Table of Contents 003 Vision, Mission, Core Values, Corporate Culture and Employee Culture 004 Message from the Chairman 006 Financial Highlights 007 Policy and Business Overview 007 I Vision, Mission, Objectives and Goals, and Business Strategies 012 I Shareholding Structure 017 I Transition and Milestone Development 020 I Awards of 2018 026 Business Description 026 I Revenue Structure 027 I Product and Service Features 035 I Marketing and Competition 042 Shareholder Structure 045 Management Structure 072 I Board of Directors 080 I Executive Management 090 Corporate Governance 102 I Report of the Audit Committee 104 I Report of the Corporate Governance Committee 106 I Report of the Nomination and Remuneration Committee 108 I Report of the Enterprise - wide Risk Management Committee 110 I Changes in the Securities Portfolios of Directors and Executives 111 Bangchak and Sustainability 113 Internal Control 116 Risk Management 121 Connected Transactions 132 Financial Status and Operational Results 132 I Management Discussion and Analysis of Business Operation 162 I Declaration of the Directors' Reponsibility for the Financial Statements 163 I Independent Auditor's Report 169 I Financial Statements 180 I Notes to the Financial Statements 262 General and Other Key Information 262 I Company Information 266 I Reference Persons Vision : Mission : BCP commits in bringing Disruptive and Inclusive Greenovation to Delight our customers, being a trusted partner and Value Creator for all Stakeholders, and promoting Sustainable Development to Society. We emphasize Inclusive and Sustainable business, pursue Domestic and Overseas expansion, embrace Good Corporate Governance principles, and nurture a High- performance, Learning culture and Happy workplace. Core Values : Innovation Agility & Mobility Beyond Continuous Pursuit of Expectation Development Sustainability Corporate Culture : Sustainable Innovative Business Development in Harmony with the Environment and Society Employee Culture : To be virtuous, knowledgeable, and contributive to others Bangchak Corporation Public Company Limited 003 "BCP Group pledge our commitment to being a valued organization in Thai society" 004 Annual Report 2018 Message from the Chairman This year has been yet another one of pride and success and invest in startups to align with social and economic for Bangchak Corporation in its more than three decades of changes of the Thailand 4.0 age. Notably, we are geared up existence, for we still value sustainable business development for investment in the EEC (Eastern Economic Corridor) to in parallel with environmental stewardship and participation in eventually become the leading Asian Greenovation Group, improving lives for Thai society in keeping with the corporate founded on good corporate governance through inclusiveness mission. At the same time, we strive to develop clean energy and sustainability—true to our vision. technological innovations, harnessing green innovations to drive each business of ours while staying committed to striking Our group values the development of employees’ potential a balance between value and virtue. Out of responsibility to and expertise, with emphasis on their being smart and all stakeholders, we take most seriously the environment conscientious, and strives to enhance their significance and and safety. value under the “I AM BCP” value. For we believe that it is important—indeed the key factor—that through outstanding This year the Company posted a net profit attributable to competencies and career growth, we will make a great stride the owners of the Company of Baht 2.463 billion (Baht 1.79 toward excellence. per share). The Refinery Business posted an average annual refining capacity in 2018 was 115 KBD as planned, excluding Innovation Agility & Mobility Beyond Continuous Pursuit of the annual shutdown period; in March we topped the previous Expectation Development Sustainability monthly throughput record by averaging 123 KBD. Our Market- ing Business again saw Bangchak take the No. 2 market share All BCP Group stakeholders are to be saluted for these moves nationwide in sales volumes through service stations, thanks and successes. I am grateful to all parties’ support and to more Bangchak service stations and image revamping of encouragement for us to keep growing with great security major ones, the creation of the Greenovative Experience, and today and in future years. relentless growth of supplementary businesses for customers’ maximum satisfaction. As we enter our 35th year, BCP Group, the directors, management, and all employees pledge our commitment to As for other business units, strategies have been devised, being a valued organization entity in Thai society that is ready business restructuring have