glow 06

Financial Highlights

Financial Position (Consolidated)

Total Assets

(Unit : Million Baht)




Total RevenueOperating RevenueEBITDAEBITNormalized Net Profit (Loss)Total AssetsTotal LiabilitiesShareholders' EquityDividend Per Share (Baht)

28,59628,4958,3715,794*4,312*57,35732,35425,0030.70(2)

33,99232,5939,0525,9334,602

54,60928,16926,4402.85(1)

Note : * restated (1) 2005 annual dividend (normal and special) and 2006 interim dividend (2) 2004 annual dividend (3) 2003 annual dividend

27,25627,0418,4505,663*3,968

53,26832,99420,2741.33(3)

200420052006

3,6003,8004,0004,200

4,6004,400

4,800

4,602

4,3123,968

5,0002006 2005 2004

2006 2005 2004

10,00015,000

30,00035,000

20,00025,000

32,59328,495 27,041

Normalized Net Profit (Loss)

Operating Revenue

2 Annual Report 2006 Glow Energy Publc Company Limited 3

Key P&L performance indicator for Glow is Normalized Net Profit (NNP) Glow IPP has an outstanding loan in USD which will be repaid by USD linked operating cash flows. Under Thai GAAP the outstanding USD loan is converted at year-end in THB at the current exchange rate. Any difference in THB outstanding loan amount due to using a difference exchange rate compared to last year leads to an unrealized FX gain (THB appreciation) or loss (THB depreciation). Since the USD loans in Glow IPP are served by USD linked cash flows the Unrealized FX gains/losses should, in Glows view, be ignored from an economic point of view. Glows management has always and consistently focused on NNP ignoring unrealized FX gains/losses (substance over form).

54,609

57,357

53,268

2006 2005 200442,000

48,00046,00044,000

50,00052,000

56,00054,000

58,000

10 Annual Report 2006

Environmental,Occupational Healthand Safety Management

During the past year, the Company updated environmental, occupational health and safety management policiesand procedures. The aim was to review and update the existing procedures on environment, occupational health andsafety management, so that the systems and procedures are in line with current local and international best practices.

The key steps that have been implemented include the review and improvement of Environmental, Health andSafety Procedures (EH&S Procedures) in accordance with the latest changes to the Thai regulations and laws. EH&SProcedures focus on three principles: first, personnel and asset safety; second, mitigation of potential impacts outside ofthe site boundaries, and third, the reliability of supply to the customers. By following these principles, maximum benefitsshould be created for all stakeholders.

The Company is implementing an environmental management system, based on ISO14001. This system creates anenvironmental management framework with the objective of ensuring compliance with international best practices.

The Company has long realized the importance of the good health of its employees. Therefore, the environmentalconditions of the workplace are routinely inspected. Air quality and sound levels of various areas within the plant sites areperiodically monitored in order to minimize any negative impacts to the employees. Additionally, risk surveys areperiodically conducted to evaluate the risks to which employees are exposed in the plants. Corrective and preventivemeasures are taken as necessary to mitigate dangers or risks which may arise from operations in various areas. TheCompany also provides annual medical check-ups to all employees to monitor their health.

The Company has an ongoing safety training program to enhance the employees knowledge and awareness ofsafety. All plant employees have attended safety training programs which may include among others safety orientation,first aid, usage of personal protective equipment, fire prevention and suppression techniques and emergency response.Internal audits are conducted on a regular schedule to ensure compliance with safety policies and procedures.

Glow Energy Public Company Limited 11

Public Contributions and Community RelationsThe Company together with its employees carried out various social activities to promote well-beings and

sustainability of the communities as follows:

Education-ReligionEducation and religion play very important roles for development of the youth and the people in general.

Therefore, the Company has supported the activities related to education and religion, e.g. to provide financial supportfor school development, science camps activities, to provide computers to educational institutes and governmentagencies, to arrange exhibition on energy, to invite the interested students and people to visit the power plant, tosupport on educational equipments for students. In addition, the Company also participated in Tod Kratin ceremonieswith many temples, both in Map Ta Phut Industrial Estate and other areas to strengthen the religion which, together witheducation, is the basis for a good society.


SocietyIn order to help develop the society and to promote occupation of the communities around the industrial estates, the

Company has cooperated with the Industrial Estate Authority of Thailand to set up the Mussel Hanging Farm Project. Theproject aim to enhance the skills and income of the local fisherman. The Company also provided computers, officeequipment to the local government agencies with the main objective was to increase the efficiency of data processing to be usedin such agencies. The Company also supported the traditional festivals and local cultural activities continually.

The Company also cooperated with the Map Ta Phut Industrial Estate Public Relations Club in arranging activities forpublic benefits in the plants and nearby areas. Additionally, this club also served as the forum to exchange ideas andto find solutions of the problems.

Quality of LifeThe Company joined hands with Map Ta Phut Hospital to arrange the exercising program for the elders and to

participate in the medical check-up program for the people around Map Ta Phut Industrial Estate, to support varioussport competitions both locally and at provincial level so as to enhance the quality of life of the people as well as todonate money for other charitable projects.


OthersOutside of the local community the company also participate in activities that support the quality of life and

environmental awareness programs. Examples of these activities include; Educational development projects for children and youth in mountainous areas at Amphoe Ta Songyang, Tak

Province which is a Royal Project of HRH Princess Maha Chakri Sirindhorn with objectives to develop the qualityof life through improvement of education, public health and healthcare of children and youth in remote areas.

The construction of mini hydropower plant at the village level in the Mae Lop River Basin area, Amphoe Omkoi, ChiangMai Province in accordance with the royal initiation of HRH Princess Maka Chakri Sirindhorn with objectives to createenvironmental awareness through water conservation, restoration of natural conditions and develop quality of life ofthe communities in the project areas.


Glow Energy Public Company LimitedHead Office address : 195 Empire Tower 38th Floor-Park Wing,

South Sathorn Road, Yannawa, Sathorn, Bangkok 10120Tel. (66 2) 670 1500 - 33 Fax. (66 2) 670 1548 - 9

Plant Location : Glow SPP Phase 2 - Central Utilities Cogeneration Plant3, I - 4 Road, Map Ta Phut Industrial Estate,Muang District, Rayong 21150Tel. (038) 684 078 - 80 Fax. (038) 684 - 061 andGlow SPP Phase 4, Central Utilities Cogeneration Plant

11, I - 5 Road, Map Ta Phut Industrial Estate,Muang District, Rayong 21150Tel. (038) 684 780 - 8 Fax. (038) 684 789

Homepage : www.glow.co.thType of Business : Supply utilities (electricity, steam, clarified and demineralized water)

Subsidiary Company that the Company holds shares of more than 50%

1. Glow Company LimitedHead Office address : 195 Empire Tower 38th Floor-Park Wing,


Type of Business: services : Services2. Glow IPP Company LimitedHead Office address : 195 Empire Tower 38th Floor-Park Wing,


Plant Location : 42 Moo 8, CIE - 8 Road, Chonburi Industrial Estate (Bowin),Sriracha District, Chonburi 20230Tel. (038) 345 900 - 5 Fax. (038) 345 906

Type of Business : Supply utilities (electricity)3. Glow SPP 1 Company LimitedHead Office address : 195 Empire Tower 38th Floor-Park Wing,


Plant Location : Glow SPP 1 Plant - Central Utilities Cogeneration Plant10, Soi G-2, Pakornsongkrawhrat Road, Eastern Industrial Estate,Huaypong, Muang District, Rayong 21150Tel. (038) 685 589 Fax. (038) 685 104

Type of Business : Supply utilities (electricity, steam, and demineralized water)4. Glow SPP 2 Company LimitedHead Office address : 195 Empire Tower 38th Floor-Park Wing,


Plant Location : Glow SPP Phase 3 - Hybrid Cogeneration Plant11, I - 5 Road, Map Ta Phut Industrial Estate,Muang District, Rayong 21150Tel. (038) 684 780 - 8 Fax. (038) 684 789

Type of Business : Supply utilities (electricity, steam)

General Information


5. Glow SPP 3 Company LimitedHead Office address : 195 Empire Tower 38th Floor-Park Wing,


Plant Location : Glow SPP Phase 1 - Central Utilities Plant5, I - 4 Road, Map Ta Phut Industrial Estate,Muang District ,Rayong 21150Tel. (038) 684 078 - 80 Fax. (038) 684 061 andGlow SPP Phase 3 - Hybrid Cogeneration Plant11, I - 5 Road, Map Ta Phut Industrial Estate,Muang District, Rayong 21150Tel. (038) 684 780 - 8 Fax. (038) 684 789

Type of Business : Supply utilities (electricity, steam, clarified anddemineralized water)

6. Glow Demin Water Company LimitedHead Office address : 195 Empire Tower 38th Floor-Park Wing,


Plant Location : 9,Soi G-2, Pakornsongkrawhrat Road,Eastern Industrial Estate, Huaypong, Muang District,Rayong 21150Tel. (038) 685 589 Fax. (038) 685 104

Type of Business : Supply demineralized water7. Glow Hemaraj Energy Company LimitedHead Office address : 195 Empire Tower 38th Floor-Park Wing,


Type of Business : IPP project developments

Number of Employees : 431 persons(As of 31 December 2006) : 114 persons are located at Bangkok and 317 at Plant

Registered Capital as of : 14,828,650,350 baht31 December 2006

Paid up Capital : 14,628,650,350 bahtas of 31 December 2006

Other ReferencesBondholders Representative : Siam Commercial Bank Public Company Limited

9th Floor, Zone B, 9 Rutchadapisek Road,Ladyao, Chatuchak, Bangkok 10900 Tel. (66 2) 544 3921

Auditor : Deloitte Touche Tohmatsu Jaiyos Company Limited183 Rajanakarn Building, 25th Floor, South Sathorn Road,Yannawa, Sathorn, Bangkok 10120


Message from the Chairman

Overall, 2006 was a very rewarding year for the Glow Group of companies. The groups performance in many areas was excellent, including finance, operations and human resources development. It also continued to achieve very high standards and levels of awareness in environmental management, occupational health and safety, and community relations.

