Thailand EGAT Annual Report 2016

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Thailand EGAT Annual Report 2016 Content 2 Vision and Mission Statement 68 Executives 4 About EGAT 78 Corporate Governance 5 Financial Overview 81 Official Information Act Compliance Report 8 Message from the Chairman 83 Power Development and Future Plan 10 Report of the Audit Committee 95 Organization and Human Resource 12 Economic and Electricity Overview Development 14 Operations 97 Corporate Social Responsibility 24 Nature of Business of EGAT and Affiliates 108 Events 30 Analysis of Operating Results and Financial 114 Key Statistical Data Position 120 Auditor’s Report 38 Enterprise Risk Management 123 Financial Statements 44 Organization Chart 208 Audit Fee 45 Structure of Organizational Management 58 Board of Directors 2 Vision “Being a world-class organization in electricity business” EGAT aims to achieve excellence in all areas and to be comparatively among the global top quartile in electricity. Being a leading organization, EGAT targets to be an organization of: orporat forman eration ationa inancia C e er c p a N l F l P e O l GOOD HIGH EXCELLENCE PRIDE VIABILITY G O O e r n l o c g io p a N l Fi l vernan anizat eration ationa nancia 1. Good corporate governance 4. National pride 2. High performance organization 5. Financial viability 3. Operational excellence Mission • To generate, acquire, supply or sell electricity • To conduct electricity-related businesses and other businesses related to EGAT’s activities including production and sale of lignite according to the EGAT Act B.E. 2511 (1968) (Amended in B.E. 2535) (1992) 3 Core Culture Loyalty, Excellence, Integrity Corporate Value F : Fairness I : Integrity R : Responsibility & Accountability M : Mutual Respect C : Commitment to Continuous Improvement and Teamwork Strategic Objectives To achieve its vision, EGAT’s strategic objectives are as follows: 1. Strengthening the efficiency of the core business to be at the global top quartile level 2. Growing in electricity business 3. Being the national pride 4. Supporting the sustainable growth of the organization 4 About EGAT The Electricity Generating Authority of Regulatory Commission, EGAT is the producer and Thailand (EGAT) was established by virtue of the supplier of electricity and controls over the electricity EGAT Act B.E. 2511 (1968) on May 1, 1969. Being production and distribution throughout the country to a state enterprise in the area of energy under the be efficient and adequate for the demand in parallel Ministry of Energy with the Ministry of Finance as with environmental management for the community major shareholder, EGAT is responsible for generating, and society. acquiring, and supplying electricity to the Metropolitan Electricity Authority (MEA), Provincial Electricity EGAT Headquarters is situated at No. 53, Authority (PEA), legal power users, and neighboring Moo 2, Charansanitwong Road, Bang Kruai District, countries such as Malaysia. EGAT is also responsible Nonthaburi Province 11130. The Transmission System for power related activities and service, producing and Operation has 5 offices. Two are in Nonthaburi Province, selling lignite and its by-products under the EGAT Act and the rest are in Phitsanulok, Khon Kaen, and Krabi B.E. 2511 (1968) and its amendment B.E. 2535 (1992). Provinces. At present, the operation of EGAT is in accordance with the Electricity Supply Industry whereby, under the supervision of the Energy 5 Financial Overview Unit : Million Baht 2016 2015 2014 (Adjusted) (Adjusted) Operating Performance Revenues from sales and services 496,883.00 546,480.33 557,080.18 Income from sales and services 79,338.68 72,166.45 60,848.68 Gains (Losses) on foreign exchange 1,201.99 (11,996.27) 774.21 Finance costs 41,700.70 31,685.73 25,679.05 Net income - EGAT and its subsidiaries 43,866.68 31,270.42 39,162.18 Net income - Non-controlling interests 3,336.72 1,579.00 3,321.54 Financial Position Total assets 956,547.31 876,492.83 734,965.04 Property, plant and equipment - net 276,496.24 273,251.44 259,020.27 Total liabilities 555,623.83 495,819.65 362,101.69 Long - term loans 75,906.32 75,816.28 81,874.41 Owners' equity and non-controlling interests 400,923.48 380,673.19 372,863.35 Financial Ratios Gross profit to net sales (percentage) 19.28 16.29 13.99 Net profit to net sales (percentage) 9.50 5.99 7.63 Return on total assets (percentage) 5.15 4.07 5.89 Debt to equity ratio (time) 1.39 1.30 0.97 Time interest earned (time) 2.15 2.08 2.70 Remark * Financial ratios for the years 2016, 2015 and 2014 are calculated from the financial statements prepared in accordance with Financial Reporting Interpretations No. 4 and Accounting Standard No. 17. The guiding light of the Thai people The contribution of His Majesty King Bhumibol Adulyadej to the Thai people has brought great prosperity to the country. The first project, Bhumibol Dam, was the multipurpose project which has largely benefited irrigation, agriculture, electricity, communication, and others. The dam has also originated the Electricity Generating Authority of Thailand (EGAT). 