F/S Q3-1998 OF EGCO AND CONSOLIDATED (CORRECTED)

Report of the auditors to the shareholders of Electricity Generating Public Company Limited We have performed a review of the balance sheet of Electricity Generating Public Company Limited and the consolidated balance sheet of Electricity Generating Public Company Limited and its subsidiaries as at September 30,1998,and the related statements of income (loss) and change in shareholders' equity for the third quarter and the nine-month period then ended, and the related consolidated statements of income (loss) and change in shareholders' equity for the third quarter and the nine-month period then ended, in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. The financial statements and consolidated financial statements for the third quarter and the nine-month period ended September 30, 1997, which are presented for comparative purpose, were reviewed by another auditor, whose report dated October 30, 1997 was qualified for non-compliance with generally accepted accounting principles in respect of the deferral of exchange losses of two subsidiaries. As described in note 11 to the financial statements, these two subsidiaries recorded the exchange losses arising from the change to a managed float system as deferred expenses. However, in the government financial statements for the year ended December 31, 1997, the company has changed the method of accounting to write off the exchange losses as extraordinary expenses in the statement of income (loss) in compliance with generally accepted accounting principles. The financial statements and consolidated financial statements for the third quarter and the nine-month period ended September 30, 1997, therefore, have been restated to reflect this proper accounting for exchange losses. Page 2 Based on our review, we are not aware of any material modifications that should be made to the aforementioned financial statements for them to be in conformity with generally accepted accounting principles. NANGNOI CHAROENTHAVEESUB Certified Public Accountant (Thailand) No. 3044 PricewaterhouseCoopers Audit and Business Advisory Services Limited October 19, 1998 Electricity Generating Public Company Limited and its subsidiaries Balance sheets as at September 30, 1998 and 1997 Notes The company only Consolidation (Restated) (Restated) 1998 1997 1998 1997 (Baht'000) (Baht'000) (Baht'000) (Baht'000) ASSETS Current assets Cash in hand and at banks 746,256 29,177 775,741 32,578 Short-term investments Deposits at banks and financial institutions 1,533,031 2,679,419 1,768,828 6,029,137 Deposits at banks and financial institutions used as collateral 7 - - 7,124,270 2,233,865 Marketable securities 199,726 610,705 89,823 610,705 Account receivable-trade - - 1,506,043 1,381,190 Advance to related companies 4 - 4,897 33,202 324 Spare parts and supplies, net - - 2,022,794 1,795,227 Other current assets Interest receivable 44,935 5,788 167,683 108,291 Others 98,599 64,084 79,832 254,604 Total current assets 2,622,547 3,394,070 13,568,216 12,445,921 Deposits at financial institutions - - 59,695 46,157 Deposits at financial institutions used as collateral 5 - - 2,810,004 1,670,600 Investments in subsidiary, associated and other companies 6 11,009,293 8,985,846 978,609 321,729 Property, plant and equipment, net 7,8 692,399 439,918 28,831,334 30,081,365 Other assets Deferred organisation expenses, management fee and others 1,288 - 297,896 339,009 Deferred advisory fee - - 403,343 460,928 Others 12,080 11,089 168,316 82,437 TOTAL ASSETS 14,337,607 12,830,923 47,117,413 45,448,146 The notes on pages 6 to 17 form an integral part of the financial statements. Auditors' report page 1 and 2. Unaudited Reviewed Page 3 Notes The company only Consolidation (Restated) (Restated) 1998 1997 1998 1997 (Baht'000) (Baht'000) (Baht'000) (Baht'000) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable - - 113,489 135,255 Current portion of long-term loans and debentures 7,8 - - 1,508,286 1,297,455 Other current liabilities Interest