ANNUAL REPORT 2018 www.thaisolarenergy.com Vision To become a world-class regional leader in providing renewable energy through reliable technologies to serve both commercial and social societies Mission To establish a solid footprint in Thailand in the solar power industry and expand into other renewable energies as well as developing an international solar power business focusing in Asia & Oceania regions Contents 2 3 4 Message from Message from Report of the Audit the Chairman the Vice Chairman Committee Report of the Nomination and Remuneration Committee 6 11 12 The Board of Directors Shareholding Structure Key Milestones and Management and Development 14 27 30 Nature of the Business Risk Factors Organization Chart 31 55 56 Corporate Governance Securities Holding of Remuneration for Directors Directors & Executives and Executives 58 59 60 The Board of Directors’ Auditing Related Party Transation Responsibility for Financial Reporting 62 63 67 Financial Highlights Management Discussion Independent Auditor’s and Analysis Report 71 134 135 Financial Statement General Information Information of the Company Group and reference persons Message from the Chairman In 2018, Thai Solar Energy Public Company Limited’s operations reached the stage of growth in different areas. This year was regarded as a great year and ready to gain from an investment as the Company had invested in various types of renewable energy business for the last few years. To this, the Company had 38 projects with total selling capacity of 300.42 Megawatts (MW) operated both in Thailand and Japan. In the fourth quarter, the Company started to realize additional revenues from its 22.2 MW biomass power plant projects. This brings about a total of 37 Commercial Operation Date (COD) projects with a combined selling capacity in Thailand and Japan of 145.44 MW. Nevertheless, the Company still endeavors to expand solar power generation and distribution and other types of renewable energies according to the public sector’s policy to support investment in renewable energy and seek investment opportunities overseas through experienced and highly skilled personnel, business allies and a strong financial position, highlighted as the Company’s strengths. Thanks to our advancing efforts in business operations, Thai Solar Energy Public Company Limited has received the honorary award of “Asia’s Best Performing Companies” at “ACES AWARDS 2018” (The Asia Corporate Excellence & Sustainability Awards) organized by MORS GROUP in Singapore. On behalf of the Company’s Board of Directors, executives, employees and subsidiaries, we would like to thank all our shareholders, clients, partners, business allies, as well as all our stakeholders to place your trust and confidence in our potential and to be an essential part of continuous support. Still, we will run business with honesty, transparency and carefulness under the good corporate governance principles and simultaneously take part in the development of societies, communities and environment in order to together promote stability and sustainable growth in every sector in the future. (Cathleen Maleenont, Ed.D) Chairman of the Board of Directors 2 Annual Report 2018 Message from the Vice Chairman TSE still emphasizes the interests of all shareholders and all stakeholders through the dedication to our mission to run the solar power and other types of renewable energy businesses in Thailand and Asian region. We not only make an effort to seek new opportunities both in Thailand and overseas, but also manage costs efficiently, such as construction investment, operations, financial cost and appropriate risk management. Besides, we will continue to search for new innovation so as to enhance stability and sustainable values to all shareholders. I absolutely hope that we will earn the trust and confidence from all of our stakeholders who will be a vital support for the Group of Thai Solar Energy Public Company Limited’s renewable energy operations for creating the country’s energy security, good governance and environmental sustainability. (Mr. Prommin Lertsuridej) Vice Chairman Thai Solar Energy Public Company Limited 3 Report of the Audit Committee The Audit Committee has been assigned standard with disclosure of adequate, 3. The review of the internal control to perform duties by the Group’s Board complete and reliable information, system Internal audit system and the risk of Directors according to the requirements including the audit matters (KAMs). management system of the company in of the Office of the Securities and Exchange - During the year 2018, the Company order to be appropriate and effective. Commission and the Notification of the recognized impairment losses in 4. Considered and selected the auditor’s Securities Exchange of Thailand, as specified additional thermal power plants in the remuneration for the company therefore in the charter, prescribed by the Board. amount of 296 million baht. As at 31 resolved to propose to the Board of The Audit Committee comprises members December 2018, thermal power plants Directors To request approval from the who are qualified persons and independent have a book value of 238.47 Million baht shareholders’ meeting Appointment of members, i.e., Mrs. Siriphen Sitasuwan, after deducting allowance for auditors from PricewaterhouseCoopers Mr. Prasan Chuapanich and Mr. Boonchoo impairment of assets in the amount of ABAS Co., Ltd. to be the auditor for the Direksathaporn. The Committee submitted 545.92 million baht. year 2019 for another term performance report as information and to The Audit Committee has met with the In general, the Audit Committee views that be reviewed by the Board of Directors at auditor without participation of the the Board of Directors and the management least once in each quarter. The report management in order to consult each of the Group have ethics and determination whose preparation is completed in other on the independence in performing to carry out the duties in order to achieve consultation and with approval of the duties and providing opinion by the the group’s business goals and realize the management, internal audit committee auditor. importance of operating the business and auditor contains the following essential under corporate good governance, elements. 2. The review of the operation and transparency and trustfulness. 1. The review of quarterly and yearly considered the connected transaction of financial reports of the Group in 2018 the company to comply with laws and which was performed to ensure that the regulations related to the Stock Exchange financial statement of the Group has been of Thailand To ensure that it is reasonable prepared according to the financial report and most beneficial. (Mrs. Siripen Sitasuwan) Chairman of the Audit Committee Report of the Nomination and Remuneration Committee The Nomination and Remuneration 2. Considered and set remuneration for basis and perform the duties with full Committee comprises 3 members and is members of the Board of Directors and ability, carefulness, transparency and chaired by Mr. Prasan Chuaphanich, an committees, based on suitability, duties independence, based on adequate and independent director. In 2018, the and responsibilities, performance, business appropriate level of corporate good Nomination and Remuneration Committee environment, economic conditions and governance that should provide utmost convened 2 meetings and reported the by comparing with the remuneration of benefit to all stakeholders. Board on the results of the meetings other companies in the same or similar regularly. Followings are some of important business. The shareholders’ meeting businesses conducted by the Nomination approved the remuneration as proposed. and Remuneration Committee. 3. Considered the remuneration for top 1. Qualified persons to be appointed as management, based on suitability company director and subcommittees to replace performance, individual performance, and (Mr. Prasan Chuaphanich) those retired by rotation, based on the inflation. Chairman of the Nomination and regulations of the Board of Directors and Remuneration Committee good corporate governance, considering In realizing the importance of corporate the proportion and composition of directors. good governance principle, the Nomination It also includes a variety of expertise and and Remuneration Committee has expertise related to the company’s business, reviewed and monitored the operational to drive the business strategy to the most progress of the management on regular effective and effective. 4 Annual Report 2018 The Board of Directors and Management Cathleen Maleenont, Ed.D. Mr. Prommin Lertsuridej Chairman of Board of Directors, Chairman of the Board of Vice Chairman and Independent Director Executive Directors, Chief Executive Officer, Nomination and Age 64 years Remuneration Committee, Acting Chief Financial Officer, (Authorized Director) Education National Health Administration, Japan (May - June 1992) Age 47 years Clinical Preventive Medicine, The Medical Council of Thailand Education Fellowship in Public Administration Ottawa University and Ed.D. in Institutional Management, Pepperdine University Carleton University, Canada M.S.A. in Multinational Commerce, Boston University Doctor of Medicine (MD), The Faculty of Medicine Ramathibodi B.A. in Mass Communication, Chulalongkorn University Hospital of Mahidol University Related Training Program held by Thai Institute of Directors Bachelor of Science Degree Program in Medical Science, Association