NANCIAL STATEMENTS SECOND QUARTER 2000

30 June 31 December 30 June 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Debentures 13,716,907 13,860,478 5,000,000 5,000,000 Less: Current portion of debentures (917,281) (390,660) (542,650) - 12,799,626 13,469,818 4,457,350 5,000,000 The Company is required to comply with the conditions set out in the agreement. REGCO and KEGCO 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 8. 10 Share capital and premium on share capital For the six-month period ended Number of Ordinary Share 30 June 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 126,000 1,260 2,520 3,780 Closing balance 524,397,100 5,243,971 8,559,942 13,803,913 The Group's employees exercised the rights to buy 126,000 ordinary shares at the price of Baht 30 per share in April 2000. As at 30 June 2000, all issued shares were fully paid. 11 Acquisition (a) On 20 June 2000, the Company acquired 50% of the share capital of Gulf Electric Public Company Limited, which is an electricity generating company and incorporated in Thailand, according to the Share Sale and Purchase Agreement dated 31 May 2000. The consideration of Baht 1,050 million was settled in cash in June 2000. The net book value, amounting to Baht 796.26 million, of the company as at 30 June 2000 was applied as the fair value of the net identifiable assets at the date of acquisition. The resulting goodwill of Baht 253.74 million will be amortised on a straight line basis over the period of 20 years. The revenues and operating profit contributed to the Group for the period from 20 June 2000 to 30 June 2000 are insignificant. 11 Acquisition (continued) Details of acquisition of net assets in the Company's consolidated financial statements and the resulting goodwill are as follows: Baht' 000 Property, plant and equipment, net (note 6) 1,763,407 Borrowings (note 8) (1,246,360) Other assets less liabilities 350,148 Minority interest (70,939) Book value of net assets 796,256 Goodwill 253,744 Total purchase consideration 1,050,000 (b) In the third quarter of 1999, the Company acquired 24,150,000 common shares of Egcom Tara Company Limited, at par value of Baht 10, totalling Baht 241 million. The acquired commom shares account for 70% of registered common shares of Egcom Tara Company Limited. Such company has not commenced its operation in the normal course of business. The consideration of Baht 398 million was fully settled in this quarter. The resulting goodwill of Baht 157 million will be amortised on a straight line basis over the useful life. (c) On 12 April 2000, EGCO International (B.V.I.) Limited was incorporated in the British Virgin Islands, with a registered share capital of 1,000 shares at US Dollars 1 each. All shares were initially subscribed by the Company. It has not commenced its normal business opeartion. 12 Disposal According to the Share Sale and Purchase Agreement of a subsidiary (ESCO) enterred on 1 June 2000, the investment in ESCO Wood Company Limited (ESCO Wood) was sold at the value of Baht 1. The net book value of the investment in ESCO Wood was zero under the equity method on the date of disposal. In addition, ESCO Wood repaid part of its indebtedness, amounting to Baht 13 million, to ESCO and agreed to enter into the Loan Agreement with ESCO in respect of the payment of the remainder, amounting to Baht 26 million, of such principal indebtedness. The provision for doubtful account, which had been fully provided for these loans totalling Baht 39 million, was reversed and accordingly resulted in a gain from such reversal for the amount of Baht 39 million. However, as a result of such agreement, the Group has also committed to ESCO Wood to extend the period of the service contracts between two subsidiaries of the Company and ESCO Wood. The term of repayment of the loan mentioned above is also subject to the contract revenues, from which ESCO Wood receives under the service contracts, and other conditions as stated in the agreement. 13 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, subsidiaries, joint venture, and affiliates, including the related parties of its subsidiaries, joint venture, and associates. The information of the Company's subsidiaries, joint venture, and associates is stated in note 5. The following material transactions were carried out with related parties: a) Sales of electricity For the three-month and six-month periods Consolidated ended 30 June 2000 30 June 1999 Three- month Six- month Three- month Six- month period period period period Baht'000 Baht'000 Baht'000 Baht'000 Sales of electricity - Electricity Generating Authority of Thailand 2,285,061 4,632,482 2,120,071 4,272,805 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 include the compensation amounts from the exchange rate effects amounting to approximately Baht 215 million and Baht 408 million for the three-month and six-month periods ended 30 June 2000, respectively (for the three-month and six-month periods ended 30 June 1999: Baht 159 million and Baht 328 million). b) Major maintenance expenses Consolidated 30 For the three-month and six-month periods 30 June 1999 ended June 2000 (restated) Three- Six- Three- month month month Six- month period period period period Baht'000 Baht'000 Baht'000 Baht'000 Major maintenance expenses - Electricity Generating Authority of Thailand 67,999 91,965 33,160 134,249 The major maintenance expenses are calculated based on "Cost plus basis". 