TERIM FINANCIAL STATEMENT Q2-1999

Spare parts and supplies Spare parts and supplies are stated at cost less provision for obsolete stock. Cost is calculated based on the moving average basis. The inventories are categorised as specific spare parts, which are used for specific plant equipment, and common spare parts which are for general use. The provision for specific spare parts is calculated by dividing the balances of specific spare parts and supplies on hand at the year end by the number of years remaining under the Power Purchase Agreements with the Electricity Generating Authority of Thailand. The provision for common spare parts is generally provided, based on an aging analysis. Investments in subsidiaries, associates and others Investments in subsidiaries and associates are accounted for under the equity method. Investments in others are accounted for under the cost method. Unaudited Reviewed Electricity Generating Public Company Limited Page 9 Notes to the interim company financial statements and consolidated financial statements - June 30, 1999 continued Depreciation Property, plant and equipment are stated at cost. Depreciation is calculated on a straight-line basis over the expected useful economic lives of the assets concerned as follows : Years Power plant 15 and 20 Buildings and structures 20 Transmission system 20 Operating and maintenance equipment 5 and 10 Office equipment, furniture and computers 5 Vehicles 5 Deferred expenses Pre-operating expenses, organisation expenses and other deferred charges are amortised, based on a straight-line method, over a period of 5 - 10 years. Foreign currencies Trading transactions denominated in foreign currencies are translated into Thai Baht at the exchange rates ruling when the transactions were entered into. Monetary assets and liabilities denominated in foreign currencies are translated into Thai Baht at the exchange rates ruling at the balance sheet date. Exchange gains or losses are included in the statements of income (loss) and the consolidated statements of income (loss). Earnings (loss) per share Earnings (loss) per share is calculated, based on the weighted average number of shares issued during the period. Unaudited Reviewed Electricity Generating Public Company Limited Page 10 Notes to the interim company financial statements and consolidated financial statements - June 30, 1999 continued Change in accounting policy 3. The company has changed its accounting policy in respect of investment in marketable securities, from the lower of aggregate cost or market value to fair market value commencing from January 1, 1999. This practice complies with the accounting standard No. 40, which is effective from January 1, 1999. According to this standard, the retroactive adjustment is not required. Statement of cash flows 4. Cash and cash equivalents consist of cash in hand and at banks and deposits at banks and financial institutions which maturities are within 3 months. Related party transactions 5. A summary of significant transactions with related companies is as follows : Consolidation 1999 1998 second second quarter six-month quarter six-month (Baht'000)(Baht'000)(Baht'000)(Baht'000) Transactions during the period Sales 2,120 4,273 2,270 4,806 Maintenance service expenses 65 129 207 298 The company only 1999 1998 (Baht'000)(Baht'000) Balance as at June 30, Investment in debentures of a subsidiary 79 112 Unaudited Reviewed Electricity Generating Public Company Limited Page 11 Notes to the interim company financial statements and consolidated financial statements - June 30, 1999 continued Account receivable - trade is due from the Electricity Generating Authority of Thailand (EGAT), one of the major shareholders of the company, being in respect of sales of electricity. The two subsidiaries have entered into the Power Purchase Agreements (PPAs) with EGAT. The agreements are effective for periods of 15 and 20 years. According to the resolutions of the Cabinet's meetings dated February 15, 1994 and January 23, 1996, the electricity revenues from such agreements are calculated based on 'Cost plus basis'. There is a limitation of sales of electricity to third parties as specified in the agreements. These agreements have been pledged as collateral with the lenders under the Master Agreements. Under the PPAs with EGAT, the subsidiaries are eligible to take into consideration the exchange rate effects to adjust the formulae for the calculation of revenues from the portion of capacity payment charged to EGAT each month, pertaining to The First Amendment to Power Purchase Agreements, dated January 30, 1999, over the period of the PPAs. The compensation amounts for the second quarters ended June 30, 1999 and 1998 totalled Baht 159 million and Baht 221 million and for the six-month periods ended on the same date totalled Baht 328 million and Baht 565 