“Caring” Embraces Commitment and Responsibility

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“Caring” Embraces Commitment and Responsibility “Caring” embraces Commitment and Responsibility. EGAT makes it a top priority policy to run business and operations with full responsibility and accountability to all stakeholders, especially community, society and environment, throughout the processes in all of our operations. All of EGAT people are individually accountable for ethical conducts and strictly following all applicable laws and regulations with the ultimate aim of community and public satisfactions. “Caring” embraces Commitment. Because we CARE, EGAT is committed to strengthening Thailand’s power supply system by carefully planning and acquiring long-term dependable power sources and fuels, as well as generating and transmitting electricity to meet the country’s needs with efficiency and reliability at a reasonable price. Commitment to Strengthening Power Security “Caring” embraces Honesty. EGAT places an emphasis on social and environmental management to achieve sustainable development by strictly complying with all environmental regulations and laws throughout its development and operational processes - from the early stage of project planning and design as well as during the construction and operation of the projects. More importantly, public involvement processes are integrated into all phases of the projects in the form of community and public consultations, project monitoring, etc. to attend to and incorporate the public and community views, concerns and issues in the development processes with the aim of creating better understanding as well as community trust and acceptance. Commitment to Healthy Community and Environment “Caring” embraces Compliance. EGAT has continuously improved its operational and environmental management processes. All of our power plants and associated facilities have adopted quality management and environmental management systems certified by international standards to efficiently prevent, monitor and control environmental impacts caused by our operational processes to strictly comply with all applicable environmental regulatory standards in all aspects, such as air quality, water quality, noise level, community opinions, etc. Commitment to Environmentally-Sound Operation and Quality Control “Caring” embraces Concern. EGAT cares for the future. We have been strengthening research and development on advanced power technologies which are more efficient and friendly to the environment in order to achieve sustainable energy for future needs. Commitment to Continuous Technology Development “Caring” creates long-lasting Friendship. Not only do EGAT’s power plants provide the needed electricity for the whole country, but as a member of the communities, we are constantly committed to environmentally safe and clean operations and working together with the local people to develop the communities where we work, with an ultimate goal to bring happiness to all Thais. Commitment to Happy Thai Society 12 Vision To be a world-class organization in electricity business Mission To generate, acquire, transmit and sell electric energy; conduct electricity related businesses and other businesses related to EGAT’s activities including produc- tion and sale of lignite and lignite byproducts. Core Culture Loyalty Excellence Integrity Strategic Direction • Strengthening core businesses • Building growth in related businesses • Being a caring organization with sound corporate governance and due care for society and environment • Being a dynamic, high performance organization 13 Financial Overview Unit : Million Baht 2011 2010 Operating Performance Revenues from sales and services 418,445.19 405,445.06 Income from sales and services 35,732.56 38,648.62 Gains (losses) on foreign exchange (355.79) 910.36 Interest expenses 5,424.38 4,457.36 Net income - EGAT 31,818.73 36,955.67 Net income - minority interest 2,426.04 2,863.18 Financial Status Total assets 495,534.27 469,680.82 Land, buildings and equipment - net 273,536.47 263,009.39 Total liabilities 193,204.49 185,006.40 Long-term debts 84,591.84 82,905.92 Equity and minority interest 302,329.77 284,674.41 Financial Ratios Ratio of gross profit to net sales (%) 12.45 13.37 Ratio of net profit to net sales (%) 7.60 9.11 Rate of return on assets (%) 6.59 7.83 Debt to equity ratio (Times) 0.64 0.65 Time interest earned (Times) 7.65 10.22 14 Message from Chairman As the country development grows, the way and quality of life of people are increasingly dependent on electricity. Today, electricity consumption accounts for approximately one-third of the global energy consumption and tends to grow higher. Energy security and sustainability has therefore been considered one among national key strategies of most countries. Lessons learned from the past global energy crises as well as natural disasters and power plant accidents have stimulated greater awareness among various countries of new energy options to ensure energy security. Among major strategies adopted by many countries, especially countries in EU and North America is the interconnection of transmission grids for energy trade and exchange among countries within a region. Likewise, ASEAN member countries have been preparing to move toward an ASEAN One Com- munity by the year 2015 as espoused in the ASEAN Vision 2020. The ASEAN Vision 2020 also features two main schemes, namely the ASEAN Power Grid and the Trans-ASEAN Gas Pipeline (TAGP). The interconnection of electricity grids among member countries or the ASEAN Power Grid will en- hance energy reliability and power quality region-wide and will provide the ASEAN population of over 560 million with more access to electricity resources, especially for millions of those who presently live in remote areas without electricity. The interconnection will enable each member country to share generation reserve margins and thus saving substantial capital investment for building their own generating facilities. This will also contribute to sustainable production and consumption of regional energy resources. However, due to the diverse socio-economy, power and transmission systems as well as geographical differences among ASEAN countries, the establishment of the ASEAN Power Grid may take more time to be realized than the power pool in EU. A concerted effort and close cooperation of all member countries will be required to address confronting problems in order to achieve the set common goal. Strategically situated in the heart of the region, Thailand will significantly benefit from the ASEAN Power Grid. Yet interconnection arrangements have to be further implemented, such as the development of smart grid infrastructure to improve efficiency and communications and reduce system line loss. This will also contribute to greater opportunities and values from the grid interconnection and its readiness for the integrated ASEAN Economic Community with free flows of open trade and investment. On the other hand, too heavy reliance on imported electricity or any single energy option might also pose higher risks on the country’s security of energy supply. The planning of the national energy future therefore has to be well-balanced and based on diverse energy resources. The 2011 Fukushima nuclear power accident has unavoidably affected public trust in nuclear power projects in Thailand and many other countries. EGAT had to consider an alternative power development plan by adding more power capacities from natural gas and coal fired power projects. It also has closely observed rapid changes of the global energy situations to be able to adapt its strategies appropriately. Thailand’s electricity situations in 2011 had been affected by the global economy as well as natu- ral disasters. Following the great earthquake and Tsunami disaster in Japan, the manufacturing sector in Thailand had been halted by the shortage of raw materials from Japan. In addition, the severe flood disasters in key economic areas including Bangkok and several provinces in the central region had inter- rupted the supply chain of major industries and thus caused severe damages to major industrial estates and factories. As a result, the country’s electricity demand in 2011 barely changed from the preceding year. The electricity growth is however estimated to rebound in 2012 as driven by the accelerating public consumption and investment as well as the growing demand in the industrial and service sectors resulting from recovery measures and processes after the flood disaster. For EGAT’s operation in 2011, EGAT has successfully maintained its high quality power supply ser- vice. In 2011, the country’s total installed generating capacity increased only 1.70 percent from the previ- ous year to 31,446.72 megawatts (MW), consisting of 14,998.13 MW or 47.69 percent from EGAT’s power plants and 16,448.59 MW or 52.31 percent from private power plants and power imported from neighboring 15 countries. Compared with the year 2010, the power capacity of EGAT’s own generation fleet remained the same whereas the private sector power capacity increased 3.31 percent. The country’s gross energy generation and purchase decreased 0.77 percent from the prior year to 158,963.30 million kilowatt- hours (kWh), comprising 70,467.26 million kWh or 44.33 percent from EGAT’s generating facilities and 88,496.04 million kWh or 55.67 percent purchased from private power producers and neighboring countries. The country’s energy mix for electric- ity generation included 67.03 percent from natural gas, 18.65 percent from coal, 5.00 percent from hydropower, 1.44 percent from renewable energy,
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