13 Related party transactions (continued) c) Outstanding balances arising from sales of electricity, interest receivable, interest payable, and services received Consolidated Company 30 June 31 December 30 June 31 December As at 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Trade account receivable - Electricity Generating Authority of Thailand 1,658,103 1,434,571 - - Interest receivable - Khanom Electricity Generating Co., Ltd. - - 561 608 - EGCO Joint Venture and Development - - 1,423 666 Co., Ltd. - EGCO Engineering and Service Co., Ltd. - - 1,249 668 Trade account payable - Electricity Generating Authority of Thailand 8,521 75,255 - - Interest payable - Rayong Electricity Generating Co., Ltd. - - 776 787 - Khanom Electricity Generating Co., Ltd. - - 3,846 3,934 Outstanding trade account receivable as at 30 June 2000 and 31 December 1999 can be analysed as follows: Up to 3 months 1,644,330 1,422,773 - - 3 6 months 7,133 6,516 - - 6 12 months 11,227 96 - - Over 12 months 2,054 5,186 - - 1,664,744 1,434,571 - - Less : Allowance for doubtful accounts (6,641) - - - 1,658,103 1,434,571 - - 13 Related party transactions (continued) d) Loans to subsidiaries and an associate Consolidated Company 30 June 31 Decemb er 30 June 31 December As at 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Subsidiaries EGCO Engineering and Services Co., Ltd. - - - 50,000 EGCO Joint Venture and Development Co., Ltd. - - 25,200 25,200 Associate AMATA EGCO Power Co., Ltd. 32,490 32,490 - - 32,490 32,490 25,200 75,200 These loans were normally given on commercial terms and conditions. The repayment of loan principal and payment of interest of the loan to AMATA EGCO Power Company Limited are restricted until the fulfilment of cash reserves and other conditions required according to the loan agreement with the finance institution. e) Investments in debentures issued by a subsidiary and the company's debentures held by subsidiaries Consolidated Company 30 June 31ecember 30 June 31 December As at 2000 1999 2000 1999 Bath'000 Bath'000 Bath'000 Bath'000 Investments in debentures - Khanom Electricity Generating Co., Ltd. - - 73,815 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 14 Dividend At the annual shareholders' meeting on 28 April 2000, it was approved to declare a dividend for 524,271,100 shares of Baht 2 each, totalling Baht 1,048 million. Dividend was paid to the shareholders during the period. 15 Commitments and contingencies Sponsor Support Agreements and Guarantees (a) As at 30 June 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 (million) Baht US Dollar Raw material purchase - 5 Performance bond 113 - In addition, the Company has provided a joint guarantee 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. The Company also had a contingency from a letter of guarantee, amounting to US Dollars 1.2 million, which was issued by a foreign bank in respect of investment in Conal Holdings Corporation, a newly established company incorporated in Philippines (note 15(b)). As a credible, high-quality company, the Company is committed to administering its obligations in compliance with good corporate governance. It has accordingly set up a reserve fund of 25% of total value of its obligations to its subsidiaries and associates, thus reducing the risk of default and providing extra return in the form of interest income and increased financial stability. As at 30 June 2000 the Company has deposited the reserve fund amounting to Baht 131.50 million (31 December 1999: Baht 141.50 million). Shareholders Agreements (b) On 24 April 2000, the Company also entered into the Share Purchase Agreement with Alsons Consolidated Resources Inc., a company incorporated in Philippines. According to the agreement, the Company intends to purchase 3,200,000 ordinary shares (par value 100 Philippines Peso per share), accounting for 40% of total registered shares in Conal Holdings Corporation, a newly established company in Philippines. The purchase price of US Dollars 24 million will be paid upon the completion of such purchase. (c) The Company had entered into Head of Agreement to join the Nam Theun Electricity Consortium to develop Nam Theun 2 Hydro Power Project. According to the agreement, the Company had a commitment to pay the development costs, totalling US Dollars 13.5 million. In May 2000, the Company had paid for such costs totalling US Dollars 6.75 million which were recorded as other long-term investments in the consolidated and company interim financial statements. (d) A subsidiary of the Company, Egcom Tara Company Limited, had entered into a long-term loan agreement with The Industrial Finance Corporation of Thailand for the amount of Baht 300 million. The loan bears the interest rate at fixed rate. As at 30 June 2000, Egcom Tara had drawn dawn an amount of Baht 73 million. (e) On 7 April 2000, the Company entered into the Shareholders Agreement with Electricity Power Development Company Limited, which is incorporated in Japan. According to the agreement, the Company committed to subscribe 74% shares, totalling Baht 407 million, of a newly established company subsequently registered as EGCO Green Energy Company Limited. The payment of this subscription is subject to the incorporation and satisfaction of all conditions precedent in the agreement. EGCO Green Energy Company Limited was incorporated on 28 April 2000 with a registered share capital of Baht 74,000. 