The Glow Group reported consolidated total revenues in 2006 of 33,992 million Baht, an increase of 19 % on

28,596 million Baht in 2005, marking the fifth consecutive year that the Glow Group has been able to announce substantial growth. This was due, inter alia, to sustained strong demand from customers during 2006, which was met by the additional capacity of Phase 4, Stages 1 and 2, brought in to commercial operation in January 2005 and December 2005, providing in total 78 MW and 138 tons per hour of steam.

Early in 2006, Glow Energy received important recognition from two respected institutions. The TRIS Rating

Co., Ltd. (TRIS) upgraded Glow Energy Public Company Limited and all its guaranteed debentures to A from A-. TRIS stated: The upgrade reflects GLOWs stable cash flow from long-term Power Purchase Agreements with the Electricity Generating Authority of Thailand; its proven record of providing reliable electricity and other utilities to customers; and the support from its major shareholder, SUEZ. The company also won the Award for Best Newly Listed Company in 2005 from The Stock Exchange of Thailand.

Since 2003, we have pursued our Operational Excellence programme, improving financial performance while

maintaining efficiency, availability and reliability of supply for our customers. That the programme has achieved its goals of increasing Glow Energys competitiveness and customer satisfaction is clearly demonstrated by the signature of two major power supply agreements for a period of 20 years with petrochemical companies affiliated to the Siam Cement Group, based in the Map Ta Phut area. In order to supply these contracts and other contracts from 2010,

17Glow Energy Public Company

Glow Energy has entered into an Engineering and Procurement Contract with Doosan Heavy Industries & Construction to build a 115 MW eco-friendly power plant on a fixed price turnkey basis. The construction of the Circulating Fluidized Bed Boiler at Glow Energys site in Map Ta Phut Industrial Estate started early in 2007 and is scheduled to be operational at the end of 2009.

Glow Energys Board welcomes this substantial increase in capacity, since it brings satisfactory returns, applies

the latest efficient technologies to meet customer demand, and further strengthens our leading position in the power business in Thailand.

We recognise that development of human resources is vital to achieving our goal of operation excellence; and

we have therefore been running knowledge and skills training and employee-empowerment programmes. These programmes promote learning at all levels, encourage employees to realise their career potential, and offer incentives for accountability.

On behalf of the Board of Directors, I would like to thank our shareholders, customers, lenders, state and private

agencies and the community for their continuing support. I would also like to thank all members of the management and staff for their dedication and hard work, which has contributed so much to the success of our Company.

Mr. Guy Richelle Mr. Marc Raymond Josz Chairman of the Board Chairman of the Board


Message from CEO

Diversified Revenues

Our strategic focusGlow Energys targets are: long-term value creation (cash on cash), yearly normalized net profit (i.e. net profit

excluding impact of unrealized FX gains/losses; NNP), balanced risk management and improvement of processes, systemsand training (managerial fundamentals).

EGAT (SPP) 30%Other 1%

EGAT (IPP) 33%

IC-Electricity 24%IC-Steam 12%

CashNPV - LT, risk adjustedFCF - ST

EarningsNCR (Thai GAAP)Reduce Volatility

Actions Commercial Financial Operational Human Resources

Risk Management(Legal and Corporate) ComplianceCommodity risk management (FX, interest, gas, coal)

Managerial FundamentalsQuality management (Reliability of decision - making and reporting based on standardized documented processes, automated tools / systems and highly qualified & motivated workforce.

In 2006 the share price of Glow increased by more than 40% compared to a 5% decline for the SET Index. GlowEnergy posted consolidated EBITDA of Bt 9,052 million and normalized net profit of Bt 4,602 million for the full year 2006results. The 2006 results will be the 5th consecutive year that the Group has been able to announce substantial rise in(normalized) profits. The NNP have increased by 60% since 2002, when the Group initiated the Operational Excellenceprogram.


The strategic vision Glows management set out in 2002 was to achieve our targets through operational excellence,profitable growth and Thai citizenship.

Thai citizenship. There has been an ongoing training of our Thai employees and a transition towards a more Thaimanagement team and, through the IPO, Thai shareholding.

Operational excellence was the key target over the 2002 - 2006 period. The cogeneration business gave indeed alot of room for productivity improvements and cost savings. An improvement of the power plants heat rates and theiravailability was a first step followed by the launching of an ambitious reliability, availability and maintainability programleading to a high reliability of the supply towards our industrial customers. Modifications to the coal harbor facilities(allowing more types of vessels to unload) also enabled Glow diversify and access more competitive coal and freightprices. Substantial savings were realized in our financing costs both in the cogeneration and IPP business. The cost ofspare parts in the cogeneration business went down substantially. We intend to work on reducing the cost of the spareparts in Glow IPP as well since we consider the spare part unit prices too high.

Coupled with these productivity improvements and cost savings there was a big focus on customer relationship asa key foundation for establishing true operational excellence. Our commercial approach is one in which our customersare viewed as long-term business partners. The growth in our sales to industrial customers is a key indicator of thatsatisfaction level. Over the period 2002 - 2006 there was a 25.4% growth in steam sales and 28.4% in electricity sales toindustrial customers. This improved capacity utilization has contributed to our improved profitability.

Operational excellence also targets improvement of managerial fundamentals. We have continuously improved anddocumented our working processes and the systems in which our activities are reported. That has enhanced the reliabilityof decision-making. Development and training of our staff and concern for Environmental, Health and Safety (EHS) hasalways been top tier priority. Glows power plants adhere to the strict and measured environmental norms and Glowsfacilities are well within the emission levels imposed by the Thai law and the environmental permits.

In 2007 we will continue the operational excellence program but we believe that favorable market conditions willenable us to enlarge the focus to profitable growth.


UNIT 2005 2006 % changeNormalized Net Profit (Net Profit excluding MTHB 4,312 4,602 6.7 unrealized Fx gains and losses; NNP)EBITDA MTHB 8,371 9,052 8.1Interest Cover Ratio Times 5.70 7.04 23.5Net debt to book equity Times 1.08 0.85 (21.2)Market capitalization MTHB 34,085 48,275 41.6Share price THB/share 23.30 33.00 41.6Sales industrial customers - electricity GWh 2,826.26 3,066.90 8.5Sales industrial customers-steam Ktons 5,4011 5,448 0.9Forced outage factor - Cogeneration % 0.41 1.01 -Forced outage factor - IPP % 5.19 0.88 -Customer reliability % 99.99 99.99 -Average cost of debt (interest + financial cost of % 5.9 5.6 - outstanding debt at year end)Effective tax rate (taxes paid / EBT) % 0.1 3.0 -Normalized Net Profit (NNP) % 78.0 76.0 - Cogeneration Business / Total NNP GlowRevenues Cogeneration Business / Total Revenue Glow % 69.8 67.2 -

KPI

The year 2006The year 2006The year 2006The year 2006The year 2006

Note : (1) Excludes temporary sales

Profitable growth. The growth in installed capacity between 2002 - 2006 has been limited to 4.5% for electricity and17% for steam. In 2005 Glow added a total capacity of 76 MW and 140 tph of steam to the cogeneration business andwe have started the construction of a 115 MW expansion. The project is targeted to be finished by year end 2009. Mostof the capacity of this plant is contracted out, even after taking into account the loss of our current PTT-affiliatedcustomers (ATC and PTT Chemical) expected in the period 2010 - 2011.

If successful in the new IPP bidding planned by the ministry of energy in Q2 2007 Glow could add 700 MW up to1,400 MW of additional IPP capacity by 2012.

We also evaluate at opportunities under the recently announced new SPP contracts taking into account synergieswith our existing cogeneration business.

We are in position to seize worthwhile acquisition opportunities as they come provided they are value creating andfit in our portfolio.


Peter TermoteCEO of Glow Group

Glow cogenerations business was marked by an improved gross margin on our industrial sales due to anexceptional increase in the electricity end-user prices (PEA price) caused amongst others by a delay in the third gaspipe which required EGAT to run on more expensive fuels.

In 2006 there was also an 8.5% volume increase in industrial electricity sales whilst the steam sales volumes remainedflat. We note that from 2007 until the date that our CFB power plant expansion is operational (end 2009), additionalvolumes sold to industrial customer will not add gross profit margin since supply for additional sales are produced fromthe relatively least economical production facilities.

Freight prices went down in 2006 but to our surprise the coal costs FOB remain at the historically high levels reachedsince 2005.

Since most of our Normalized Net Profit is USD-linked the strengthening of the Baht in 2006 (+6.5%) had a negativeimpact on our retained earnings.

Interest costs went down due to refinancing of Glow IPP and a reduction of outstanding debt. Taxes started to hitthe financial results. A substantial increase in tax costs is to be expected in the coming years as we gradually move outof BOI exemptions for our businesses.

