Contents 5 Policy and Business Overview 7 Vision & Mission 8 Financial Highlights 10 Operational Results 12 Board of Directors’ Review 14 Chief Executive Officer Review 20 Key Financial Results 22 Summary of Major Changes and Development in the Past Year and Major Current Events 26 Banpu Group Structure 28 Organizational Structure 29 Management Structure 33 Marketing and Competition 46 Revenue Structure 47 Risk Management and Risk Factors 5 Policy and Business Overview 61 Internal Control Risk Management 7 Vision & Mission 64 Sustainable Development 8 Financial Highlights 69 Human Resources Management 10 Operational Results 74 Corporate Governance 12 Board of Director’s Review 92 Corporate Social Responsibility 14 Chief Executive Officer Review 99 Board of Directors and Management 20 Key Financial Results 112 Shareholding of the Board of Directors and Management 22 Summary of Major Changes and Developments in the Past Year 113 Remuneration in 2016 and Major Current Events 116 Major Shareholders 26 Banpu Group Structure 117 Dividend Policy 28 Organizational Structure 118 Connected Persons and Transactions 29 Management Structure 120 Other References 33 Maketing and Competition 121 Detail of the Company, Its Subsidiaries and Associated Companies 46 Revenue Structure and Joint Ventures 47 Risk Management and Risk Factors Additional information is available in the Annual Registration Statement (Form 56-1) posted on www.set.or.th or www.banpu.com. Policy and Business Overview Banpu Public Company Limited was incorporated on 16 May 1983 with the name ‘Ban Pu Coal Company Limited’ with THB 25 million registered capital. The Company was founded by members of the Vongkusolkit and Auapinyakul families in order to sub-contract a coal mining operation at Banpu Mine (BP-1 Mine) located in Li District, Lamphun Province from Department of Alternative Energy Development and Efficiency. On 4 May 1989, Banpu was listed in the Stock Exchange of Thailand (SET). The Company was later converted into a public limited company on 29 July 1993 and named “Banpu Public Company Limited.” Banpu went on to expand its coal operations both in Thailand and Indonesia to produce and sell coal locally and overseas. Aside from producing and distributing coal, the Company entered other business areas, including removing overburden and coal for the Electricity Generating Authority of Thailand (the contract ended in September 2001), producing and selling 5 Annual Report 2016 Banpu Public Company Limited Policy and Business Overview Banpu Public Company Limited was incorporated on 16 May 1983 with the name ‘Ban Pu Coal Company Limited’ with THB 25 million registered capital. The Company was founded by members of the Vongkusolkit and Auapinyakul families in order to sub-contract a coal mining operation at Banpu Mine (BP-1 Mine) located in Li District, Lamphun Province from Department of Alternative Energy Development and Efficiency. On 4 May 1989, Banpu was listed in the Stock Exchange industrial minerals, operating a port business (Banpu of Thailand (SET). The Company was later converted subsequently sold both the port and the industrial into a public limited company on 29 July 1993 and mineral businesses), and investing in power and steam named “Banpu Public Company Limited.” generation and distribution business. Banpu went on to expand its coal operations both in At present, Banpu has a clear policy and management Thailand and Indonesia to produce and sell coal locally that demonstrate its commitment to sustainability. The and overseas. Aside from producing and distributing Company pursues operations mainly in coal, power coal, the Company entered other business areas, generation, and integrated energy sectors in Thailand, including removing overburden and coal for the Indonesia, China, Australia, Lao PDR, Mongolia, Electricity Generating Authority of Thailand (the contract Singapore, Japan and United States of America. ended in September 2001), producing and selling Vision The Asian energy company at the heart of innovation, technology, and sustainability Mission • Build sustainable value for all our stakeholders as a trusted partner, with emphasis on care for the earth and society • Promote innovation, synergy, sustainability, and integration across the energy supply chain, between conventional and new energy technologies • Foster our corporate values, operational excellence, and uphold Banpu’s reputation for integrity, professionalism and best practices 7 Annual Report 2016 Banpu Public Company Limited Vision The Asian energy company at the heart of innovation, technology, and sustainability Mission • Build sustainable value for all our stakeholders as a trusted partner, with emphasis on care for the earth and society • Promote innovation, synergy, sustainability, and