TTW Public Company Limited Delivering Quality Water Annual Report and Quality of Life for a Sustainable Future 2020 WATER Our business operations are water management under high quality international standard; cleanliness, sufficiency and continuity; and waste water treatment. ENERGY We are aware of alternative environmental friendly technology; be solar energy, wind energy and biomass energy, as sustainably renewable energy and environmental conservation. ENVIRONMENT Our business operation is environmental friendly, being fully aware of environmental problems with effective planning and control of the use of natural resources. TTW Public Company Limited 3 Contents Vision To be Thailand’s leading company in Water, Energy Mission and Eco-Friendly Businesses. 006 To grow on a firm, continuous and Significant Financial Information sustainable basis in order to accomplish 008 Management and our vision through the balance of Message from the Chairman Corporate Governacce interests among customers, employees, of the Board of Directors 056 business partners, shareholders, Information on Securities and Shareholders communities and environments. 010 Report of the Audit Committee 062 011 Management Structure Report of the Nomination and Remuneration Committee 089 Corporate Governance 012 Report of the Risk Management and 127 Corporate Governance Committee Corporate Social Responsibility 013 Board of Directors Internal Control 021 132 Management Internal Control and Risk Management 132 Business Operations Related Party Transactions 028 138 Business Policy and Overview Financial Position and Operational Results Corporate Values 034 144 Nature of Business Management Discussion and Analysis Running business to fulfill our vision and mission on the basis of sharing 049 150 Risk Factors Report of the Board of Directors highest satisfaction and benefits Responsibility towards Financial among stakeholders by means of: 050 Continuous Improvement Assets for Business Operations 151 Financial Statements Proactive & Initiative 052 Teamwork General Information and Other significant information 4 Annual Report 2020 Contents Vision To be Thailand’s leading company in Water, Energy Mission and Eco-Friendly Businesses. 006 To grow on a firm, continuous and Significant Financial Information sustainable basis in order to accomplish 008 Management and our vision through the balance of Message from the Chairman Corporate Governacce interests among customers, employees, of the Board of Directors 056 business partners, shareholders, Information on Securities and Shareholders communities and environments. 010 Report of the Audit Committee 062 011 Management Structure Report of the Nomination and Remuneration Committee 089 Corporate Governance 012 Report of the Risk Management and 127 Corporate Governance Committee Corporate Social Responsibility 013 Board of Directors Internal Control 021 132 Management Internal Control and Risk Management 132 Business Operations Related Party Transactions 028 138 Business Policy and Overview Financial Position and Operational Results Corporate Values 034 144 Nature of Business Management Discussion and Analysis Running business to fulfill our vision and mission on the basis of sharing 049 150 Risk Factors Report of the Board of Directors highest satisfaction and benefits Responsibility towards Financial among stakeholders by means of: 050 Continuous Improvement Assets for Business Operations 151 Financial Statements Proactive & Initiative 052 Teamwork General Information and Other significant information TTW Public Company Limited 5 Significant Financial Information Consolidated financial statements 22,842 2020 2,972 2020 23,158 2019 3,147 2019 Total assets Net profit (Unit : Million Baht) (Unit : Million Baht) 23,330 2,861 2018 2018 30,000 3500 2,972 3,147 3000 2,861 25000 22,842 23,158 23,330 2,861 2500 20,000 2000 15000 1500 10,000 1000 5000 Total assets Net profit 500 nit illion at 0 nit illion at 0 2020 2019 2018 2020 2019 2018 12000 10,965 10,033 10,000 9,143 8000 6000 3.43 3.29 4000 2020 2019 Total Liabilities 2000 Book value nit illion at 0 per share 3.10 2020 2019 2018 at ae 2018 15000 13,699 13,125 12,365 12000 9,000 0.74 0.78 6000 2020 2019 Shareholders' Basic earnings 3000 per share equity 0.71 nit illion at at ae 0 2018 2020 2019 2018 6 Annual Report 2020 Significant Financial Information (Unit : Million Baht) Consolidated financial statements Separate financial statements Description For the year ended 31 December For the year ended 31 December 2020 2019 2018 2020 2019 2018 Total assets 22,842 23,158 23,330 20,720 21,175 21,664 Total Liabilities 9,143 10,033 10,965 8,914 9,826 10,776 Shareholders’ equity 13,699 13,125 12,365 11,806 11,349 10,888 Sales of treated water 6,059 5,993 5,807 4,090 4,096 3,975 Services income 120 119 118 40 44 42 Total revenues 6,193 6,166 5,949 5,181 5,193 5,004 Cost of sales and services 1,862 1,795 1,722 