8 Message from the Chairman Thailand in the year 2016 suffered a great loss from the passing of His Majesty King Bhumibol Adulyadej. All Thai people mourn the passing of our beloved monarch whom we give high reverence. His Majesty King Bhumibol Adulyadej was the EGAT is grateful for the benevolence of His soul of nation. Throughout 70 years of his reign, His Majesty King Bhumibol Adulyadej, His Majesty King Majesty performed a lot of royal duties. Among these Maha Vajiralongkorn Bodindradebayavarangkun, and were his countless visits to various villages in remote the royal family graciously extended to EGAT in various areas all over the country. With great concern about the occasions including the inauguration of EGAT’s dams well-being of his subjects particularly the problem of and power plants and the names granted to EGAT’s insufficient water resource for farmers which were the dams. Such benevolence will be an encouragement majority of the people, His Majesty gave an initiative in for EGAT in performing its mission with utmost effort making use of the water resource and the by-product for the benefit of the people. in electricity generation. From this initiative, a large number of royal initiated projects on water resource In 2016, EGAT has implemented the project development and electricity generation have been in and conducted activities on the royal contributions to existence throughout the country. EGAT was honored the country of His Majesty King Bhumibol comprising to take part in the construction of dams and reservoirs 9 areas namely 1) Sustainable country development of several projects. 2) Invention and innovation 3) Forest and water conservation 4) Sufficiency and overcoming poverty 5) His Majesty also gave importance to forest Farmers care 6) Education 7) Saving 8) Dedication and resource by conserving the fertility of the upstream donation 9) Promoting good people. The activities have forest, forest restoration, and reforestation. Focus was been held with participation of all sectors in EGAT’s given to natural reforestation together with planned sites across the country and will last until 2017. reforestation. Responding to the royal initiative, EGAT has prepared and implemented several reforestation For EGAT’s operation in 2016, EGAT was projects since 1994. Presently, the total number of the successful in supplying sufficient electricity to meet planted trees which have survived and grown is more the power demand. The overall net peak demand of than 80 million covering an area of over 460,000 rai. EGAT power system was 29,618.80 MW representing an increase of 2,273.00 MW or 8.31 percent of the previous Based on His Majesty’s “Sufficiency Economy” year. The total net energy generation requirement of philosophy, EGAT has implemented a project on EGAT system in 2016 was 188,999.64 million kilowatt- “Biological Way of Life for Sustainable Development” hours (kWh) or an increase of 3.02 percent. The main with the objective of developing the quality of life of contributor to the increasing demand for power was the communities around EGAT’s power plants, dams, a continual growth of the household expense and the and transmission lines. From 1999 until today, there public investment, whereas the export of services and are 32 model communities countrywide which serve goods had a rebound growth. as learning centers and activities concerning the implementation of His Majesty’s philosophy for the In 2016, the country’s power system had a benefit of individual and entire community. total installed generating capacity of 41,556.25 MW, 7 percent higher than the prior year comprising Amidst the grief of the kingdom, it was a 16,385.13 MW from EGAT’s power plants contributing delight for the Thai people when Crown Prince Maha to 39.43 percent of the system and 25,171.12 MW Vajiralongkorn accepted the enthronement as the from independent power producers (IPPs), small tenth monarch of the Chakri dynasty. To the invitation power producers (SPPs), and import from neighboring of President of the National Legislative Assembly for countries accounting for 60.57 percent of the system. the enthronement, the Crown Prince affirmed that he would “fulfill the wish of His Majesty King Bhumibol and In power generation, electricity of 67,765.92 for the benefits of the Thai people” and would maintain million kWh was from EGAT’s power plants representing “the royal knowledge” of the King Father for the best 35.86 percent and electricity purchased from private interest of the Kingdom. power producers and abroad was 121,233.72 million kWh representing 64.14 percent. The country’s energy 9 mix for electricity generation included 66.00 percent the Office of the Vocational Education Commission.
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