integration across the energy supply chain, between conventional and new energy technologies • Foster our corporate values, operational excellence, and uphold Banpu’s reputation for integrity, professionalism and best practices 8 Annual Report 2016 Banpu Public Company Limited Financial Highlights As at As at As at 31-Dec-16 31-Dec-15 31-Dec-14 31-Dec-16 31-Dec-15 31-Dec-14 Financial Ratios Financial Position Gross Profit Margin (%) 33 32 32 Total Assets (Million USD) 6,973 6,553 6,903 Net Profits to total revenues (%) 2 (2) 3 Total Liabilities (Million USD) 4,235 4,488 4,517 Returns on Assets (%) 1 (1) 1 Total Shareholders' Equity (Million USD) 2,738 2,065 2,386 Returns on Equity (%) 2 (2) 3 Issued and Paid-up share Capital (Million USD) 143 76 76 Interest Coverage Ratio (Times) 5.33 5.89 5.50 For the years For the years For the years Net Debt to Equity (Times) 0.99 1.40 1.18 ended ended ended Data per Share 31-Dec-16 31-Dec-15 31-Dec-14 Earnings per Share (USD) 0.013 (0.017) 0.03 Operational Results Book Value per Share (USD) 0.25 0.37 0.92 Sale Revenues (Million USD) 2,259 2,477 3,145 Dividend per Share (THB) 0.50 1.00 1.20 Cost of Sales (Million USD) (1,511) (1,672) (2,138) * The Company announced a total dividend of THB 0.50 per share arising from its performance during the period from 1 January 2016 to 31 December 2016, Gross Profit (Million USD) 748 804 1,007 of which THB 0.25 was paid on 23 September 2016. The remaining dividend of THB 0.25 per share for 2016 performance will be paid on 28 April 2017 Selling and Administration Expenses (Million USD) (340) (395) (451) Remark : Financial figures are based on the consolidated financial statement. Royalty Fee (Million USD) (219) (239) (303) Other Revenues (Million USD) 33 51 47 Other Expenses (Million USD) (44) (61) (5) Profit from Operation (Million USD) 178 160 296 Share of Profit from Joint Ventures (Million USD) 118 52 87 Interest Expenses (Million USD) (127) (123) (121) Financial Expenses (Million USD) (3) (8) (11) Corporate Income Tax (Million USD) (69) (98) (70) Reversal of Deferred Income Tax Assets (Million USD) - - (24) for the Minerals Resource Rent Tax in Australia Non-Controlling Interests (Million USD) (50) (26) (74) Net Profit Attributable to the Owners of (Million USD) 47 (43) 83 the Parent EBITDA (Million USD) 540 469 643 9 Annual Report 2016 Banpu Public Company Limited Financial Highlights As at As at As at 31-Dec-16 31-Dec-15 31-Dec-14 31-Dec-16 31-Dec-15 31-Dec-14 Financial Ratios Financial Position Gross Profit Margin (%) 33 32 32 Total Assets (Million USD) 6,973 6,553 6,903 Net Profits to total revenues (%) 2 (2) 3 Total Liabilities (Million USD) 4,235 4,488 4,517 Returns on Assets (%) 1 (1) 1 Total Shareholders' Equity (Million USD) 2,738 2,065 2,386 Returns on Equity (%) 2 (2) 3 Issued and Paid-up share Capital (Million USD) 143 76 76 Interest Coverage Ratio (Times) 5.33 5.89 5.50 For the years For the years For the years Net Debt to Equity (Times) 0.99 1.40 1.18 ended ended ended Data per Share 31-Dec-16 31-Dec-15 31-Dec-14 Earnings per Share (USD) 0.013 (0.017) 0.03 Operational Results Book Value per Share (USD) 0.25 0.37 0.92 Sale Revenues (Million USD) 2,259 2,477 3,145 Dividend per Share (THB) 0.50 1.00 1.20 Cost of Sales (Million USD) (1,511) (1,672) (2,138) * The Company announced a total dividend of THB 0.50 per share arising from its performance during the period from 1 January 2016 to 31 December 2016, Gross Profit (Million USD) 748 804 1,007 of which THB 0.25 was paid on 23 September 2016. The remaining dividend of THB 0.25 per share for 2016 performance will be paid on 28 April 2017 Selling and Administration Expenses (Million USD) (340) (395) (451) Remark : Financial figures are based on the consolidated financial statement. Royalty Fee (Million USD) (219) (239) (303) Other Revenues (Million USD) 33 51 47 Other Expenses (Million USD) (44) (61) (5) Profit from Operation (Million USD) 178 160 296 Share of Profit from Joint Ventures (Million USD) 118 52 87 Interest Expenses (Million USD) (127) (123) (121) Financial Expenses (Million USD) (3) (8) (11) Corporate Income Tax (Million USD) (69) (98) (70) Reversal of Deferred Income Tax Assets (Million USD) - - (24) for the Minerals Resource Rent Tax in Australia Non-Controlling Interests (Million USD) (50) (26) (74) Net Profit Attributable to the Owners of (Million USD) 47 (43) 83 the Parent EBITDA (Million USD) 540 469 643 10 Annual Report 2016 Banpu Public Company Limited Operational Results For the years ended For the years ended 31 - Dec - 2016 31 - Dec - 2015 31 - Dec - 2014 31 - Dec - 2016 31 - Dec - 2015 31 - Dec - 2014 Coal Sales Volume (Million Tonnes) Gross Profit Margin (%) Indominco 15.41 13.00 15.27 Indominco 38 31 32 Trubaindo 5.97 7.10 6.92 Trubaindo