Glow IPP had a better availability than in 2005 in which a major inspection and prolonged outage occurred

I want to thank our customers and shareholders for the trust they have given us and our employees for theirprofessionalism and commitment to the success of Glow. I also thank the members of the Board for their trust, guidanceand support.

1 1 2 3 4

5 6 7

8 9 10

11 12

22 Annual Report 2006 23Glow Energy Public Company

Board of Directors

1. Mr. Guy Richelle Chairman of the Board (February 2007 - present) 1. Mr. Marc Raymond Josz Chairman of the Board (January 2006 - February 2007)

2. Mr. Peter Valere Germain Termote Director and Chief Executive Officer 3. Mr. Kovit Poshyananda Independent Director & Audit Committee 4. Mr. Vitthaya Vejjajiva Independent Director & Audit Committee 5. Ms. Supapun Ruttanaporn Independent Director & Audit Committee 6. Mr. Dirk Achiel Marc Beeuwsaert Director 7. Mr. Guido Geeraerts Director 8. Mr. Johan De Saeger Director 9. Mr. Rajit Nanda Director 10. Mr. Philip De Cnudde Director 11. Mr. Anut Chatikavanij Director 12. Mr. Brendan G. H. Wauters Director


Management Team 1 2

5 6 3 4

1. Mr. Peter Valere Germain Termote Chief Executive Officer 2. Mr. John A. Guidy Executive Vice President and Chief Operating Officer 3. Ms. Sriprapha Sumruatruamphol Executive Vice President and Chief Commercial Officer 4. Mr. Esa Heiskanen Executive Vice President and Chief Project Development & IPP Business 5. Mr. Suthiwong Kongsiri Executive Vice President and Chief Financial Officer 6. Ms. Natnicha Kulcharattham Senior Vice President - Human Resources & Administration 7. Mr. Pajongwit Pongsivapai Senior Vice President and Deputy Chief Operating Officer 8. Mr. Michael W. Reiff Senior Vice President and Chief Financial Controller 9. Mr. Svend Erik Jensen Senior Vice President - Construction & Technical Management 10. Mr. Louis Stephen Holub Senior Vice President - Strategic Initiatives and Vice President GIPP Facility Management 11. Mr. Kanit Thangpetch Senior Vice President - Rayong Facilities Management 12. Mr. Narongchai Visutrachai Senior Vice President - IPP Business & Government Affairs 13. Mr. Wisit Srinuntawong Senior Vice President - Engineering 14. Ms. Chamaiporn Soonthorntasanapong Vice President - Compliance & Insurance 15. Ms. Sirichan Chotchaisathit Vice President - Industrial Sales 16. Mr. Somchai Klinsuwanmalee Vice President - Government & Public Affairs 17. Mr. Renaud Louis Albert Pilleul Vice President - Industrial Customer Relations 18. Mr. Jirasek Poomchai Vice President - Logistics & Fuel Management 19. Ms. Suttasinee Pengsupaya Vice President - Accounting 20. Mr. Chaiwut Rattanapornsinchai Vice President - Information Technology 21. Mr. Sirote Vichayabhai Vice President - Finance & Investor Relations 22. Ms. Unchana Kittipiyakul Vice President - Budgeting & Business Controlling 23. Mr. Akarin Prathuangsit Vice President - Marketing & Business Planning 24. Dr. Somgiat Dekrajangpetch Vice President - Asset Optimization 25. Mr. Prateep Phuthamrugsa Vice President - Supply Chain Management


Audit Committee Report

To: The ShareholdersGlow Energy Public Company Limited (the Company)The Audit Committee is composed of three independent directors: Mr. Kovit Poshyananda Chairman Mr. Vitthaya Vejjajiva Member; and Ms. Supapun Ruttanaporn Member.The Audit Committee was appointed for a three-year term, commencing on 18 April 2005. The internal audit function

has been outsourced to PricewaterhouseCoopers who acts as the audit committee secretary.During the period ended 31 December 2006, the Audit Committee held six meetings and performed their duties and

responsibilities in accordance with the Audit Committee Charter. The principal responsibilities during the period were asfollows:

1. Independently reviewed the interim and annual financial statements by coordinating with the external auditors andrelated management and proposed for the Boards approval.

2. Reviewed the adequacy and effectiveness of the internal control systems and the internal audit function bycoordinating with the external auditors, internal auditors and Group internal auditors.

3. Reviewed compliance with the Securities and Exchange Act, Stock Exchange of Thailand regulations, and any otherrelevant laws of Thailand.

4. Considered and advised on the appointment of the external auditors including the audit fee.5. Considered the accuracy and sufficiency of the companys disclosure of information in the case of connected

transactions or potential conflicts of interest.The Audit Committee is of the view that the company recognises the importance of conducting its business in

accordance with the Stock Exchange of Thailands Principles of Good Governance, as evidenced by the distribution of theCode of Conduct to all staff and its disclosure to the public. The company has a good and effective internal control system,as the management of the company recognises the importance of such. In addition, as a subsidiary of a company listedoverseas, the company is required to comply with the requirements of the Sarbanes-Oxley Act in the United States ofAmerica. Furthermore, the companys senior management has an ongoing commitment to add value to the company forthe benefit of all stakeholders.

The Audit Committee proposed the appointment of Deloitte Touche Tohmatsu Jaiyos as the external auditor of thecompany for the period ending 31 December, 2007 and proposed that the Board of Directors request that the meeting ofthe companys shareholders for the year 2006 consider appointing Ms. Chongchitt Leekbhai, CPA registration no. 2649 orMr. Niti Chungnitniranda, CPA registration no. 3809 or Dr. Suphamit Tachamontrikul, CPA registration no. 3356 or Ms TanawanAnuratbodi, CPA registration no. 3440 of Deloitte Touche Tohmatsu Jaiyos as the external auditors of the company as well asthe determination of the audit fee.

Mr. Kovit PoshyanandaChairman of the Audit Committee

Glow Energy Public Company Limited


Managements discussionand analysis

(1) Map ta Phut Industrial Estate in Rayong Province

Managements discussion and analysis of financial condition and results of operations

OverviewGlow Energy Public Company and its subsidiaries are one of the largest private electricity generators and providers

of industrial utilities in Thailand. We operate IPP and cogeneration facilities (most of which operate as SPPs underThailands SPP program) and our core business is to produce and supply electricity to EGAT and electricity and steamto industrial customers in the MIE Area(1). As at December 31, 2006, we had a total generating capacity of 1,709 MW ofelectricity and 968 tons per hour of steam.

We recorded total revenues of Baht 33,991.8 million in 2006, a 18.9 per cent increase from Baht 28,596.0 million inthe year 2005. Our normalized net profit (net profit excluding unrealized exchange gains/losses), which is the basis usedto determine our dividend distribution, was Baht 4,602.0 million in 2006, a 6.7 per cent. increase from Baht 4,312.2 millionin the year 2005. As at December 31, 2006, we had total assets of Baht 54,609.3 million and total liabilities of Baht28,168.9 million.

RevenuesWe derive our revenues primarily from sales of electricity to EGAT and sales of electricity, steam and clarified and

demineralized water to industrial users in the MIE Area. The following table breaks down our revenues by source for theperiods indicated:


2006 2005 Difference (%)

5,328.13,994.53,066.9

12,389.55,483.3

12,230.3

4,560.83,921.72,826.3

11,308.76,004.4

12,172.2

767.372.9

240.71,080.8(521.1)58.1

16.81.98.59.6(8.7)0.5

2006 2005 DifferenceYear to Date Ended December 31,

RevenuesRevenues from Sales of Goods and Rendering of ServicesElectricity

Sales to EGAT by IPPSales to EGAT by SPPsSales to Industrial Customers

Total

SteamProcessed waterTotalOther IncomeTotal RevenuesTotal RevenuesTotal RevenuesTotal RevenuesTotal Revenues

(Baht millions)

10,705.09,640.67,877.2

28,222.8

4,029.9340.4

32,593.11,398.7

33,991.8

(%)

31.528.423.283.1

11.91.0

96.04.0

100.0

(Baht millions)

8,616.99,059.06,411.9

24,087.8

4,101.4305.7

28,494.9101.1

28,596.0

(%)

30.131.722.484.2

14.31.1

99.60.4

100.0

(Baht millions)

2,088.1581.6

1,465.44,135.1

(71.5)34.6

4,098.21,297.65,395.8

(%)

24.26.4

22.917.2

(1.7)11.314.4

1,283.018.9

Volumes SoldVolumes SoldVolumes SoldVolumes SoldVolumes Sold

Year to Date Ended December 31,

Electricity dispatch (GWh)To EGAT by IPPTo EGAT by SPPsTo Industrial Customers

TotalSteam (thousands of tons)Processed water (thousands of cubic meters)

Our revenues are in part driven by the volumes of electricity and industrial utilities that we produce and sell to ourcustomers. The following table sets out our volumes of electricity and industrial utilities sold for the periods indicated:

RevenuesRevenuesRevenuesRevenuesRevenues


Revenues from Sales of GoodsRevenues from Sales of GoodsRevenues from Sales of GoodsRevenues from Sales of GoodsRevenues from Sales of GoodsElectricity Sales to EGATWe sell electricity to EGAT under our EGAT power purchase agreements. We are currently party to one IPP power

purchase agreement, in respect of 713 MW of electricity and a total of 8 SPP power purchase agreements, in respectof an aggregate of 590 MW of electricity.