payable - - 852,405 833,384 Reserve for maintenance expenses - - 349,687 - Others 90,392 74,858 297,694 260,943 Total current liabilities 90,392 74,858 3,121,561 2,527,037 Long-term loans 7 - - 19,734,548 19,744,903 Debentures 8 - - 9,968,802 10,420,138 TOTAL LIABILITIES 90,392 74,858 32,824,911 32,692,078 MINORITY INTEREST - - 45,287 3 Shareholders' equity Share capital 5,227,092 5,212,338 5,227,092 5,212,338 Share premium 8,526,184 8,496,676 8,526,184 8,496,676 Legal reserve 19,793 19,793 19,793 19,793 Retained earnings (accumulated deficit) 474,146 (972,742) 474,146 (972,742) TOTAL SHAREHOLDERS' EQUITY 14,247,215 12,756,065 14,247,215 12,756,065 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 14,337,607 12,830,923 47,117,413 45,448,146 Director Date October 19, 1998 Unaudited Reviewed Electricity Generating Public Company Limited and its subsidiaries Page 4 Statements of income (loss) for the third quarter and the nine-month period ended September 30, 1998 and 1997 Notes The company only Consolidation 1998 1997 (Restated) 1998 1997 (Restated) third quarter nine-month third quarter nine-month third quarter nine-month third quarter nine-month (Baht'000) (Baht'000) (Baht'000) (Baht'000) (Baht'000) (Baht'000) (Baht'000) (Baht'000) REVENUES Sales 4 - - - - 2,061,213 6,867,598 1,869,481 5,615,064 Service income - - - - 10,104 21,439 935 5,684 Other income Interest income 93,491 325,342 46,707 221,572 362,666 1,072,612 211,140 669,742 Others 8,052 86,971 22,269 91,273 12,179 99,913 21,239 100,767 TOTAL REVENUES 101,543 412,313 68,976 312,845 2,446,162 8,061,562 2,102,795 6,391,257 EXPENSES Cost of sales 4,9 - - - - 958,865 2,707,051 720,353 1,910,817 Cost of services - - - - 14,072 42,883 22,227 25,710 Administrative expenses 44,555 141,890 122,259 283,768 105,074 331,399 168,521 489,521 Interest expenses - - - - 823,294 2,541,435 837,573 2,267,973 Currency exchange losses (gains) 10 - - - - (893,045) (2,477,855) - 67,985 Directors' remuneration 1,219 3,989 1,558 4,424 3,730 11,995 3,886 10,890 TOTAL EXPENSES 45,774 145,879 123,817 288,192 1,011,990 3,156,908 1,752,560 4,772,896 Net income (loss) before share of profits from subsidiaries, income tax and extraordinary item 55,769 266,434 (54,841) 24,653 1,434,172 4,904,654 350,235 1,618,361 Share of profits from subsidiaries 1,378,907 4,642,129 (3,217,148) (2,020,212) - - - - Income tax (22,394) (22,394) (288) (29,069) (22,394) (22,394) (26,303) (106,911) Minority interest - - - - 504 3,909 - - Net income (loss) before extraordinary item 1,412,282 4,886,169 (3,272,277) (2,024,628) 1,412,282 4,886,169 323,932 1,511,450 Extraordinary item : Exchange losses (net of income tax of Baht 26,016 thousand for third quarter and Baht 77,840 thousand for nine months of 1997 11 - - - - - - (3,596,209) (3,536,078) NET INCOME (LOSS) FOR THE PERIOD 1,412,282 4,886,169 (3,272,277) (2,024,628) 1,412,282 4,886,169 (3,272,277) (2,024,628) EARNINGS (LOSS) PER SHARE (Baht) Net income (loss) before extraordinary item 2.70 9.35 (6.23) (3.89) 2.70 9.35 0.62 2.90 Extraordinary item (net of income tax) - - - - - - (6.85) (6.79) Net income (loss) 2.70 9.35 (6.23) (3.89) 2.70 9.35 (6.23) (3.89) The notes on pages 6 to 17 form an integral part of the financial statements. Auditors' report page 1 and 2. Electricity Generating Public Company Limited and its subsidiaries Statements of change in shareholders' equity for the third quarter and the nine-month period ended September 30, 1998 and 1997 The company only 1998 1997 (Restated) third quarter nine-month third quarter nine-month (Baht'000) (Baht'000) (Baht'000) (Baht'000) SHARE CAPITAL Balance brought forward 5,227,092 5,212,338 5,212,338 5,200,000 Increase - 14,754 - 12,338 Balance carried forward 5,227,092 5,227,092 5,212,338 5,212,338 SHARE PREMIUM Balance brought forward 8,526,184 8,496,676 8,496,676 8,472,000 Increase - 29,508 - 24,676 Balance carried forward 8,526,184 8,526,184 8,496,676 8,496,676 LEGAL RESERVE Balance brought forward 19,793 19,793 19,793 19,793 Balance carried forward 19,793 19,793 