F/S THE SECOND QUARTER 1998 EGCOMP

6.2 Investments in subsidiary, associated and other companies in the consolidated financial statements are as follows : Type of business Subsidiary companies P.T. BORNEO INDOBARA Mining industry Associated companies EGCO Mining Company Limited Mining industry AMATA EGCO Power Company Limited Electricity generating Bangchak Power Company Limited Electricity generating CM ESCO Company Limited ESCO Wood Company Limited Other companies Thai LNG Power Company Limited PMI International Company Limited Total investments P.T BORNEO INDOBARA , AMATA EGCO Power Company Limited and Bangchang Power Company Limited have not yet commenced their trading operations. Unaudited Page 11 6.2 cont. Consolidation 1998 1997 Investments Investments Paid-up share % of Amount Paid-up share % of Amount capital Interest capital Interest (Baht'000) (Baht'000) (Baht'000) (Baht'000) USD 1,000 52.5 15,860 - - - - - - 50,000 48 24,000 1,000,000 29.7 297,000 572,500 30 172,599 40,000 30.0 12,000 40,000 30 12,000 2,000 50.0 1,000 250 50 125 20,000 45.0 9,000 - - - - 10.0 37,499 - 10 37,499 - 10.0 300 - - - 372,659 246,223 Unaudited Reviewed Electricity Generating Public Company Limited and its subsidiaries Page 12 Notes to the financial statements and consolidated financial statements - June 30, 1998 continued Long-term loans 7. The long-term loans of subsidiaries are denominated in Thai Baht and US Dollar as follows : Consolidation 1998 1997 (Baht'000) (Baht'000) Long-term loans in US Dollars 16,944,099 10,748,058 Long-term loans in Thai Baht 5,214,410 5,546,080 22,158,509 16,294,138 Less: Current portion of long-term loans (1,248,777) (811,349) 20,909,732 15,482,789 The two subsidiaries entered into the interest rate swap agreements to convert a floating interest rate based on LIBOR plus a margin to a fixed interest rate of 8.0275% - 8.22% per annum for the loans of US Dollars 257 million. The loan of US Dollars 141 million bears fixed interest rate at 8.85% per annum. In addition a subsidiary entered into a currency swap agreement to convert US Dollars loan of 92 million to Thai Baht currency at a fixed interest rate at 11% per annum. The Master Agreements have certain clauses which state that cash reserves have to be provided from the proceeds of sales of electricity for repayment of principal and payment of interest which are due within one year and other conditions as specified in the agreements. In addition, a reserve for exchange risk shall be provided as described in Note 5 to the financial statements. Unaudited Reviewed Electricity Generating Public Company Limited and its subsidiaries Page 13 Notes to the financial statements and consolidated financial statements - June 30, 1998 continued Land, building and equipment of power plants which are specified in the agreements are mortgaged as collateral for long-term loans of the two subsidiaries and there are assignment agreements under these borrowing agreements. Debentures 8. Consolidation 1998 1997 (Baht'000) (Baht'000) Debentures 10,292,812 10,707,186 Less: Current portion of debentures (324,010) (287,048) 9,968,802 10,420,138 Debentures are borrowings of the two subsidiaries in Thai Baht bearing interest at 11.25% - 11.5625% per annum. Land, building and equipment of power plants which are specified in the agreements are mortgaged as collateral for the above debentures and there are assignment agreements under these borrowing agreements. Cost of sales 9. In accordance with the company's accounting policy, repair and maintenance expenses as described in the annual maintenance schedule will be recorded as expense when they are incurred, commencing from the second quarter of 1998, a reserve for repair and maintenance based on the annual budget of major repair and maintenance expenses is included in the interim financial statements. The repair and maintenance expenses of Baht 410 million are included in this quarter of which the amount of Baht 100 million related to the first quarter. Unaudited Reviewed Electricity Generating Public Company Limited and its subsidiaries Page 14 Notes to the financial statements and consolidated financial statements - June 30, 1998 continued Currency exchange losses (gains) 10. Currency exchange losses (gains) mainly relate to the conversion of long-term loans in US Dollar to Thai Baht at the closing rate as follows : June 30, 1998 US Dollar 1 = Baht 42.5897 March 31, 1998 US Dollar 1 = Baht 39.0807 December 31, 1997 US Dollar 1 = Baht 47.5560 Share of profits (losses) from subsidiaries for the second quarter and six-month period of 1998 includes losses on exchange of Baht 1,047 million and gains on exchange of Baht 1,585 million respectively. Commitment and contingent liabilities 11. (a) As at June 30, 1998 the company has commitments under contracts for construction of Baht 281.6 million. (b) As at June 30, 1998, the company has not entered into forward exchange contracts to cover the exchange risk relating to long-term loans of US Dollars 398 million. However, such exchange risk will be covered by "The First Amendment to Power Purchase Agreement" as described in note 4. Unaudited Reviewed Electricity Generating Public Company Limited and its subsidiaries Page 15 Notes to the financial statements and consolidated financial statements - June 30, 1998 continued Subsequent event 12. On July 23, 1998, EGAT who is the only major shareholder of the company has sold 78 million shares to the co-investor; CLP Power Projects (Thailand) Limited and as such reducing its percentage of shareholding from 40.50% to be 25.60% and CLP Power Projects (Thailand) Limited would hold 14.90% of total shares. The major shareholders of company are EGAT and CLP Power Projects (Thailand) Limited. Comparative figures 13. The presentation of interim financial statements is in accordance with the announcement of the Stock Exchange of Thailand dated February 28, 1997. The comparative figures of 1997 interim financial statements have been amended accordingly. Auditors' report page 1.