NANCIAL STATEMENTS QUARTER ENDED 31 MARCH 2000

ended 31 December 1999. The Group has implemented the following new Thai Accounting Standards, effective 1 January 2000, in these interim financial statements: TAS 41-Interim Financial Reporting TAS 44-Consolidated Financial Statements and Accounting for Investment in Subsidiaries TAS 45-Accounting for Investment in Associates TAS 47-Related Party Disclosures The comparatives have been adjusted or extended to take into account the requirements of those newly effective standards. Costs that incur unevenly during the financial year are recognised as expenses or deferred in the interim report only if it would be also appropriate to recognise or defer such costs at the end of the financial year. These interim financial statements should be read in conjunction with the 1999 annual financial statements. 2 Changes in accounting policy (a) In the fourth quarter of 1999, in accordance with the Interpretation number 4 of the Institute of the Certified Accountants and Auditors of Thailand, dated 20 January 2000, the Group reviewed its accounting policy in respect of capitalisation of deferred pre-operating expenses and other deferred expenses. As a result of this review, the Group has changed its accounting policy to expense such cost as incurred. (b) Commencing 1 January 2000, in accordance with the Thai Accounting Standard No. 41, "Interim Financial Reporting", the Group reviewed its accounting policy in respect of major repair and maintenance expenses in the interim financial statements. As a result of this review, major repair and maintenance expenses are recorded as and when incurred in the interim financial statements. Prior to this major repair and maintenance expenses were included in the interim financial statements based on the annual budget of major repair and maintenance, and this was in accordance with the regulation dated 3 February 1998 issued by the Stock Exchange of Thailand. 2 Changes in accounting policy (continued) The Group, therefore, accounted for the change in accounting policy retrospectively by adjusting to the opening retained earnings as at 1 January 1999 and the comparative statement of income for the three- month period ended 31 March 1999 has been restated accordingly for the above changes. The effect of these changes to the net profit and earnings per share included in the consolidated and company financial statements for the three-month period ended 31 March 1999 are as follows : Consolidated Company 31 March 31 March 1999 1999 Baht'000 Baht'000 (a) write-offs of deferred pre-operating expenses 27,551 27,551 and other deferred expenes (b) major repair and maintenance expenses (23,071) (23,071) Net profit increase 4,480 4,480 Earnings per share increase (Baht) 0.01 0.01 3 Earnings per share Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the period (2000: 524,271,100 shares; 1999: 522,742,500 shares). For the diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The company has provided share warrants to the employees of the Group under the Employee Stock Ownership Plan (ESOP). 4 Deposits at banks and financial institutions used as collateral As at 31 March 2000 and 31 December 1999, the cash reserves of the two subsidiaries, which are for the purposes of repayment of principal and interest due within one year, amounted to Baht 4,516 million and Baht 3,327 million, respectively. The remaining balances mainly represent Holding accounts of both subsidiaries and Borrower's accounts of Khanom Electricity Generating Company Limited, totalling Baht 2,739 million and Baht 2,571 million as at 31 March 2000 and 31 December 1999, respectively, which must be maintained in accordance with the loan agreements of the same subsidiaries. 5 Investments in subsidiaries, associates, and other long-term investments The principal subsidiary undertakings, which are all incorporated in Thailand, are as follows; Company 31 March 2000 31 December 1999 Business Ownership Cost Equity Cost Equity interest method method method method (%) Baht'000 Baht'000 Baht'000 Baht'000 Rayong Electricity Generating Electricity Co., Ltd. generating 99.99 4,700,000 7,111,014 4,700,000 6,518,272 Khanom Electricity Generating Electricity Co., Ltd. generating 99.99 4,850,000 6,060,305 4,850,000 5,547,372 EGCO Engineering and Power plant Services Co., Ltd. maintenance services 99.99 210,000 80,718 210,000 80,692 EGCO Joint Venture and Investing in power Development Co., Ltd. energy business 99.99 447,720 517,099 447,720 510,444 EGCO Mining Co., Ltd. Mining and other energy 70.00 124,800 13,295 124,800 15,976 Egcom Tara Co., Ltd. Tap water business 70.00 289,800 163,472 241,500 116,102 10,622,320 13,945,903 10,574,020 12,788,857 The principal associate undertakings, which are all incorporated in Thailand, are as follows: Consolidated as at 31 March 2000 Business Paid-up Portion of Cost method Equity method Dividend share capital Investment Baht'000 Baht'000 Baht'000 Baht'000 (%) AMATA EGCO Power Electricity generating 1,350,000 29.70 400,950 484,712 - Co., Ltd. Amata Power-Esco Service Co., Ltd. Power plant operation 2,000 50.00 1,000 2,879 - ESCO Wood Co., Ltd. Power plants equipment 20,000 45.00 9,000 - - maintenance AGRO Energy Co., Ltd. Trading / delivery 500 99.99 500 500 - services of natural scrap 411,450 488,091 5 Investments in subsidiaries, associates, and other long-term investments (continued) The principal associate undertakings, which are all incorporated