begun so as to prepare for to conduct businesses that are responsible to society, achieving long-term growth and strength, and competitiveness has a socio-economic-environmental balance, and executing been enhanced with a focus on producing green technology business management with corporate governance for a bright through modern energy innovations to extend our success. future with even greater business successes with positive Digital systems have enhanced our core business, power impacts on the world, society, and mankind. business, bio-based product business, and natural resources business. At the same time, we are poised to grow our core Let us take pride in our contribution together. and related businesses, pursue international capital sources, (Signed) Pichai Chunhavajira (Mr. Pichai Chunhavajira) Chairman Bangchak Corporation Public Company Limited 005 Financial Highlights Consolidated Financial Statements 2018 2017 2016 (Restate) Statement of Income (Million Baht) Sales and service revenue 192,025 172,138 144,705 Gross profit (loss) 11,431 13,543 11,896 EBITDA 1/ 10,201 13,421 11,363 Profit (loss) from futures crude and product Profit (loss) from futures crude and product contracts 442 366 107 Profit (loss) from foreign exchange and 577 664 276 futures foreign-currency trading Net profit 2/ 2,463 5,608 4,773 Statement of Financial Position (Million Baht) Total assets 117,369 113,869 101,783 Total liabilities 67,831 61,979 57,874 Shareholders’ equity 49,538 51,890 43,909 Share capital - Registered share capital 1,377 1,377 1,377 - Issued & fully paid-up share capital 1,377 1,377 1,377 Financial Ratios (%) EBITDA / sales and service revenue 5.31 7.80 7.85 Net profit / sales and service revenue 1.68 3.58 3.27 Rate of return on assets 4.56 7.10 7.51 Debt with interest payable to equity 3/ 0.94 0.79 0.86 Net IBD to Equity 3/ 0.70 0.59 0.38 Operating Outcomes (Baht per share) Net earnings per share 3/ 1.79 4.07 3.47 Book value per share 3/ 31.02 33.03 28.72 Remarks: 1/ EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization, gain/loss on foreign exchange, loss from impairment of assets 2/ Net profit (loss) of the owners of the parent 3/ Only the equity of the Company 006 Annual Report 2018 Policy and Business Overview Vision, Mission, Objectives and Goals, and Business Strategy Vision Evolving Greenovation To be the leading Asian Greenovation group, founded on good governance, through inclusiveness and sustainability Mission Bangchak is committed to bringing disruptive and inclusive Greenovation to delight our customers, being a trusted partner and value creator for all stakeholders, and promoting sustainable development of society. We emphasize inclusive and sustainable business, pursue domestic and overseas expansion, embrace good corporate governance principles, and nurture a high-performance organization, learning culture and happy workplace. Objectives and goals Bangchak is committed to its resolution of being a Thai energy firm that engages in business in parallel with its stewardship of the environment and society while striving for a balance between value and virtue, and taking part in the quality of life improvement for Thai society. Bangchak values sustainable growth for the organization; upgrading of its management excellence in pursuit of world standards; application of Sufficiency Economy to its businesses (for non-profiteering benefit); nurturing of growth and sustainability through the promotion and development of innovation and technology; due regard for conscientious consumption of natural resources; and managing businesses to achieve its vision. To be the leading Asian Greenovation Group together with its business, social, and environmental goals by 2023, as highlighted below. Business goals • Refinery and oil trading business group: To raise the refinery’s safety and environmental standards; to maximize its efficiency and stability through the YES-R Phase 1-3 Project, studies to extend TAM Cycle; to grow its capacity to over 133 KBD through the 3E Project (Efficiency, Energy, and Environment Improvement Project); to contract a consultant to run the Rocket project to improve refining operation in production (hydrocarbon units), energy, utilities, and auxiliary units, maintenance and reliability, planning and logistics, and crude and product trading; to arrange for flexible crude mix; and to venture into related businesses, including a plan to increase its oil trading volume through BCP Trading Pte. Ltd. (BCPT), founded in Singapore, to over 300 KBD within five years. Production (Hydrocarbon units) Energy, utilities, and auxiliary units Maintenance & Reliability Planning and logistics Crude and product trading Bangchak Corporation Public Company Limited 007 • Marketing business group: