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

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2018 marked the 18th

successful year of the Company’s energy business. We made steps forward so that we can become a leading value-oriented energy and infrastructure company in Asia-Pacific.

Dear all shareholders and stakeholders,

2018 marked the 18th successful year of the Company’s energy business. We made steps forward with our determination to further enhance internal and external competitiveness, so that we can become a leading value-oriented energy and infrastructure company in Asia-Pacific. Our strategy focuses on adding value by managing existing assets at their full potential, developing and seeking partners to expand investment in energy, infrastructure and related businesses. Our goal is to grow business and generate equitable returns to shareholders and stakeholders. We remain committed to operate with social and environmental responsibility and full compliance with relevant laws and regulations, in line with the national strategy to drive the country towards “stability, prosperity and sustainability”. We must speed up adjustments to grow our business amid disruptive technology. Our strategies, business direction and competitiveness enhancement were reviewed, along with the exploration of opportunities and new alternatives in energy and infrastructure businesses. We enhanced our competitiveness to achieve the High Performance Organization status and studied possibilities in investing in New S-Curve innovation-oriented industries which present an opportunity to grow our business and expand our business base. We have adhered to good corporate governance principles as well as social and environmental responsibility as we are convinced that they are the foundation of sustainable development.

In 2018, the Company witnessed success in energyrelated investment projects. We acquired the remaining 20 percent stake in RATCH-Australia Corporation Pty Ltd from its shareholder, Broadspectrum Pty Limited, in May 2018, to boost our stake to 100 percent. Our portfolio of commercially operating power plants and related businesses were expanded with Asahan-1 Hydroelectric Power Plant in the Republic of Indonesia, Mount Emerald Wind Farm, the system restart service of Kemerton Power Station in Australia, and the participation in Sandin Water Supply Project in Lao PDR. In 2018, the combined capacity of the Company’s commercially operating power plants totaled 6,863.25 MW equivalents. They are: 1) Domestic power plants namely Ratchaburi Power Plant, Tri-Energy Power Plant, Ratchaburi Power’s Power Plant, Ratchaburi World SPP Power Plant, Nava Nakorn SPP Power Plant, Solarta Solar Power Plant, Solar Power Korat 3, 4 and 7 Power Plants, Huay Bong 2 and 3 Wind-Turbine Power Plants and Songkhla Biomass Power Plant 2) International power plants namely Hongsa Thermal Power Plant and Nam Ngum 2 Hydroelectric Power Plant in Lao PDR as well as thermal power plants and wind farms in the Commonwealth of Australia. The Company also operated related businesses including the operation and maintenance services for power plants through Chubu Ratchaburi Electric Services Company Limited and RATCH-Lao Services Company Limited.

The Company’s power plants and related businesses under development and construction have combined installed capacity of 775.87 MW equivalents. These projects will gradually commence operations and generate revenue; 3 in 2019 which are Berkprai Cogeneration SPP Power Plant, Collinsville Solar Farm in the Commonwealth of Australia and Xe-Pian Xe-Namnoy Hydroelectric Power Plant in Lao PDR; 1 in 2020 which is Nava Nakorn SPP Power Plant (extension part); and 4 in 2021 which are Fangchenggang II Nuclear Power Plant in People’s Republic of China, Riau Combined-Cycle Power Plant in Republic of Indonesia, MRT Pink Line Project (Khae Rai-Min Buri) and MRT Yellow Line Project (Lat Phrao-Samrong).

Nevertheless, regarding Xe-Pian Xe-Namnoy Hydroelectric Power Plant in Lao PDR, we deeply regret for the incident in mid-2018 when the Saddle Dam D built to support water diversion around the Xe-Namnoy reservoir collapsed and water mass leaked from the downstream side of the dam to Xe-Pian River for around 5 kilometers, impacting the local communities and the areas surrounding downstream of Xe-Pian River that connects to Xe-Kong River. Initially, the Company and related agencies dispatched urgent assistance to ease the inconveniences of the victims and their families. Our high level executives and volunteering staff visited the site to show their moral support and extend further help which included a canteen for the victims and officers and coordinated with Lao PDR’s authorities on urgent assistance. The cause of the incident is being investigated by a committee established by the Lao government. The project is closely cooperating with Lao PDR’s responsible authorities to work out the technical, social and environmental restoration plan.

The Company continued posting satisfactory earnings in 2018. The consolidated revenue totaled Baht 45,083.54 million while the net profit was tuned at Baht 5,587.60 million, which is a decrease of Baht 450.95 million from the previous year, or equivalent to 7.50 percent, due to the effect of exchange rate. However, our strong financial position is still reflected by the credit ratings by TRIS Rating, S&P Global Ratings and Moody’s Investors Service which are maintained at “AAA”, “BBB+”, and “Baa1”, respectively. They are the same as the sovereign credit rating.

Regarding good corporate governance, the Company maintains its commitment in good corporate governance principles. We put emphasis on adding value in a sustainable way and operating with social and environmental responsibility, moral, ethics, integrity, transparency, zero corruption and equitable treatment of all stakeholders. Our commitment reflected in the annual assessment of listed companies’ good corporate governance in 2018, conducted by the Stock Exchange of Thailand in cooperation with the Office of Securities and Exchange Commission and Thai Institute of Directors Association. We achieved the score of 94 percent, higher than listed companies’ average score of 81 percent. We also received SustainabilityReport Award 2018 – Excellent, bestowed for 6 consecutive years by Thai Listed Companies Association’s CSR Club with support from the Office of the Securities and Exchange Commission and Thaipat Institute; Thailand Sustainability Investment 2018 by the Stock Exchange of Thailand for 4 consecutive years; Outstanding Booth Award for its presentation and services to the visitors of SET in the City Bangkok 2018; and Green Office Award 2018 – “Excellent” (Gold Level) from the Department of Environmental Quality Promotion, Ministry of Natural Resources and Environment.

On social and environmental responsibility, the Company adhered to fairness and responsibility for all dimensions of society and the environment. Corresponding to changes, we exercised our commitment through projects and activities including Love Forests and Community Project, the project that studies carbon storage and biodiversity in community forests; a community energy project; @CareLine Happy Community Network Project; Happy Elderly, Healthy Thailand Project; Pumaree – Women’s Power Protecting the Environment Project; employees volunteer activities; and Education for Career Empowerment Project in Lao PDR. These projects reflected our participation in solving or mitigating environmental and social problems in multi dimensions. They are geared towards energy conservation, efficient resources utilization, natural carbon storage through supports to community forests, reduction of global warming, improvement of the elderly’s quality of life, enhancement of the youth’s learning capacity and volunteering awareness among employees who should continuously perform public services as the country’s good citizens.

On behalf of the Board of Directors, the executives and the employees, I wish to express my appreciation to the shareholders and all stakeholders for your continuous support to the Company’s operations. We strongly believe that the operations under our pre-set strategies will enable the Company to grow and achieve our vision of being a leader in value-oriented energy and infrastructure company in Asia-Pacific in the near future.

(Mr. Sutat Patmasiriwat)
Chairman of the Board of Directors