by related persons.

Controlling Person This is a shareholder or a person who, through their behavior, can significantly influence the policy, management and operations of a listed firm. This is irrespective of the source of their authority : through their rights, contracts, or any others.

Specially, a “controlling person” includes, but is not limited to, one who :

A) Has direct or indirect voted exceeding 25.00% (twenty-five percent) of the total company votes.

B) Through their behavior, has control over the appointment or removal of company directors.

C) Through their behavior, has de facto control or undue influence over policy, controlling those company members authorized to determine management and operational policies.

D) Through their behavior, acts or has the power to act in the same manner as the company management. This includes those who hold other positions in the company, but are able to act in the same manner as the company management.

IPP Independent Power Producer

Major Shareholder Such person is a one whose holding in a listed firm exceeds 10.00% (ten percent) of the listed company’s overall voting stock.

PDP Power Development Plan

SPP Small Power Producer

Subsidiary Company Is :

A) A company that a listed company holds over 50.00% (fifty percent) of its total voting stock.

B) A company that the company referred to in (A) holds over 50.00% (fifty percent) of its total voting stock.

C) A company that is held by another company in a chain of ownership, no matter how many number in the chain, ending with the company referred to in (B) and

D) A company that the company referred to in (A), (B), or (C) hold over 50.00% (fifty percent) of its overall voting stock, either directly or indirectly.

E) A company that the company referred to in (A), (B), (C), or (D) have controlling power over its monetary and operational policies, and are able to direct and gain interest on its activities.

The holding of (A), (B), (C), or (D) is included those held by related persons.

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