Results of operation for 1997 (EGCOMP)

No. EGCO 320/65 Febuary 27 , 1998 Attn :The President of the Stock Exchange of Thailand Subject :Financial statements and report concerning financial results of operation for the year 1997 We submit herewith the financial statements by equity method and the consolidated financial statements of Electricity Generating Public Company Limited and subsidiaries for the year ended December 31,1997 and 1996 of which the operating results for the year 1997 has been changed exceeding 20% from the same period in 1996 In order to comply with the Regulation of the Stock Exchange of Thailand Re: Rules , Conditions , and Procedure Governing Preparation and Filing of Financial Statements and Reports Concerning Financial Status and Results of Business Operations of Listed Companies (No.1) B.E. 2541 , we would like to clarify that for the year 1997 the company had a net loss of Bath 5,463.91 MM. which represented a 452.29% fall from a net profit of Bath 1,550.98 MM. during the same period in 1996. This decline in net profit was due to :- 1) a foreign exchange loss of two subsidiaries resulted from the introduction of the managed floatation of the Bath for the amount of Bath 7,235.08 MM. 2) loss on disposal of marketable securities , debentures and investment units for the amount of Bath 379.79 MM. After recognition the net loss from the two subsidiaries resulted from foreign exchange loss and loss from the aforementioned disposal, the company's operating results declined significantly comparing to last year. In addition , The Board of Directors believes that the impact from this foreign exchange write off policy , though posted loss in 1997 profit and loss statement with large amount , would bring in greater financial benefit to the company because of its positive tax impact and the small annual realized loss on exchange rate from 10-15 years amortized US Dollar debt of which the debt service coverage ratio still exceed 1.2 over the loan life. Furthermore, the company's net profit per share before extraordinary item was Bath 3.40 which is still higher than last year. Your Sincerely, Mr. Worawit Khamkanist Managing Director Accounting & Budget Division Tel : 513-2330 EXT.1800 Fax: 513-7335-6