Electricity Sales to Industrial CustomersWe sell electricity to our industrial customers under our power supply agreements. As of December 31, 2006, we were party

to a total of 34 power supply agreements with 27 industrial customers in respect of an aggregate of 440 MW of electricity.Steam SalesWe sell steam to our industrial customers under our steam supply agreements. As of December 31, 2006, we were

party to a total of 23 steam supply agreements with 17 industrial customers in respect of an aggregate of 721 tons perhour of steam.

Processed Water SalesWe sell clarified water and demineralized water to our industrial customers under our water supply agreements. As

of December 31, 2006, we were party to a total of 13 water supply agreements with 9 industrial customers in respect ofan aggregate of 1,569 cubic meters per hour of water.

ExpensesOur expenses consist of cost of sales of goods and selling and administrative expenses. The following table sets out

the different components of our expenses by their amount and as a percentage of our total expenses for the periodsindicated:

2006 2005 Difference

19,640.91,550.4

55.7699.0

2,976.21,248.4

26,170.6

27.398.6

531.0656.9

026,827.5

%

73.25.80.22.6

11.14.7

97.6

0.10.42.02.40

100.0

16,216.01,536.8198.7597.9

2,550.81,151.2

22,251.4

26.948.2

455.5530.6448.2

23,230.2

69.86.60.92.6

11.05.0

95.8

0.10.22.02.31.9

100.0

3,424.913.6

(143.0)101.1425.497.1

3,919.2

0.450.475.5

126.3(448.2)3,597.3

21.10.9

(72.0)16.916.78.4

17.6

1.4104.616.623.8

(100.0)15.5


(Baht millions) %(Baht millions) %(Baht millions)Cost of Sales of GoodsFuel

Natural GasCoalDiesel

MaintenanceDepreciation/AmortizationOthers

Total Cost of Sales of Goods

Selling and Adminstrative ExpensesDepreciation/AmortizationFinancial ExpensesGeneral

Total Selling and Administrative ExpensesExchange Loss

Total Expenses

Expenses


The following table shows a breakdown of our costs for Glow IPP, on one hand, and for our cogeneration facilities,on the other:

7,396.449.067.9

1,137.2192.7

8,843.2

12,244.51,550.4

6.7631.1

1,839.01,055.7

17,327.4

83.60.60.8

12.92.2

100.0

70.79.00.03.6

10.66.1

100.0

5,604.7183.930.7

857.3184.5

6,861.1

10,611.31,536.8

14.8567.2

1,693.5966.7

15,390.3

81.72.70.5

12.52.7

100.0

69.010.00.13.7

11.06.3

100.0

1,791.7(134.9)37.2

280.08.1

1,982.1

1,633.213.6(8.1)64.0

145.589.0

1,937.2

32.0(73.4)121.132.74.4

28.9

15.40.9

(54.8)11.38.69.2

12.6

Cost of Sales of GoodsCost of Sales of GoodsCost of Sales of GoodsCost of Sales of GoodsCost of Sales of GoodsFuelThe principal fuels that we use to generate electricity and steam are natural gas and coal. Purchases of natural gas

constitute our single largest operating expense, accounting for 73.2 per cent of our total expenses in 2006.

2006 2005 Difference (%) Average cost

To Glow IPP To Cogeneration facilities2

201.86207.35

(Bt/MMBtu)

179.76182.71

22.1024.64

12.2913.49

2006 2005 Difference%


(Baht millions) %(Baht millions) %(Baht millions)Glow IPP

Natural GasDieselMaintenanceDepreciation/AmortizationOthers Total Cost of Sales of Goods

Cogeneration FacilitiesNatural GasCoalDieselMaintenanceDepreciation/AmortizationOthers Total Cost of Sales of Goods

Note (1) The data presented herein as the cost of sales of our cogeneration facilities is our consolidated financial results less the results of Glow IPP. Infact, certain of these amounts are attributable to portions of our business, which are not technically our cogeneration facilities, although theseamounts represent only a small portion thereof.

The following table sets out our average gas costs for the periods indicated:


(Bt/MMBtu) (Bt/MMBtu)

Note (1) These are not our actual gas prices, but are derived by taking our total natural gas expenses and dividing by total gas consumption of thefacilities for the periods presented.

(2) This is a blended rate, reflecting principally prices paid to PTT (i) by our cogeneration facilities for gas used to supply electricity to EGAT andindustrial customers, (ii) for gas used to fire boilers to generate steam for industrial customers and (iii) from August 2004, by our Glow Energyexpansion facility, which supplies industrial utilities exclusively to industrial customers. Each of the prices set out in (i), (ii) and (iii) are different.We also purchase small amounts of tail gas from another Thai supplier, which prices are separate and are also factored into the foregoingrates.

Average Effective Cost of Natural GasAverage Effective Cost of Natural GasAverage Effective Cost of Natural GasAverage Effective Cost of Natural GasAverage Effective Cost of Natural Gas11111

IPP and Cogeneration Facilities Cost of Sales of Goods Breakdown1


2006 2005 DifferenceYear to Date Ended December 31,

%

Reference coal price @ 6,700 kcal/kg1Freight costs2

48.489.55

$/ton

48.4611.45

0.02(1.90)


Production and Heat RatesProduction and Heat RatesProduction and Heat RatesProduction and Heat RatesProduction and Heat Rates11111

2006 2005

Notes: (1) We present an allocated heat rate, which is a deemed heat rate for our cogeneration facilities that we derive by dividing the total fuelenergy consumption of such facilities over a specified period of time by the energy produced during such period. This is not a straightforwardexercise, particularly with respect of our Glow SPP 2/SPP 3 hybrid facility, where, for purposes of such calculation, we are required to allocatethe amount of energy produced using steam and the amount of energy used producing gas. We make this allocation on the basis of thecontribution of each energy source to total energy input, which involves subjective judgments and the use of simplifying assumptions.

(2) Includes production of electricity and steam. For these purposes, steam has been converted into MW at a deemed equivalent electricalenergy value.

(3) CFB start-up gas is charged to the coal heat rates for purposes of the figures presented in this table.

0.04(16.58)

Purchases of coal accounted for 5.8 per cent of our total expenses in 2006.The following table sets out average coal costs for the periods indicated:

$/ton $/ton

Note: (1) These are not our actual coal prices, which are subject to various adjustments under the terms of our coal supply contracts, but are abenchmark provided to illustrate the general movements in coal prices over the periods presented.

(2) These reflect our actual freight and insurance costs.

The key determinants of our fuel expenses are the amounts of electricity and steam produced by our facilities andthe efficiency with which we are able to generate such products.

The following table sets out the average energy production levels and heat rates of our facilities for the periodsindicated:

Glow IPPEquivalent energy production (GWh)Fuel consumption (mmBTU, HHV)Heat rate (BTU/kWhe, HHV)Cogeneration facilitiesAllocated energy production (GWh equivalent)2

Gas-fired cogeneration facilitiesCoal-fired cogeneration facility

Fuel consumption (mmBTU, HHV)Gas-fired cogeneration facilities

Coal-fired cogeneration facilityAllocated heat rates (BTU/kWhe, HHV)

Gas-fired cogeneration facilitiesCoal-fired cogeneration facility3

5,328 36,737,712

6,895

6,6721,700

58,950,657 17,431,948

8,835 10,285

4,561 31,710,132

6,953

6,4881,692

58,049,260 17,363,237

8,947 10,284


Glow IPPCogeneration facilities

(Bt million) (Bt million) (Bt million)

67.9631.2

30.7567.2

37.264.0

121.111.3

%

Maintenance ExpensesThe following table sets forth a breakdown of our maintenance costs for the periods indicated:

Year to Date Ended December 31, 2006 2005 Difference

Results of OperationsYear 2006 compared to Year 2005

RevenuesRevenuesRevenuesRevenuesRevenuesRevenues from sale of goods and the rendering of services was Baht 32,593.1 million in 2006, a 14.4 per cent.

increase from Baht 28,494.9 million in the year 2005, the increase was attributable to the following factors: Sales of electricity to EGAT by Glow IPP amounted to Baht 10,705.0 million in 2006, a 24.2 per cent. increase from

Baht 8,616.9 million in the year 2005. This increase was principally due to higher sales to EGAT as a result of themajor maintenance and outage in third quarter 2005 and higher energy payment as a result of higher fuel costs.

Sales of electricity to EGAT by our cogeneration facilities amounted to Baht 9,640.6 million in 2006, a 6.4 per cent.increase from Baht 9,059.0 million in the year 2005. This increase was principally due to higher energy paymentas a result of higher fuel costs despite slightly higher forced outage in 2006 mainly due to unplanned outageson the generating units at Glow SPP 1 and Glow SPP 3 and stronger Thai Baht in 2006 as compare to 2005.

Sales of electricity to industrial customers by our cogeneration facilities amounted to Baht 7,877.2 million in 2006,a 22.9 per cent. increase from Baht 6,411.9 million in the year 2005. This increase was principally due to increasesin volumes of electricity sold coming from the full operation of the expansion facility and increases in the Ftcomponent of the PEA tariff (which is the principal index for sales prices). The Ft increased by 30.25 satang oran increase of 63.2 per cent. year on year, while the base tariff remained unchanged.