million, respectively. Under the PPAs, EGAT has to bear the natural gas cost until the subsidiaries enter into a natural gas purchase agreement with the Petroleum Authority of Thailand. Therefore, the calculation of revenues from the portion of energy payment does not include a calculation of the natural gas cost. On July 20, 1998, EGAT informed the subsidiaries that they should negotiate with the Petroleum Authority of Thailand in order to enter into a natural gas purchase agreement. However, on August 10, 1998, the subsidiaries requested EGAT to continuously bear the natural gas cost and EGAT agreed with these requests on August 25, 1998. Unaudited Reviewed Electricity Generating Public Company Limited Page 12 Notes to the interim company financial statements and consolidated financial statements - June 30, 1999 continued The two subsidiaries have entered into Major Maintenance Agreements with EGAT for the latter to provide major maintenance services, repair services, administrative services and additional services related to the subsidiaries' power plants. The compensation for such services is calculated based on 'Cost plus basis' and is adjusted annually according to the Consumer Price Index. The agreements are effective for a period of six years, commencing on October 3, 1994 and May 14, 1996, and can be extended for an additional period of six years. These agreements have been pledged as collateral with the lenders under the Master Agreements. Deposits at banks and financial institutions used as collateral 6. Deposits at banks and financial institutions used as collateral of the two subsidiaries are mainly cash reserves to be maintained under the loan agreements referred to in notes 8 and 9, for the purpose of repayment of principal and interest due within one year and a reserve to minimise the exchange risk. These cash reserves are provided from the proceeds of sales of electricity. As at June 30, 1999 and 1998, the cash reserves, which are for the purpose of repayment of principal and interest due within one year, amounted to Baht 3,753 million and 3,343 million, respectively. The remaining balances of Baht 1,905 million and Baht 2,346 million as at June 30, 1999 and 1998, mainly represent Holding accounts of both subsidiaries and Borrower's accounts of Khanom Electricity Generating Company Limited, which must be maintained in accordance with the loan agreements. The cash reserve for minimising the exchange risk represents deposits in US Dollar. The two subsidiaries have to provide this reserve until such account equals the lower of 25% of the aggregate outstanding unhedged US Dollar loans or an amount of US Dollars 103 million. As at June 30, 1999, the reserve is fully complied with the above. Unaudited Reviewed Electricity Generating Public Company Limited Page 13 Notes to the interim company financial statements and consolidated financial statements - June 30, 1999 continued Investments in and loans to subsidiaries, associates and other companies 7. 7.1 Investments in and loans to subsidiaries, associates and other companies for the company's financial statements are as follows : Subsidiaries Type of business Rayong Electricity Generating Electricity Generating Company Limited Khanom Electricity Generating Electricity Generating Company Limited EGCO Engineering and Services Provide maintenance Company Limited service to power plants EGCO Joint Venture and Development Make business investment Company Limited in electricity industry EGCO Mining Company Limited Mining industry Associates AMATA EGCO Power Electricity Generating Company Limited Bangchak Power Company Limited Electricity Generating AMATA POWER ESCO Service Providing services to Company Limited power plants (formerly named as CM ESCO) ESCO Wood Company Limited Provide maintenance service to power plants Paid-up share % of Subsidiaries capital Interest Rayong Electricity Generating Company Limited 4,700,000 99.99 Khanom Electricity Generating Company Limited 4,850,000 99.99 EGCO Engineering and Services Company Limited 210,000 99.99 EGCO Joint Venture and Development Company Limited 447,720 99.99 EGCO Mining Company Limited 176,000 69.99 Associates AMATA EGCO Power Company Limited 1,350,000 29.70 Bangchak Power Company Limited 40,000 30.00 AMATA POWER ESCO Service Company Limited (formerly named as CM ESCO) 2,000 50.00 ESCO Wood Company Limited 20,000 45.00 Other companies Thai LNG Power Company Limited - 10.00 PMI International Company Limited - 10.00 The company only 1999 Cost Method Equity method Subsidiaries (Baht'000) (Baht'000) Rayong Electricity Generating Company Limited 4,700,000 6,009,737 Khanom Electricity Generating Company Limited 4,850,000 5,470,405 EGCO Engineering and Services Company Limited 210,000 114,015 EGCO Joint Venture and Development Company Limited 447,720 20,837 EGCO Mining Company Limited 124,800 105,176 (More)