19,793 19,793 Unappropriated retained earnings (accumulated deficit) Balance brought forward (938,136) (4,412,023) 2,299,535 2,111,093 Net income (loss) for the period 1,412,282 4,886,169 (3,272,277) (2,024,628) Dividend - - - (1,040,000) Directors' bonus - - - (19,207) Balance carried forward 474,146 474,146 (972,742) (972,742) Total shareholders' equity 14,247,215 14,247,215 12,756,065 12,756,065 Unaudited Reviewed Page 5 Consolidation 1998 1997 (Restated) third quarter nine-month third quarter nine-month (Baht'000) (Baht'000) (Baht'000) (Baht'000) SHARE CAPITAL Balance brought forward 5,227,092 5,212,338 5,212,338 5,200,000 Increase - 14,754 - 12,338 Balance carried forward 5,227,092 5,227,092 5,212,338 5,212,338 SHARE PREMIUM Balance brought forward 8,526,184 8,496,676 8,496,676 8,472,000 Increase - 29,508 - 24,676 Balance carried forward 8,526,184 8,526,184 8,496,676 8,496,676 LEGAL RESERVE Balance brought forward 19,793 19,793 19,793 19,793 Balance carried forward 19,793 19,793 19,793 19,793 Unappropriated retained earnings (accumulated deficit) Balance brought forward (938,136) (4,412,023) 2,299,535 2,111,093 Net income (loss) for the period 1,412,282 4,886,169 (3,272,277) (2,024,628) Dividend - - - (1,040,000) Directors' bonus - - - (19,207) Balance carried forward 474,146 474,146 (972,742) (972,742) Total shareholders' equity 14,247,215 14,247,215 12,756,065 12,756,065 The notes on pages 6 to 17 form an integral part of the financial statements. Auditors' report page 1 and 2. Unaudited Reviewed Electricity Generating Public Company Limited and its subsidiaries Page 6 Notes to the financial statements and consolidated financial statements - September 30, 1998 Basis of preparation of the interim financial statements 1. The financial statements on pages 3 to 5 are unaudited and have been prepared from the accounting records of the company and its subsidiaries. In the opinion of Management, these interim financial statements present fairly the financial position and the results of their operations and change in shareholders' equity of the company and its subsidiaries in conformity with generally accepted accounting principles. These interim financial statements should be read in conjunction with the financial statements and the consolidated financial statements for the year ended December 31, 1997. Basis of consolidation 2. The consolidated financial statements include the financial statements of the following subsidiaries : 1998 1997 Percentage Percentage of holding of holding Rayong Electricity Generating Company Limited 99.99 99.99 Khanom Electricity Generating Company Limited 99.99 99.99 EGCO Engineering & Service Company Limited 99.99 99.99 EGCO Joint Ventures & Development Company Limited 99.99 99.99 EGCO Mining Company Limited 69.99 40.00 Intercompany transactions have been eliminated in the consolidated financial statements. Unaudited Reviewed Electricity Generating Public Company Limited and its subsidiaries Page 7 Notes to the financial statements and consolidated financial statements - September 30, 1998 continued Principal accounting policies 3. A summary of significant accounting policies of the company is set out below. (a) Short-term investments Investments in marketable securities are stated at the lower of aggregate cost or market value. (b) Spare parts and supplies Spare parts and supplies are stated at cost less provision for obsolete stock. Cost is calculated by the moving average basis. The provision for obsolete stock is mainly calculated by dividing the balances of spare parts and supplies on hand at the year end by the number of years remaining under the Power Purchase Agreement with Electricity Generating Authority of Thailand (EGAT). (c) Investments in subsidiary, associated and other companies Investments in subsidiaries and associated companies are accounted for under the equity method . Investments in other companies are accounted for under the cost method. (d) Property, plant and equipment Property, plant and equipment are stated at cost. (More)