Sales of steam to industrial customers by our cogeneration facilities amounted to Baht 4,029.9 million in 2006, a1.7 per cent. decrease from Baht 4,101.4 million in the year 2005. This decrease was principally due to lowertemporary steam volume sold despite higher natural gas prices (to which our steam sales prices are indexed).

Sales of other products and services by our cogeneration facilities amounted to Baht 340.4 million in 2006, a 11.3per cent. increase from Baht 305.7 million in the year 2005. This increase was due to higher selling price fromincreased water cost.

Our other income consists mostly of revenue from net exchange gains, interest income and others.There was net exchange gain in 2006 amounted to Baht 1,156.3 million but there was no net exchange gain in the

year 2005. This exchange gain is derived mainly from the US dollar denominated debt in Glow IPP, which is being servedby the US dollar linked revenue from sales of electricity to EGAT.

We recognized interest income of Baht 173.7 million in 2006, an increase of Baht 105.1 million from Baht 68.6 millionin the year 2005. Our interest income in 2006 was principally attributable to interest earned on cash held in the form ofdeposits, instruments and in reserve accounts under our project financing agreements. Our interest income in 2005 was

Maintenance CostsMaintenance CostsMaintenance CostsMaintenance CostsMaintenance Costs


principally attributable to the same sources. We had significantly higher amounts of cash on hand in 2006 while theinterest rate on deposits was also higher.

Others income in 2006 amounted to Baht 68.8 million, and consisted principally of proceeds from sales of unused spareparts remaining from the previous Long Term Service Agreement and gain from unwinding of interest rate swap as a result of theloan prepayment in Glow SPP 1. Others in the year 2005 amounted to Baht 32.6 million, and consisted principally of sales of scrap.

As a result of the foregoing, total revenues in 2006 amounted to Baht 33,991.8 million, a 18.9 per cent. increase fromBaht 28,596.0 million in the year 2005.

ExpensesCost of sales of goods was Baht 26,170.7 million in 2006, a 17.6 per cent. increase from Baht 22,251.4 million in the

year 2005, which increase was attributable to the following factors:

Glow IPPGlow IPPGlow IPPGlow IPPGlow IPP Glow IPPs cost of natural gas was Baht 7,396.4 million in 2006, a 32.0 per cent. increase from Baht 5,604.7 million

in the year 2005. This increase was principally due to higher production as there was major maintenance andoutage in Q3 2005 and higher natural gas prices, which increased by 12.3 per cent. year on year.

Glow IPPs cost of diesel was Baht 49.0 million in 2006, compare to Baht 183.9 million in the year 2005. Thisdecrease was due to lower diesel dispatch by EGAT than the year before and diesel testing during majormaintenance performed in 2005.

Glow IPPs maintenance costs were Baht 67.9 million in 2006, compare to only Baht 30.7 million in the year 2005.The higher maintenance is resulted from higher non-recurrent routine maintenance cost for parts and labor.

Glow IPPs depreciation and amortization costs were Baht 1,137.2 million in 2006, a 32.7 per cent. increase fromBaht 857.3 million in the year 2005. In 2006, depreciation was higher because there was no depreciationrecorded for three months in the year 2005 as major maintenance was shifted out by three months.

Glow IPPs other costs of sales of goods were Baht 192.7 million in 2006, a 4.4 per cent. increase from Baht 184.5million in the year 2005. Glow IPPs other costs of sales of goods consists of mainly of water, chemical, andgeneral overhead costs, which increased slightly year on year.

Cogeneration facilitiesCogeneration facilitiesCogeneration facilitiesCogeneration facilitiesCogeneration facilities Our cogeneration facilities cost of natural gas was Baht 12,244.5 million in 2006, a 15.4 per cent. increase from

Baht 10,611.3 million in the year 2005. This increase was principally due to increases in the volumes of electricitysold (principally to industrial customers) and general increases in natural gas prices.

Our cogeneration facilities cost of coal was Baht 1,550.4 million in 2006, a 0.9 per cent. increase from Baht1,536.8 million in the year 2005. Despite having provision on coal in 2006, the 2006 coal price FOB remainedstable while freight price declined by nearly 17 per cent. year on year.

Our cogeneration facilities maintenance costs were Baht 631.2 million in 2006, a 11.3 per cent increase fromBaht 567.2 million in the year 2005 mainly due to insurance deductible on outage at Glow SPP1.

Our cogeneration facilities depreciation and amortization costs were Baht 1,839.0 million in 2006, a 8.6 per cent.increase from Baht 1,693.5 million in the year 2005 from the expansion facility.

Our cogeneration facilities other costs of sales of goods were Baht 1,055.7 million in 2006, a 9.2 per cent.increase from Baht 966.7 million in the year 2005. Our cogeneration facilities other costs of sales of goodsconsisted principally of water, chemical and other general overhead costs (most of which were higher in 2006than in 2005), as well as purchases of back-up electricity from EGAT. However in 2006, we have also receivedlow claim bonus insurance rebate for our coverage in year 2004 to 2005.


Selling and administrative expenses in 2006 amounted to Baht 656.9 million, a 23.8 per cent. increase from Baht 530.6million in the year 2005. This was attributable to the following factors:

Depreciation and amortization amounted to Baht 27.3 million in 2006, a 1.4 per cent. increase from Baht 26.9million in the year 2005.

Financial expenses amounted to Baht 98.6 million in 2006, a 104.6 per cent. increase from Baht 48.2 million in theyear 2005. This increase is mainly attributed to guarantee fee refund under the Glow IPP loan facility as a resultof the refinancing done at yearend 2005. However, overall interest expenses have declined as a result of this refinancing.

General selling and administrative expenses amounted to Baht 531.0 million in 2006, a 16.6 per cent. increasefrom Baht 455.5 million in the year 2005. This increase was due to costs associated with the third party expensesrelating to HR and office administration costs, consultant fee, and loss on sale of assets below book value.

In the year 2005, there was a net exchange loss of Baht 448.2 million but there was no a net exchange loss in 2006.

As a result of the foregoing, our total expenses in 2006 were Baht 26,827.5 million, a 15.5 per cent. increase from Baht23,230.2 million in the year 2005.

Profit Before Interest Expenses and Income TaxAs a result of the foregoing, our profit before interest expenses and income tax in 2006 was Baht 7,164.3 million, a

33.5 per cent. increase from Baht 5,365.8 million in the year 2005.Interest ExpensesOur interest expenses in 2006 were Baht 1,285.6 million, a decrease of 12.4 per cent. from Baht 1,468.3 million in the

year 2005. This decrease was principally attributable to the reduction of average interest cost as a result of therefinancing at Glow IPP, from lower net outstanding debt at Glow Energy and loan prepayment at Glow SPP 1.

Income Tax Expenses of SubsidiaryOur income tax expenses of subsidiary in 2006 were Baht 177.3 million, an increase of Baht 173.4 million from Baht

3.9 million in the year 2005. Our income tax expenses in 2006 were principally attributable to taxable income at GlowEnergy, which is out of its BOI full tax exemption period.

Profit After TaxAs a result of the foregoing, our profit after tax in 2006 amounted to Baht 5,701.5 million, a 46.4 per cent. increase

from Baht 3,893.7 million in the year 2005.Net Profit of Minority InterestNet profit of minority interest in 2006 was Baht 105.1 million from Baht 27.8 million in the year 2005. This increase was

principally due to the higher revenue of Glow IPP compare to 2005 (which is the company representing most of theminority interest in our group companies).

Net ProfitAs a result of the foregoing, our net profit in 2006 was Baht 5,596.4 million, a 44.8 per cent. increase from Baht 3,865.8

million in the year 2005.Normalized Net ProfitOur net profit excluding Baht 994.4 million unrealized foreign exchange gains, in 2006 was Baht 4,602.0 million, a 6.7

per cent. increase from Baht 4,312.2 million in the year 2005. This normalized net profit is the basis used to determine ourdividend distribution.


Business

Note: (1) SUEZ Tractebel holds its interest in Glow Energy through its wholly-owned subsidiary, SUEZ - Tractebel Energy Holdings Cooperatieve U.A.and SUEZ Energy (Thailand) Co., Ltd.

2. Business2.1 History

Glow Energy was incorporated as The Cogeneration Public Company Limited in October 1993. Suez Tractebelacquired its initial interest in Glow Ltd in September 1997 and acquired its initial interest in Glow Energy in November 2000(and subsequently de-listed it). Our company was formed through the combination of Glow Energy and Glow Ltd inDecember 2004. In the reorganization, Glow Energy acquired Glow Ltd from SUEZ Tractebel on a book value basis for anet purchase price of Baht 7,114.8 million, bringing Glow IPP, Glow SPP 1 and Glow Demin Water into our corporate group.In February 2005, we changed our name from Glow SPP Public Company Limited to Glow Energy Public CompanyLimited. For a discussion of our reorganization and our corporate structure prior to our reorganization, see Reorganization.

