COMP FINANCIAL STATEMENTS FOR Q3-1999 (REVISED)

forrepayment of principal and interest due within one year, and other conditions as described in notes 5 and 7 to the financial statements. Also, a reserve for exchange risk shall be provided as described in the same note. In addition, the PPAs, the Asset Purchase Agreements, the Major Maintenance Agreements, insurance policies, and other related agreements with the lenders have been assigned ascollateral in accordance with the conditions under the Master Agreements. Debentures 10. Consolidation 1999 1998 (Baht'000) (Baht'000) Debentures 9,801,021 10,292,813 Less: Current portion due within one year (985,650) (324,011) 8,815,371 9,968,802 The debentures of Rayong Electricity Generating Company Limited are under the Master Agreement and Debenture Holder Representative Appointment Agreement No. 1 and No. 2, each dated November 30, 1994. The debentures of Khanom Electricity Generating Company Limited are under the Master Agreement and the Statements of the Terms and Conditions Regarding the Rights and Obligations of the Issuer and the Debentureholders which were dated September 3, 1996 and September 19, 1996, respectively. The debenture information of the two subsidiaries is summarised as follows : Outstanding balance Term of as at September 30, 1999 repayment Interest rate Due date (Baht million) (years) (% per annum) Rayong Electricity Generating Company Limited Debentures No. 1 2,500.0 5,7,10,12 11.25 December 7, 2006 Debentures No. 2 780.0 1-12 11.25 December 7, 2006 Khanom Electricity Generating Company Limited Debentures 6,816.1 15 11.5625 June 14, 2011 Unaudited Reviewed Electricity Generating Public Company Limited Page 18 Notes to the interim company financial statements and consolidated financial statements - September 30, 1999 continued The No. 1 debentures of Rayong Electricity Generating Company Limited are divided into 4 parts, being repayable in 5 years, 7 years, 10 years, and 12 years in 1999, 2001, 2004 and 2006, respectively. The No. 2 debentures are divided into 12 parts, being repayable in 1 - 12 years, from 1995 - 2006. The interest is payable semi-annually. The debentures of Khanom Electricity Generating Company Limited are secured debentures with the holders' names being registered, totalling 750,000 units of Baht 10,000 face value each, for a total of Baht 7,500 million. The total debentures were offered to the public and are repayable within 15 years from the date of issuance on June 14, 1996, at six monthly intervals to 2011. The interest is payable semi-annually. Both subsidiaries are also required to maintain a reserve for repayment of principal and interest and to pledge the relevant agreements as collateral as mentioned in notes 5 and 7. Cost of sales 11. Cost of sales is comprised of main expenses; repair and maintenance expenses,depreciation expenses, and insurance expenses. Major repair and maintenance expenses are recorded as expenses when 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 major repair and maintenance expenses for the third quarter and the nine-month period of 1999 amounted to Baht 114 million and Baht 342 million and for the third quarter and the nine-month period of 1998 amounted to Baht 423 million and Baht 1,050 million, respectively. Unaudited Reviewed Electricity Generating Public Company Limited Page 19 Notes to the interim company financial statements and consolidated financial statements - September 30, 1999 continued Exchange losses (gains) 12. Exchange losses (gains) in the consolidated financial statements were mainly related to the translation of long-term loans of the two subsidiaries in US dollar to Thai Baht at the exchange rates ruling at the balance sheet date. Shares of profits (losses) from subsidiaries for the third quarter and the nine- month period of 1999 include exchange losses of Baht 969 million and Baht 1,002 million and exchange gains of Baht 893 million and Baht 2,478 million for 1998, respectively. Dividends 13. At the annual shareholders' meeting dated April 29, 1999, it was approved to declare dividends from 522,809,200 shares of Baht 1.27 each, totalling Baht 663 million. The dividends were paid to the shareholders during the second quarter of 1999. Commitment and contingent liabilities 14. (a) As at September 30, 1999, the company had a commitment to pay the remaining cost of 24,150,000 common shares of Egcom Tara Company Limited, which the company acquired during the third quarter of 1999. The total payment of Baht 398,475,000 for such shares was partly made during the quarter after the company received the shares. The remaining payment,totalling Baht 157 million, is subject to the progress of project of Egcom Tara Company Limited according to the conditions of the agreement. Unaudited Reviewed Electricity Generating Public Company Limited Page 20 Notes to the interim company financial statements and consolidated financial statements - September 30, 1999 continued (b) As at September 30, 1999 the company had commitments under the Sponsor Support Agreement, which were made for subsidiary and associated companies in respect of the following on behalf of the company : Currency Baht US Dollar Raw material purchase - 5,292,300 Performance bond 23,844,720 196,938 (c) As at September 30, 1999, the two subsidiaries did not enter into forward exchange contracts to cover the exchange risk relating to long-term loans of US Dollars 377.2 million. However, such exchange risk is partially covered by The First Amendment to Power Purchase Agreements dated January 30, 1998 as described in note 5. (d) The two subsidiaries have entered into insurance agreements with two local insurers. These agreements are for the purpose of insurance on the power plants, a certain number of equipment, consequent loss, and third party liabilities, covering a period of 3 years commencing on December 31, 1998 and January 1, 1999. The premium for such insurance for the first year will be paid at US Dollars 1,167,885 and the premiums for the next two years were already determined on the condition that there will be no claims exceeding to the agreed amounts in such periods. (e) A subsidiary of the company also entered into spare parts repair service agreements with two suppliers one of which is an affiliated company. According to the agreements, the subsidiary has committed to have these suppliers repair a certain number of spare parts specified in the agreements. These agreements, totalling Baht 49 million and GBP 895,438, shall be effective for a period of 2 years commencing in the first quarter of 1999. Unaudited Reviewed Electricity Generating Public Company Limited Page 21 Notes to the interim company financial statements and consolidated financial statements - September 30, 1999 continued Comparative figures 15. As a result of reclassifications of certain items in the 1999 interim financial statements, the comparative figures in the 1998 financial statements have been amended accordingly. Statements of cash flows for the third quarter and the nine-month period of 1999 has been prepared in accordance with the regulation of the Stock Exchange of Thailand. The comparative statements of cash flows for the third quarter and the nine-month period of 1998 have been prepared accordingly. The Year 2000 issue 16. As of September 1999, the implementation phase of all systems have been completed. The contingency plan has been already tested and proved the appropriateness during September 8-9, 1999. Therefore, the company and subsidiaries are confident for the readiness of the approaching critical date; December 31, 1999 to January 1, 2000. The expenditure incurred is approximately 82% of the total budget of Baht 68 million. Although the company and subsidiaries have completed its computer systems to cope with Y2K issues, it faces further uncertainty where other companies with which the company and subsidiaries transact fail to modify their systems to ensure year 2000 compliance. The company and subsidiaries however does not expect the impact of such events to be significant to the operations of the company and subsidiaries. Auditor's report page 1