in Thailand, are as follows: Consolidated as at 31 December 1999 Business Paid-up Portion of Cost method Equity method Dividend share capital Investment Baht'000 Baht'000 Baht'000 Baht'000 (%) AMATA EGCO Power Electricity generating 1,350,000 29.70 400,950 477,804 - Co., Ltd. Amata Power-Esco Service Co., Ltd. Power plant operation 2,000 50.00 1,000 2,546 - ESCO Wood Co., Ltd. Power plant equipment 20,000 45.00 9,000 - - Co., Ltd. maintenance AGRO Energy Co., Ltd. Trading / delivery 500 99.99 500 500 - services of natural scrap 411,450 480,850 The investment in AGRO Energy Company Limited is accounted for under the equity method but not consolidated in the consolidated interim financial statements because this subsidiary has not commenced its trading operation and its financial statements are immaterial. The financial statements for the three-month period ended 31 March 2000 include shares of net profit totalling Baht 7.2 million from the four associates (The three-month period ended 31 March 1999 : net loss of Baht 22.2 million). The financial statements for such period of these associates have not been reviewed by these companies' auditors. Other long-term investments comprise: as at 31 March 2000 Consolidated Company Available for sale Other investments Available for sale Other investments Baht'000 Baht'000 Baht'000 Baht'000 Debt securities - - - - Equity securities 189,189 37,800 189,189 37,800 Add: Adjustment for changes in fair value 3,514 - 3,514 - 192,703 37,800 192,703 37,800 Total other long-term investments 230,503 230,503 as at 31 December 1999 Consolidated Company Available for sale Other investments Available for sale Other investments Baht'000 Baht'000 Baht'000 Baht'000 Debt securities - - - - Equity securities 189,189 37,800 189,189 37,800 Add: Adjustment for changes in fair value 992 - 992 - 190,181 37,800 190,181 37,800 Total other long-term investments 227,981 227,981 6 Capital expenditures and commitments Consolidated Company For the three-month period ended 31 March 31 March 2000 2000 Baht'000 Baht'000 Property, plants, and equipment, net Opening net book amount 27,271,455 998,016 Additions 145,909 1,164 Disposals (9,661) (9,480) Depreciation (422,236) (14,876) Closing net book amount 26,985,467 974,824 As at 31 March 2000, land, buildings and equipment of power plants of the two subsidiaries, which are specified in the Master Agreements, are mortgaged and pledged as collateral for long-term loans and debentures. Capital commitments of the Group as at 31 March 2000 amounted to Baht 285 million (31 December 1999: Baht 355 million). 7 Long-term loans The long-term loans are loans in US Dollar and Thai Baht of the subsidiaries as follows; Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Long-term loans in US Dollar 16,067,581 15,974,961 - - Long-term loans in Thai Baht 2,495,000 2,491,750 - - 18,562,581 18,466,711 - - Less: Current portion of long-term loans (1,454,701) (1,447,976) - - Long-term loans, net 17,107,880 17,018,735 - - Long-term loans mainly comprise loans of Rayong Electricity Generating Company Limited and Khanom Electricity Generating Company Limited. The Master Agreements of both subsidiaries have certain clauses which state that cash reserves are to be provided from the proceeds of sales of electricity for repayments of principal and interest due within one year, and other conditions as described in the agreements. Also, a reserve for minimising the exchange risk shall be provided. In addition, the Power Purchase Agreements, the Asset Purchase Agreements, the Major Maintenance Agreements, insurance policies and other related agreements with the lenders have been assigned as collateral in accordance with the conditions under the Master Agreements. 8 Debentures The debentures are debentures in Thai Baht of the company and two subsidiaries as follows : Consolidated Company 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Debentures 13,860,478 13,860,478 5,000,000 5,000,000 Less: Current portion of debentures (390,660) (390,660) - - 13,469,818 13,469,818 5,000,000 5,000,000 The company is required to comply with the conditions set out in the agreement. The two subsidiaries are also required to maintain a reserve for repayment of principal and interest due within one year and to pledge the relevant agreements as collateral as mentioned in note 4 and 7. 9 Share capital and premium on share capital For the three-month period Number of Ordinary Share ended 31 March 2000 shares Shares Premium Total Baht'000 Baht'000 Baht'000 Opening balance 524,271,100 5,242,711 8,557,422 13,800,133 Issue of shares - - - - Closing balance 524,271,100 5,242,711 8,557,422 13,800,133 The total authorised number of ordinary shares as at 31 March 2000 is 530,000,000 shares (31 December 1999: 530,000,000 shares) with a par value of Baht 10 per share (31 December 1999: Baht 10 per share). As at 31 March 2000, all issued shares were fully paid. 10 Related party transactions The Company is significantly influenced by the Electricity Generating Authority of Thailand and CLP Power Projects (Thailand) Limited who are the major shareholders of the company. The remaining company's shares are widely held. Related party means the company's shareholders and all subsidiaries and affiliates, including the related parties of its subsidiaries and associates. The information of the company's subsidiaries and associates is stated in note 5. 