The following diagram sets out our current organizational and ownership structure:


2.1.1 The following timeline sets out key steps in Glow Energys history and developmentOctober 1993 : Glow Energy was incorporated under the name [The Cogeneration Public Company Limited].February 1996 : The Cogeneration Plc. listed its shares on the SET.October 1996 : The Cogeneration Plc.s cogeneration plant began initial commercial operation.March 1999 : The Glow SPP 2/ Glow SPP 3 hybrid plant began commercial operation.November 2000 : SUEZ Tractebel acquired a 62 per cent. stake in The Cogeneration from Sithe Pacific Holdings Limited.February/March 2001 : SUEZ Tractebel increased its shareholding in The Cogeneration to 99 per cent. by purchasing

Banpus shares and conducting a tender offer for remaining outstanding shares.August 2002 : The Cogenerations shares were delisted from the SET.May 2003 : Change Company name from The Cogeneration Plc. to Glow SPP Plc.August 2004 : The 39 MW open cycle phase of the Glow SPP expansion project became commercially

operational.December 2004 : Glow SPP acquired 100 per cent. of Glow Ltd from SUEZ Tractebel. See Reorganization.January 2005 : The steam generation phase of the Glow SPP expansion facility became commercially

operational, providing us with an additional 69 tons per hour of steam supply capacity.February 2005 : Changed Company name for Glow SPP Plc. to Glow Enery Plc.

The following timeline sets out key steps in the history of Glow Ltd beginning with SUEZ-Tractebels initial investmentin Glow Ltd:September 1997 : SUEZ Tractebel formed a joint venture with Hemaraj Land and Development Plc (Hemaraj),

in which each party had a 50 per cent. interest, with respect to Glow Ltd (formerly H-PowerCompany Limited). H-Power at the time owned 100 per cent. of Glow SPP 1 (formerly IndustrialPower Company Limited) and 51 per cent. of Glow IPP (formerly Bowin Power CompanyLimited).

February 1998 : Glow SPP 1s 124 MW cogeneration plant began commercial operation.May 1999 : Glow Ltd acquired the remaining 49 per cent. interest in Glow IPP, bringing its interest to 100

per cent.February 2000 : SUEZ Tractebel increased its interest in Glow Ltd to 75 per cent.2000-2004 : SUEZ Tractebel progressively increased its interest in Glow Ltd to 100 per cent in a series of

transactions that involved an indirect sale of a five per cent interest in Glow IPP to Hemaraj.


January 2003 : Glow IPPs 713 MW plant began commercial operation.December 2004 : Glow SPP acquired 100 per cent. of Glow Ltds shares from Suez Tractebel.January 2005 : Phase 4 Stage 1 became commercially operational.April 2005 : Glow Energy listed its shares on the SETDecember 2005 : Phase 4 Stage 2 became commercially operational.

Although our reorganization has changed our corporate structure, it has not resulted in any significant operationalchanges. Both Glow Energy and Glow Ltd were previously owned by our major shareholder, SUEZ Tractebel, and they andtheir respective subsidiaries were managed and operated as a single group of companies. This remains the case afterour reorganization. Although our key operating assets are owned by separate companies within our corporate group, wemaintain a single, coordinated management structure for all of our group companies and assets, which allows us tomonitor and coordinate the operations of our production facilities.

SUEZ Tractebel, the Selling Shareholder, is itself a subsidiary of SUEZ, an international industrial and services groupwhich provides electricity, gas, water and waste services solutions worldwide. SUEZ Tractebel, which is headquartered inBrussels, Belgium, is a major global energy company, with energy-related businesses throughout North America, SouthAmerica, Europe, the Middle East and Asia. Our company is part of Suezs Electricity & Gas International (EGI) division,one of SUEZs four business lines. EGI develops, builds and operates electricity and gas related energy facilities throughoutNorth America, Latin America, Southeast Asia and the Middle East, including transportation and distribution of liquefiednatural gas.

2.1.2 ReorganizationIn December 2004, SUEZ Tractebel reorganized the structure through which it holds its interests in Glow Energy and

Glow Ltd, its two principal electricity generating assets in Thailand. This reorganization was undertaken to consolidateSUEZ Tractebels holding of its principal Thai assets under a single company.

The reorganization was approved by Glow Energys board of directors on December 13, 2004 and by Glow Energysshareholders, at an extraordinary meeting of shareholders, on December 21, 2004. Because SUEZ Tractebel was deemed to havea special interest in the transaction, it was not permitted to, and did not, vote on the resolution approving the reorganization.

As a result of the reorganization, Glow Ltd has become Glow Energys wholly-owned subsidiary, and our corporatestructure has assumed its current form. Following the reorganization, Glow Ltds financial results will be consolidated withGlow Energys own financial results.

2.2 OverviewWe are one of the largest private electricity generators and providers of industrial utilities in Thailand. We operate

IPP and cogeneration facilities (most of which operate as SPPs under Thailands SPP program) and our core business isto produce and supply electricity to EGAT and electricity and steam to industrial customers in the MIE Area. We haveoperated in Thailand since 1993 and our six principal production facilities are located in Rayong and Chonburi provinceson the industrial eastern seaboard of Thailand. As at December 31, 2006, we had a total generating capacity of 1,709MW of electricity and 968 tons per hour of steam.

Electricity generation and sale is the most important component of our business, accounting for 83.1 per cent. of ourtotal revenues in 2006. Generation and sale of steam is also a significant part of our business, accounting for 11.9 percent. of our total revenues in 2006. We currently own and operate six principal production facilities, four of whichgenerate electricity. Our production facilities, and their operating characteristics as at December 31, 2006, were:

Glow IPP plant, which operates in the Chonburi Industrial Estate and can generate 713 MW of electricity;


() 2004 2005 2006Year Ended December 31,

33.231.221.185.512.71.0

99.20.8

100.0

Revenues from Sales of Goods andRendering of Services

ElectricitySales to EGAT by IPPSales to EGAT by SPPsSales to Industrial Customers

TotalSteamProcessed water

TotalOther Income

Total Revenues

9,036.68,514.85,748.6

23,300.03,465.1276.3

27,041.4214.6

27,256.0

10,705.09,640.67,877.2

28,222.84,029.9340.4

32,593.11,398.7

33,991.8

31.528.423.283.111.91.0

95.94.1

100.0

30.131.722.484.214.31.1

99.60.4

100.0

8,616.99,059.06,411.9

24,087.84,101.4305.7

28,494.9101.1

28,596.0

Glow Energy plant, which operates in the MIE and can generate 358 MW of electricity, 438 tons per hour ofsteam and 1,980 cubic meters per hour of processed water;

Glow SPP 1 plant, which operates in the EIE and can generate 124 MW of electricity, 90 tons per hour of steamand 70 cubic meters per hour of processed water;

Glow SPP 2/ SPP 3 plant, which operates in the MIE and can generate 514 MW of electricity, 190 tons per hourof steam and 150 cubic meters per hour of processed water;

Glow SPP 3 Phase 1 plant, which operates in the MIE and can generate 250 tons per hour of steam and 1,340cubic meters per hour of processed water; and

Glow Demin Water plant, which operates in the EIE and can generate 120 cubic meters per hour of processedwater.

In 2006, we had total revenues of Baht 33,991.8 million and net profit of Baht 5,596.4 million. As at December 31,2006 we had total assets of Baht 54,609.3 million.

2.3 Structure of revenues RevenuesWe derive our revenues primarily from sales of electricity to EGAT and sales of electricity, steam and clarified and demineralized

water to industrial users in the MIE Area. The following table breaks down our revenues by source for the periods indicated:Revenues

(Baht millions) (%) (Baht millions) (%) (Baht millions) (%)

2.4 Competitive strengthsWe believe that our principal competitive strengths are as follows:2.4.1 Critical scale and reliability of operationsWe believe that we have a critical scale of operations in Thailand. Glow IPP has two electrical generators and our

cogeneration facilities have an aggregate of 20 electrical generators. This size is critical to our competitiveness since wehave interconnected our cogeneration facilities to provide a reliable supply of electricity and steam to our industrialcustomers. We have a steam network, which substantially reduces the risk of supply interruption and pressure loss in theevent that any one unit fails. The interconnection of our facilities provides us with a number of advantages: we are ableto dispatch our lowest-costs generating units; improve the reliability of our electricity and steam supply to our customers;


we have greater flexibility to coordinate and rotate maintenance schedules; and we are able to provide greater flexibilityto our customers in scheduling maintenance outages and in supplying peak start-up demand. Overall, these factors haveallowed our cogeneration facilities to maintain high reliability rates as well as to reduce operating costs.

We do not believe that the scale of our cogeneration operations can be replicated in the near term, which we believelimits our competitors opportunities to grow their business. The scale of our operations allows us to capitalize on synergiesbetween our various businesses, including system redundancies, economies of scale, spare parts management, operationalexpertise, automated systems and procedures, qualified and trained personnel and leverage with regard to suppliers. Our size andlong-term presence also allows us to attract a highly motivated and competent workforce and provides us with key marketknow-how and credibility as a long-term player in the Thai energy industry. We operate IPP and cogeneration facilities (mostof which operate as SPPs under Thailands SPP program), giving us a major presence in two distinct sectors of the Thai electricitysupply market and a diverse business footprint in Thailand. In addition, we have full or near-full ownership and sole operationalcontrol of our key assets, which allows us to control strategic business decisions and react quickly and in a coordinatedmanner to market developments. We believe that these factors, in turn, position us to capture new business in the future.

