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

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Dear shareholders and all stakeholders

The intense competition in 2016, global economic uncertainty and risks of exchange rate fluctuation and oil price sensitivity that may affect business growths are all great challenges for a business to maintain sustainable growth. The Company has continued our policy to operate business in accordance with the strategic plan focusing on increasing enterprise value and supporting national power security. We have not only directed its efforts to maximize efficiency in asset management and developing new power plants in different regions that is has already been operating but we also sought new partners to increase opportunity to invest in power plants in new markets. In addition, the Company plans to seek opportunities to invest in other related business to drive growth and business expansion in order to create added value to our shareholders.

At present, our electricity generating business continues to enjoy constant growth. The power plants that are operating commercially and generating major income are Ratchaburi Power Plant, Tri Energy Power Plant, Ratchaburi Power's Power Plant, Ratchaburi World SPP Power Plant, Nava Nakorn SPP Power Plant as well as Nam Ngum 2 Hydroelectric Power Plant, and Hongsa Thermal Power Plant in Lao PDR, power plants in Australia and other renewable energy power plants in which we have jointly invested. With the operations of those power plants, the Company's total attribution installed capacity is 6,442 MW and enjoyed the total income of Baht 50,485 million in 2016.

The Company has also accelerated construction projects to ensure that all plants make good progress as scheduled. Projects under development and construction, which have a total attribution installed capacity of 538 MW are, for example, Xe-Pian Xe-Namnoy Hydroelectric Power Plant in Lao PDR which is scheduled for completion and commercial operation commencement in 2019, the Mount Emerald Wind Farm in Australia with the schedule of completion and commercial operation in 2018 and Berkprai Cogeneration SPP Power Plant.

For new investment projects in 2016, it is noted that the economic growth in the region and the ASEAN Economic Community (AEC) integration have resulted in rising trend in electricity demand. The Company therefore focuses more on risk management when making business decision. In addition to economic situation, currency fluctuation and oil price sensitivity, the Company has added risk assessment for both macro level and project level into the list of factors to be closely monitored. The risk assessment tool at the project level is very crucial to control and limit the degree of risk at the acceptable level. We also consider project stability by focusing on projects with long-term power purchase agreement, which will enhance shareholders' confidence. With both commercially operating and developing power plant projects, the Company's total production capacity as of 31 December 2016 was 6,980 MW.

Considering increasing competition trend in the energy and electricity generating industry, the Company introduced a new policy in 2016 to expand and add value to its investment in infrastructure. The move also supports the government's policy in allowing the private sector to participate in the country's infrastructure development. The Company has partnered with BTS Group Holdings Public Company Limited and Sino-Thai Engineering & Construction Public Company Limited as "BSR Joint Venture" and participated in the bidding of the MRT Pink Line Project (Khae Rai-Min Buri) and the MRT Yellow Line Project (Lat Phrao-Samrong). Both projects are part of the rail system development master plan for Bangkok and suburban areas. The proposals were accepted by the Mass Rapid Transit Authority of Thailand as the best proposal. Currently, the project is in the negotiation process.

The overall performance in 2016 resulted in satisfactory profitability. This reflects the strength in our investment structure and financial position. The Company and subsidiaries have consolidated income of Baht 51,248 and profit for the year 2016 of Baht 6,166 million, 93.40 per cent increase from the previous year.

The Company has been operating its business by adhering to the good corporate governance principle, moral, ethics, integrity, transparency, responsibilities towards the society and environment and equitable treatment of stakeholders. With this commitment, the Company has participated and certified by the Collective Action Coalition against Corruption Council in 2016. The Company also received important awards from various organizations, including:

  1. Sustainability Report Award 2016 by CSR Club under the Thai Listed Company Association for the 4th consecutive year.
  2. Investors' Choice Award for the annual general shareholders' meeting assessment, with 100 full score for the 8th consecutive year.
  3. Rated "Excellent" for the corporate governance assessment for listed companies in 2016.

In terms of social and environmental responsibility, the Company continued all the projects, including Love Forest and Community Project; Happy Elderly, Healthy Thailand Project; Care@Line Happy Community Network Project, etc. These projects range from energy conservation and resource optimization to promoting community forest as the natural carbon sinks to reduce the impact from the Global Warming, quality of life enhancement for the elderly and awareness raising on health and safety among children.

On behalf of the Company's Board of Directors, the Management and employees, I wish to thank all shareholders and stakeholders for the great supports throughout these years. We are confident that the management under our strategic plan will enable us to grow and become the value-oriented integrated energy company in the Asia Pacific.

(Mr. Sutat Patmasiriwat)
Chairman of the Board of Directors
31 December 2016