1,061 1,025 1,011 Administration and Management expenses 264 252 280 225 208 230 Financial expenses 274 305 372 274 305 372 Income tax expenses 685 697 616 509 523 450 Gross margin 4,318 4,317 4,203 3,070 3,115 3,006 Net profit 2,972 3,147 2,861 2,850 2,855 2,667 Book value per share (Baht / share) 3.43 3.29 3.10 2.96 2.84 2.73 Basic earnings per share (Baht / share) 0.74 0.78 0.71 0.71 0.72 0.67 Financial Ratio Consolidated financial statements Separate financial statements Description For the year ended 31 December For the year ended 31 December 2020 2019 2018 2020 2019 2018 Profitability ratio Gross profit margin (%) 69.87 70.64 70.94 74.32 75.23 74.83 Net profit margin (%) 47.91 51.05 48.09 54.89 54.98 53.29 Return on equity (%) 22.16 23.98 23.14 24.62 25.16 24.49 Efficiency ratio Return on assets (%) 12.92 13.59 12.26 13.61 13.48 12.31 Return on fixed assets (%) 22.63 23.40 19.86 26.02 25.79 23.24 Debt service coverage ratio Debt to equity (times) 0.67 0.76 0.89 0.76 0.87 0.99 Dividend Yield (%) 80.54 76.06 83.68 83.97 83.86 89.76 TTW Public Company Limited 7 Message from the Chairman of the Board of Directors In this new year of 2021, we look forward to another challenging twelve months for TTW, due to both the impacts of the Covid-19 pandemic and the fragile, unexpected, and fluctuating political and social factors all around us. However, with the amazing potentiality, determination, and dedication of our Company in operating our business according to our stated mission to “grow on a firm, continuous and sustainable basis in order to accomplish our vision through the balance of customers, employees, business partners, shareholders, communities and environments,” I am confident that 2021 will be yet another year of steady, sustainable forward progress. Dr. Thanong Bidaya Chairman of the Board of Directors 8 Annual Report 2020 In 2020, for the whole year, we faced the challenges In this new year of 2021, we look forward to another of the Covid-19 pandemic. While Thailand did a good job challenging twelve months for TTW, due to both the impacts of controlling the situation to a certain extent and remedial of the Covid-19 pandemic and the fragile, unexpected, and measures were put forth by the government throughout the fluctuating political and social factors all around us. year in its efforts to limit the overall damage to the nation, However, with the amazing potentiality, determination, and the situation remained extremly challenging for the economic dedication of our Company in operating our business In this new year of 2021, we look sector, the tourism industry, and even small and medium-sized according to our stated mission to “grow on a firm, forward to another challenging twelve months for TTW, due to enterprises (SMEs). continuous and sustainable basis in order to accomplish both the impacts of the Covid-19 For TTW, our stable business structure and systems, our vision through the balance of customers, employees, pandemic and the fragile, as well as the strict implementation of Business Continuity business partners, shareholders, communities and unexpected, and fluctuating political Planning (BCP) and stringent preventative measures, have environments,” I am confident that 2021 will be yet another and social factors all around us. enabled us to continue to supply suitable quality tap water year of steady, sustainable forward progress. However, with the amazing to water users in all sectors. In particular, risk was mitigated On behalf of the Board of Directors, management and potentiality, determination, and by increasing our reserves of raw materials and necessary employees of TTW Public Company (Limited), I would like dedication of our Company in spare parts for the tap water production process in order to to thank our shareholders, business partners, affiliates, operating our business according ensure continuous operations. As a result, performance for communities, and supporters in all sectors for your trust and to our stated mission to “grow on a firm, continuous and sustainable the past year has been satisfactory. support of the company’s operations at all times. In closing, basis in order to accomplish our On the financial side, the Company has put aside cash we wish you protection from the spread of Covid-19 so that vision through the balance of reserves in order to reduce risk from emergency situations you, your families, and the nation as a whole can continue customers, employees, business or lack of liquidity and has taken steps to reduce any to move forward together. partners, shareholders, communities unnecessary costs and expenses. The Company has also and environments,” I am confident decreased its energy consumption in production processes that 2021 will be yet another year and in every office building while also increasing the of steady, sustainable forward proportion of electricity used from alternative energy progress.