2.4.2 Strategic location and assetsIn addition to a critical scale of operations, we believe that the location and concentration of our assets also

provides us with a key competitive advantage. We are the principal private electricity supplier in the MIE, which is thelargest and most important industrial estate for petrochemical companies in Thailand, and one of the largest industrialutilities suppliers in the MIE Area. We operate a centralized utility park that has allowed us to apply our strategic resourcesin a focused manner to achieve operational strength (including in terms of system redundancies and infrastructureconnections) in an efficient and effective manner. Our presence in the MIE Area provides us with an establishedpresence and business infrastructure in a key area of Thailand and has afforded us an opportunity to develop importantbusiness relationships with some of the largest companies in Thailand. Our facilities are located centrally within the MIEand are surrounded by several key petrochemical producers. Additionally, we have invested in a supply infrastructurethat connects our facilities to our clients via an underground electrical network and an above-ground steam pipenetwork. Industrial activity in the MIE Area is expanding, which we believe will provide us with attractive opportunities forgrowth. We are able to use our existing property and facilities to expand our operations.

We operate IPP and cogeneration facilities (most of which operate as SPPs under Thailands SPP program), givingus a major presence in two distinct sectors of the Thai electricity supply market and a diverse business footprint inThailand. Our assets are also diversified in the sense that we (i) operate both gas- and coal-fired generating units, (ii) sellto industrial customers as well as to EGAT, (iii) sell material amounts of both electricity and steam and (iv) operate IPP,SPP and non-SPP cogeneration facilities. This diversified portfolio of products, customers and plants gives us a majorpresence in the Thai energy supply market.

2.4.3 Established track record as a reliable supplier focusing on customer satisfactionWe have operated in Thailand since 1993 and believe that we have established a reputation as a reliable provider

of electricity and steam offering a high level of service to our customers. Reliability of supply is particularly important toour industrial customers operating in the petrochemicals industry, and we have focused on developing our reliability ofsupply and quality of service in order to differentiate ourselves from our competitors. In the MIE Area, our generating parkis centralized and interconnected and we have a dedicated transmission network. Reliability of supply to industrialcustomers is further enhanced through implementation of critical redundancies and through underground cabling forelectricity customers. We focus on customer satisfaction as a key driver of customer retention and acquisition. We believethat our track record, particularly with our industrial customers in the MIE Area, has strengthened our reputation andpositions us well to compete successfully going forward to capture future growth.

Further, in contrast to certain of our competitors, generation and supply of electricity and steam is our core business. Thisallows us to focus our management resources on business development and operational excellence and to capitalize onsupport from SUEZ Tractebel, which is also principally engaged in electricity and industrial utilities production and supply.


2.4.4 Relationship with SUEZ TractebelWe are a subsidiary of SUEZ Tractebel, a worldwide group whose expertise spans most major areas of the global

electricity and gas industries. This provides us with access to critical experience and technical know-how and allows usto capitalize on and benefit from group-wide relationships. We have formalized certain aspects of this relationship in asponsor support agreement that Glow Ltd has signed with a wholly-owned subsidiary of SUEZ Tractebel which, amongother things, provides us with access to control, operational and project consulting support from SUEZ Tractebel. We havesigned a separate agreement with SUEZ Tractebel in which it has agreed not to directly compete with us in the electricitygeneration business in Thailand. Glow is currently prevented from actively developing projects generating electricityoutside of Thailand for sale within Thailand and/or to EGAT. As SUEZ Tractebels sole vehicle for investment in the electricitygeneration business in Thailand, we believe that we will continue to benefit from this relationship going forward, under theterms of these agreements and otherwise.

2.4.5 Stability of revenues and cash flowsMost of our sales of electricity and steam are made under long-term sales contracts with durations of approximately

15 years for our industrial customers, and between 21 and 25 years for sales to EGAT. Most of our current contracts withindustrial customers expire between 2010 and 2015, while the EGAT power purchase agreements expire between 2016and 2025 for our SPPs and in 2028 for Glow IPP. This provides our business an element of stability and predictability andaffords us some level of insulation from competition. In addition, most of our industrial customers are in the petrochemicalindustry and, due to the nature of petrochemical production processes, have relatively high load factors and relativelystable levels of demand.

2.5 Business strategies2.5.1 OverviewOur vision is to optimize profitability through operational excellence and value-creating growth. We have crafted a

business strategy that takes into account four perspectives: commercial, operational, financial and human resources. We havebalanced our short- and long-term objectives to create a well-defined set of priorities and action plans for our company. Forour existing operations, this involves enhancements in utilization, efficiency and reliability and achieving overall cost reductions,optimizing our cost of capital and strengthening internal reporting systems and procedures. We believe that our businessstrategies will prepare us for growth opportunities with new and/or existing industrial customers as well as position ourselvesfavorably for a new round of IPP bidding if and when such opportunities arise. With the assistance of SUEZ Tractebel, we planto continue to develop a highly motivated and competent Thai management team and workforce to support these efforts.

2.5.2 Commercial PerspectiveFrom a commercial perspective, our focus is on (a) growing our core business, (b) proactively managing our client relationships,

(c) optimizing fuel costs and securing our fuel supply, and (d) maintaining and enhancing our local knowledge and relationships.(a) Pursue growth of our core businessWe intend to grow our core business by both increasing our capacity to meet growing industrial demand for

electricity and steam and by positioning ourselves to compete successfully for opportunities to install new generatingcapacity in Thailand. For example, in 2005, we have completed the first and second stage of Glow Energys capacityexpansion in the MIE, allowing us to produce an additional 78 MW of electricity and 138 tons per hour of steam. We willconsider, in addition to these projects, further opportunities to expand and strengthen our ability to serve industrialcustomers (See Expansion and Potential section). We intend to continue to seek opportunities to acquire new high-valueindustrial customers and grow to follow the demand of our existing customers. In addition, we will focus on maintainingand enhancing our operations, continuing to provide high-quality, reliable service, performing our obligations under ourEGAT power purchase agreements and strengthening our institutional relationships within Thailand (including with ourregulators), all of which we believe will put us in a favorable position to bid for new electricity generation projects inThailand that may arise in the future. We have, in addition, established a dedicated team to examine the feasibility ofour participation in any potential round of bidding for new IPP projects.


(b) Proactively manage our industrial customer relationshipsOur industrial customer base is a key component of our business. Our industrial customers are principally involved in

the petrochemical production process, which relies upon stable supply of electricity and steam to avoid start-up costsassociated with interruption during production. As such, our focus is on strengthening our relationships with existingcustomers, not only by providing them with a reliable supply of electricity and industrial utilities, but by working closely withthem to further understand their needs and to develop ways in which to further improve our levels of service. We focuson various action plans to improve customer satisfaction by improving supply reliability, communication, incident handlingand problem solving and firmly believe that customer satisfaction is the key to customer retention and acquisition of newcustomers or new contracts from existing customers. We believe that our service reliability sets us apart from ourcompetitors and positions us favorably as the electricity and industrial utility supplier of choice in our markets. We targetsteam customers and high-load electricity customers who value reliability of supply.

(c) Optimize our fuel management by reducing fuel cost and ensuring supply availabilityFuel is our major cost item and our business is exposed to fluctuations in price and availability of fuel (and in

particular coal). We commit significant resources to fuel management and will continue to do so. We seek opportunitiesto enhance our coal procurement arrangements to reduce our coal and freight costs, which directly affect ourprofitability. We continue to examine our open positions on fuel costs and, in connection with our ongoing efforts toprotect our company from fuel price fluctuations, we may in the future enter into hedging arrangements from time totime. Our primary fuel supply arrangements seek to maintain a sufficient supply of fuel that is critical to our ability tooperate our business and we also seek to maintain prudent levels of back-up fuel supplies.

(d) Maintain and enhance local knowledge and relationshipsWe have a long-term commitment to Thailand and our core business is to generate and supply electricity and steam

to customers in Thailand. We focus on identifying key individuals for us to train to lead our company in coming years aswell as on strengthening our institutional relationships with EGAT, the government and government authorities and ourregulators.

2.5.3 Operational perspectiveFrom an operational perspective, our focus is on (a) maintaining reliability and availability of our generating units, (b)

improving our fuel efficiency, (c) reducing our operating costs and (d) effectively managing our projects underconstruction.

(a) Improve reliability and capacity utilizationOur plant capacity utilization can be improved through capacity enhancement measures and reducing the amount

of unplanned outage or reducing the days needed for scheduled maintenance. We continually seek to improveour performance in all areas through various measures, such as condition and performance monitoring, preventiveand effective maintenance and reduction of forced outages through root cause analysis and enhanced operatingprocedures.

(b) Improve fuel efficiencyFuel is a major cost item for us and our fuel efficiency is an important driver of our profitability. We seek to

continually improve our operational efficiency by optimizing dispatch, critical equipment monitoring, work processes andenergy loss monitoring and mitigation.

(c) Reduce operational costsWe seek to minimize our operational and maintenance costs by creating transparency in the manner and timing at

which the costs are incurred and by exercising good judgment with respect to the need for those expenses. We havea focus on cost management through reliable systems and control procedures. We have already achieved substantialcost improvements in our long-term service agreements. In the future, we hope to be able to refurbish parts used in GlowIPPs major inspections, which would result in substantial cost reductions. Our relationship with and technical support fromSUEZ Tractebel enables us negotiate effectively with suppliers and to source equipment and parts on competitive terms.


(d) Execute projects effectivelyWe are, on an ongoing basis, either constructing new power plants to serve new customers demand, implementing

projects to enhance performance and/or constructing distribution lines to our customers. These projects are handled bya dedicated team of employees in an organized and prudent manner in order to avoid delay, poor performance andthe financial consequences thereof.