10 Related party transactions (continued) The following material transactions were carried out with related parties: a) Sales of electricity Consolidated Company For the three-month periods ended 31 March 31 March 31 March 31 March 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Sales of electricity - Electricity Generating Authority of Thailand 2,347,420 2,152,734 - - The sales of electricity are calculated based on "Cost plus basis" which complies with the resolutions of the Cabinet's meetings dated 15 February 1994 and 23 January 1996. The sales of electricity for the three-month periods ended 31 March 2000 and 1999 include the compensation amounts from the exchange rate effects approximately Baht 194 million and Baht 167 million, respectively. b) Major maintenance expenses Consolidated Company For the three-month periods ended 31 March 31 March 31 March 31 March 2000 1999 2000 1999 (Restated) Baht'000 Baht'000 Baht'000 Baht'000 Major maintenance expenses - Electricity Generating Authority of Thailand 23,966 101,090 - - The major maintenance expenses are calculated based on "Cost plus basis". 10 Related party transactions (continued) c) Outstanding balances arising from sales of electricity, interest receivable, interest payable, and services received Consolidated Company As at 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Trade accounts receivable - Electricity Generating Authority of Thailand 867,491 1,434,571 - - Interest receivable - Khanom Electricity Generating Co., Ltd. - - 3,679 608 - EGCO Joint Venture and Development Co., Ltd. - - 1,046 666 - EGCO Engineering and Service Co., Ltd. - - 657 668 Trade accounts payable - Electricity Generating Authority of Thailand 3,601 75,255 - - Interest payable - Rayong Electricity Generating Co., Ltd. - - 1,781 787 - Khanom Electricity Generating Co., Ltd. 8,907 3,934 Outstanding trade account receivable as at 31 March 2000 and 31 December 1999 can be analysed as follows: Up to 3 months 860,828 1,422,773 - - 3-6 months 9,809 6,516 - - 6-12 months 1,440 96 - - Over 12 months 2,055 5,186 - - 874,132 1,434,571 - - Less : Allowance for doubtful accounts (6,641) - - - 867,491 1,434,571 - - d) Loans to subsidiaries and associates Consolidated Company As at 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Beginning balance 32,490 32,490 75,200 75,200 Loans advanced during the period - - - - Loan repayments received during the period - - - - Ending balance 32,490 32,490 75,200 75,200 10 Related party transactions (continued) The loans to subsidiaries were advanced to EGCO Engineering and Services Company Limited (Baht 50 million; repayable within 2003; interest rate of 8% per annum) and EGCO Joint Venture and Development Company Limited (Baht 25.20 million; repayable within 2009; interest rate of average MLR minus 2% but not over 15% per annum). The loans to associates were advanced to AMATA EGCO Power Company Limited (Baht 32.49 million; repayable within 2008; interest rate of average MLR minus 2%). These loans were normally given on commercial terms and conditions. The related interest income from subsidiaries and associates were Baht 1.85 million (the first quarter ended 31 March 1999: nil). No provision has been required in the interim period and 1999 for the loans made to the subsidiaries and associates. e) Investments in debentures issued by a subsidiary and the company's debentures held by subsidiaries Consolidated Company As at 31 March 31 December 31 March 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Investments in debentures - Khanom Electricity Generating Co., Ltd. - - 76,153 76,153 The company's debentures held by - Rayong Electricity Generating Co., Ltd. - - 50,000 50,000 - Khanom Electricity Generating Co., Ltd. - - 250,000 250,000 11 Commitments and contingencies (a) As at 31 March 2000 the company had commitments under the Sponsor Support Agreements, which were made for subsidiaries and associates in respect of the following on behalf of the company: Currency Baht US Dollar Raw material purchase - 5,292,300 Performance bond 110,806,753 65,646 In addition, the company has provided guarantees on behalf of an associate in respect of its operating performance and loan condition compliance. The guarantee under this arrangement will not exceed US Dollar 5,061,000. (b) As at 31 March 2000, the company had a commitment to pay the share premium of Baht 157 million of Egcom Tara Company Limited, which was acquired in 1999. Partial payment amounting to Baht 48 million was made in the first quarter of 2000 and the payment of remainder of Baht 109 million was pending, subject to the conditions stated in the Share Purchase Agreement dated 22 July 1999. Such company has not commenced its operation in the normal course of business. 11 Commitments and contingencies (continued) (c) As at 31 March 2000, the two subsidiaries had not entered into forward exchange contracts to cover the exchange risk relating to long-term loans of US Dollars 366 million. However, such exchange risk is substantially covered by "The First Amendment to Power Purchase Agreements" dated 30 January 1998. (d) The two subsidiaries had 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 1 January 1999. The premium for such insurance for the first year was paid at US Dollars 1,167,885 and for the next two years at the agreed amounts on the condition that there will be no claims occurred 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 affiliate. According to the agreements, the subsidiary has committed to have (more)