EGCO

        Thanks to the robust recovery of the global economy, the Thai economy has consolidated its rebound despite the impact of the prolonged political conflict. 2010 was thus a testing year for the business sector to streamline their strength and potential to cope with the challenges of the prevailing economic circumstances. It was by all means a successful year for businesses with good preparedness and clearly articulated and up-to-date operational strategies.

        As regards the energy business situation, particularly that of electricity generation, the government has developed a power development plan (PDP) spanning 20 years from 2010-2030 with the focus on the stability of the electricity supply system and fuel diversification. To make it a green PDP, the focus also extends to promote the use of renewable energy in line with the 15-year alternative power development plan of the Ministry of Energy together with encouraging efficient power generation via the co-generation system.

        Electricity Generating Public Company Limited or EGCO is committed to continuing developing our business as the first independent power producer in Thailand. To prepare for the emerging challenges and to enhance EGCO’s competitiveness, we strive to develop our personnel’s capabilities along with keeping abreast of the market outlook both at home and abroad. The endeavors also include carrying out a SWOT analysis to evaluate EGCO’s strengths, weaknesses, opportunities, and threats to articulate appropriate business strategies and to retain investment opportunities, creating added value for shareholders and other stakeholders as well as maintaining revenues and market shares as the leader in the energy business. EGCO Group has set its sights on expanding investment overseas and investing continuously in renewable energy projects. To that effect, EGCO acquired another 10% stake in Nam Theun 2 Power Company (NTPC), increasing the total stakes in such company to 35%. Commencing commercial operations and making its official debut in the fourth quarter of 2010, Nam Theun 2 hydropower plant is now the hydropower plant with the largest installed capacity in Southeast Asia. Further, to accommodate future overseas business expansion, EGCO Group incorporated North Pole Investment Company in Mauritius as well as New Growth Cooperative UA (COOP) and New Growth B.V. (BV) in the Netherlands. In addition, BV, EGCO’s wholly-owned subsidiary, acquired all outstanding shares in Ogden Power Development Cayman Inc and Covanta Philippines Operating Inc (CPOI), increasing EGCO’s stakes in Quezon Power (Philippines) Limited Co., and in CPOI to 52.125% and 100%, respectively. As at the end of 2010, the acquisition resulted in EGCO having a combined megawatt equity of 4,361.08 from its 14 power plants, an increase of 380.38 megawatts or 10% from 2009. At present, the EGCO Group sells electricity to the Electricity Generating Authority of Thailand (EGAT) under a long-term power purchase agreement for 3,931.43 megawatts, accounting for 12.71% of the country’s combined generating capacity of 30,920.01 megawatts.

        Apart from the demonstrated commitment to achieve sustainable business progress, EGCO stresses the significance of contributing to social and environmental sustainability which are the bottom line of any successful business. To fulfill the Company’s vision, EGCO pledges to conduct business with “full commitment to environmental protection and social development support”. Top priority has been given to constantly taking care of and minimizing our operation impacts on society and the environment. Moreover, EGCO is dedicated to fostering synergistic efforts, potential, and collaboration with allied agencies from both government and private sectors to continuously carry out numerous projects beneficial to the community and society. The efforts encompass three areas: conservation of natural resources and the environment, promotion of learning and fostering public mindedness among youths, and promotion and development of the community’s quality of life. EGCO encourages its employees to constantly participate in these socially-beneficial activities to develop their potential and capabilities together with instilling public consciousness, empowering EGCO employees to be quality and valuable assets for the Company and the society as a whole.

        For 2010, EGCO’s operating results were in line with expectations with the annual net profit of 6,792 million baht, representing earnings per share of 12.90 baht. The interim dividend payment from the first half-year operation was paid at 2.50 baht per share. EGCO is confident that the Company can maintain the dividend payment at an appropriate and consistent level.

        The unwavering commitment and continued business development earned EGCO recognition from various institutions. For example, EGCO was honored by the Stock Exchange of Thailand (SET) and the Finance and Banking Magazine, receiving the CSR Awards for listed companies with a market capitalization of over 10 billion baht at the SET Awards 2010. In addition, EGCO was ranked the sixth best listed company in Thailand and fourth in the energy and utility sector by the Finance and Banking Magazine. Apart from being ranked eighth best listed companies in Thailand in the energy sector by Tycoon Magazine, EGCO received an Excellent Rating and also received a special commendation for exemplary performance in the conducting of the AGM from the 2010 Annual General Shareholders Meeting (AGM) Assessment Program organized by the Thai Investors Association. On top of these, EGCO was assessed by the Thai Institute of Directors (IOD) to be at the ‘Excellent’ level of corporate governance recognition and was ranked eighth in Thailand for being most committed to a strong dividend policy by Finance Asia.

        Additionally, the efficient operations of EGCO power plants have also been recognized by a consortium of institutions. Our Khanom Power Plant received the “National Safety Awards” for Safety and Occupational Health for the eleventh consecutive year and the Outstanding Workplace for Labor Relations and Welfare “for the fourth year running from the Ministry of Labor. Further, Roi Et Green Power Plant was also awarded the Safety Excellence Award in National Level” at the National Safety Week organized by the Ministry of Labor.

          On behalf of Electricity Generating Public Company Limited, executives and all staff members, I would like to express my gratitude to our shareholders and all the supporters including customers, business partners, community, and society for your continued trust and support. They have contributed to all our accomplishments, empowering EGCO to operate efficiently and continue to grow steadily over the years. Nevertheless, EGCO will strive to pursue and establish an approach to achieve a stable and appropriate growth to optimize the return for shareholders with business integrity and fairness to all stakeholders together with contributing to the sustainable development of the EGCO Group and Thai society as a whole.