2.5.4 Financial PerspectiveMaintain and improve our financial positionOur internal focus on excellence includes financial management. We actively evaluate opportunities to minimize the

weighted average cost of capital by optimizing our capital structure while reducing our exposure to financial risks. Weseek to avoid cash foreign exchange risk by matching the currency of costs and debt service payments with thecurrency of free cash flow. We have a prudent but flexible interest rate risk management system which is supported bythe expertise of the SUEZ finance departments who assist us in determining the amount and timing of fixing of interestrates. We seek to improve our management reporting systems and procedures by improving the reliability of the systemsand reviewing and documenting the processes. We are in the process of implementing the provisions of the Sarbanes OxleyAct, Section 404, which applies to our company as a subsidiary of SUEZ, who is listed in the United States and we havesigned - off the Sarbanes Oxley Section 404 attestation letter for the 2006 YE results. The Sarbanes-Oxley Act seeks to promotecorporate responsibility, increase public disclosure, and improve the quality and transparency of financial reporting andauditing. Section 404 of the aforementioned Act makes company executives explicitly responsible for establishing, evaluating,and monitoring the effectiveness of their company's internal control structure. In addition, we will actively monitor ourcash balance, in conjunction with our capital expenditure plans, so that in the long run, shareholders value is maximized.For further details on Sarbanes - Oxley Act, see the Internal Control

2.5.5 Human Resources PerspectiveOur People are the foundation of our success.Glow Energy employmore than 400 people in Thailand, at the Head Office in Bangkok, and Power Plants in Rayong

and Chonburi.We believe that our people are the foundation of our success. Employees are one of the most valuable assets of

this organization. They enjoy a working environment that encourages commitment, teamwork and innovation. Thisphilosophy is supported by the strength of our leadership, our high technical standards and high regard for safety.

We work in a safe and satisfying environment. We commit ourselves to being a world-class operator of our facilitiesand conduct this core business with full attention to Environmental, Health and Safety concerns that affect ouremployees, clients and the community.

It is our duty to respond to the expectations of our customers by providing them with human resources suited to their needs.We create value for our shareholders and customers through commitment and knowledge of employees; we seek

to implement best practices through human resource information systems and HR policies and standardized procedures.We focus on employee training and development and strengthen our employees ability to enhance our organizationcapabilities. We develop training courses for current and future employees to facilitate their integration and to meet theneeds of new business. We enable every employee to develop, both for him or herself and for the company. SUEZEnergy provides support and guidance in developing best practices for our operation.

We support our people in realizing their full potential by offering challenging work, project assignments, on-the-jobdevelopment, formal training and education. We seek to attract and retain qualified professionals who can adhere tothe Glow culture, which is based on communication, courage, adaptability, loyalty, unity and commitment. We also offerhighly competitive remuneration and an attractive range of benefits to our employees.

As we all know, our success comes from our people; we choose to treat each other with trust and respect andmaintain a healthy work-life balance. The ability of our experienced teams in delivering a reliable product from ourgenerating units is our most valued and rewarding strength.


3.1 Products and production facilitiesOur core business is the generation and supply of electricity to EGAT and the generation and supply of electricity andsteam, with clarified and demineralized water as secondary products, to industrial customers within the MIE Area andnearby.

3.1.1 Products

(a) ElectricityWe produce electricity for sale both to EGAT and to industrial customers. Electricity sold to EGAT, the single

wholesale buyer of electricity in Thailand, is routed into EGATs national transmission system. EGAT sells this electricity toPEA and MEA, which distribute it through their respective distribution networks to end users throughout Thailand. We ownand operate an interconnected system of supply sources and transmission lines and the various companies within ourlegal group have entered into contracts to sell electricity to industrial customers in the MIE Area. While the contracts ofGlow Energy, Glow SPP 2 and Glow SPP 3 are principally with industrial customers in the MIE, they also have otherindustrial customers elsewhere in the MIE Area. Glow SPP 1 sells to industrial customers in the EIE and AIE. We supply theelectricity that we sell to our customers through dedicated transmission lines. This electricity is used by our industrialcustomers for a variety of industrial purposes, primarily relating to petrochemical and petrochemical-related manufactur-ing and production processes.

(b) SteamWe supply steam to industrial users in the MIE Area. Glow Energy, Glow SPP 2 and Glow SPP 3 principally sell to

industrial customers in the MIE, while Glow SPP 1 sells to industrial customers in the EIE and AIE. The steam that we sellto our customers, at varying levels of pressure, is used for a variety of industrial purposes. Because of inherent limitationson the ability to transport steam over long distances, most of our steam customers are located within four kilometers ofour steam generating facilities.

(c) Processed waterWe also sell clarified and demineralized water to industrial users in the MIE Area, which is not a core business line

in itself (although the production and sale of demineralized water is Glow Demins core business). However, it iscomplementary to our electricity and steam generation businesses, and we entered into the business in order to be ableto internally generate the water that we need for our own production purposes. We sell excess processed water that weproduce to industrial customers.

Products andProduction Facilities


2549 2548

3.1.2 Production facilitiesThe following table sets out certain information, including key capacity statistics, relating to our production facilities

as at December 31, 2006:

Production Facilities

Glow IPPGlow EnergyGlow SPP 1Glow SPP 2/ SPP 3Glow SPP 3 Phase 1Glow Demin Water

Clarified Demin.

Total

Production CapacityElectricity(MW)

Steam(tons/hr)

CIEMIEEIEMIEMIEEIE

Plant Name

713358124514

--

Jan. 2003Oct. 1996Feb. 1998Mar. 1999Jul. 1994

Nov. 1999

CommercialOperation Date

-43890

190250

-

-1,500

--

1,110-

-48070

150230120

Source : Glow Energy.1,709 968 2,610 1,050

Location

Although ownership of our plants rests with separate legal entities within our corporate group, we manage all of themcentrally through a single, coordinated management structure. This allows us to monitor the operations of our facilities,coordinate their operation and implement policy on a group-wide basis.

(a) Glow IPP plantThe Glow IPP plant is a natural gas-fired combined cycle plant that began commercial operation in January 2003.

The plant operates as an independent power producing facility under Thailands IPP program, generating and sellingelectricity to EGAT. The Glow IPP plant, as at December 31, 2006, had an electricity generating capacity of 713 MW.

Processed Water(cu.m./hr)


(b) Glow Energy plantThe Glow Energy plant is comprised of Glow Energy Phase 2 and Glow Energy Phase 4. The Glow Energy Phase 2

plant is a combined cycle natural gas-fired cogeneration plant that began commercial operation in October 1996. TheGlow Energy Phase 4 plant is a cogeneration plant that began commercial operation in February 2005. They are locatedin the MIE and, as at December 31, 2006, had an electricity generating capacity of 358 MW and a steam generatingcapacity of 438 tons per hour. Electricity generated by the Glow Energy plant is sold both to EGAT and to industrialcustomers in the MIE and steam is sold to industrial customers in the MIE. In addition, the Glow Energy plant also haswater treatment facilities that can produce 1,500 cubic meters per hour of clarified water and 480 cubic meters per hourof demineralized water for consumption within the Glow Energy plant and for sale to industrial customers.

(c) Glow SPP 1 plantThe Glow SPP 1 plant is a natural gas-fired combined cycle cogeneration facility that began commercial operation

in February 1998. The plant is located in the EIE and as at December 31, 2006 had an electricity generating capacity of124 MW, steam generating capacity of 90 tons per hour and a demineralized water production capacity of 70 cubicmeters per hour. We sell electricity generated by the Glow SPP 1 plant to EGAT and to industrial customers in the EIE. Wesell steam and processed water from the plant to industrial customers in the EIE.

(d) Glow SPP 2/ SPP 3 plantThe Glow SPP 2/ SPP 3 plant is a hybrid natural gas and coal-fired cogeneration facility located in the MIE that

began commercial operation in March 1999. Technically, although we consider the plant to be a single generationfacility, the gas-fired generation portion of the facility is owned by Glow SPP 2 and the coal-fired portion is owned byGlow SPP 3. The plant is divided in two parts: (i) two 35 MW gas-fired gas turbine units and two heat recovery units and(ii) two 222 MW hybrid cogeneration units, each comprising a steam turbine and coal-fired circulating fluidized bed boiler.The Glow SPP 2/ Glow SPP 3 plant had, as at December 31, 2006, an electricity generating capacity of 514 MW, a steamgenerating capacity of 190 tons per hour and a demineralized water production capacity of 150 cubic meters per hour.We sell electricity generated by the Glow SPP 2/ Glow SPP 3 plant to EGAT and to industrial customers in the MIE Area.We also sell steam and processed water from the plant to industrial customers in the MIE.

(e) Glow SPP 3 Phase 1 plantThe Glow SPP 3 Phase 1 plant consists of a natural gas fired D type boiler for steam generation and a water

production plant and began commercial operation in July 1994. It is located in the MIE and is capable of generating 250tons per hour of steam, 1,110 cubic meters per hour of clarified water and 230 cubic meters per hour of demineralizedwater. Because this facility uses relatively inefficient boilers for steam generation, we do not enter into long-term steamsupply contracts with respect to this facility, but rather use it to satisfy short-term demand, start-up demand and excesscapacity and to strengthen our overall system reliability. We principally sell the processed water genera

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Documents

outstanding usd loan

glows management

thb outstanding loan

existing procedures

annual dividend normal

annual dividend27

usd loans

improvement of environmental