15 Commitments and contingencies (continued) Forward Exchange Contracts (f) As at 30 June 2000, the two subsidiaries of the Company and a subsidiary of the joint venture had not entered into forward exchange contracts to cover the exchange risk relating to long-term loans of US Dollars 417.5 million. However, such exchange risk of the two subsidiaries of the Company is substantially covered by "The First Amendment to Power Purchase Agreements" dated 30 January 1998. Therefore, the remaining foreign currency long-term loans amouting to US Dollar 63.5 million of the subsidiary of the joint venture had not been unhedged by any instruments or agreement of the same purpose. Service and Purchase Agreements (g) The two subsidiaries of the Company 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 from1 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. (h) A subsidiary of the Company entered into spare parts repair service agreements with two suppliers. According to the agreements, this 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 from January 1999. Moreover, the two subsidiaries of the Company also entered into gas turbine major parts repair service contracts with a supplier, previously an associate. According to the contracts, these two subsidiaries have committed to have this supplier repair a certain number of spare parts specified in the contracts. These contracts, totalling Baht 14 million and Baht 36 million were effective for a period of 2 years commencing from May 2000 and January 2001, respectively. (i) The two subsidiaries of the Company entered into Long-term Part Agreement of capital spare parts with a supplier. According to the agreement, the subsidiaries have committed to purchase a number of gas turbines specified in the agreements. The agreements, totalling US Dollars 42 million and US Dollars 16.12 million, was effective for a period of 6 years commencing from the agreement date. Significant Agreements by the Joint Venture The subsidiaries of the joint venture have the following significant agreements: (j) The Power Purchase Agreement with the Electricity Generating Authority of Thailand (EGAT). According to the agreement, the subsidiary must start to sell the electricity to EGAT within May 1998, which sales quantity and electricity rate must be complied with the agreement. The agreement was effective for a period of 21 years, and this subsidiary had to pledged bank guarantee as collateral for the cancellation in amounted to Baht 163.1 million. Such guarantee has been received when maturity. (k) A subsidiary of the joint venture also entered into Gas Purchase Agreement with the Petroleum Authority of Thailand. The agreement was effective for a period of 16 years commencing from 20 March 1998 which was the trading date. The sales quantity and its price must be complied with the agreement which can be extended for a period of 5 years commencing from the maturity date upon the conditions specified in the agreement. 15 Commitments and contingencies (continued) Significant Agreements by the Joint Venture (continued) (l) During the year 1997, a subsidiary of the joint venture had entered into sales/purchase agreement for electricity supply with the Electricity Generating Authority of Thailand. Under the related purchase agreement, the subsidiary had to provide collateral of Baht 367 million in the form of bank guarantee as security against the early cancellation of the agreement. The collateral is to be returned to the subsidiary upon termination of the agreement. However, as at 30 June 2000, such subsidiary has not commenced its normal business opeartion and is waiting for approval to proceed the project after the public hearing with regard to its environmental impact. The management believe that constuction will be able to continue. In addition, if the project is to be cancelled, the said subsidiary is able to claim compensation for losses arising from the cancellation through no fault of that subsidiary from the Electricity Generating Authority of Thailand. As at 30 June 2000, the two subsidiaries of the joint venture have bank guarantee pledged as collateral under items (j) and (l) totalling Baht 554.2 million. (m) As at 30 June 2000, a joint venture has commitments relating to building and equipment rental agreements which payments in 2000 to 2002 amounting to Baht 17.77 million. 16 Post Balance Sheet Events (a) Pursuant to the resoluation of the Company Board of Directors' meeting on 31 July 2000, it was approved in principle to sell 70% stakes in two subsidiaries, EGCO Mining Company Limited and Egcom Tara Company Limited, which are not engaged in the Company's core business, on the condition that Company will gain a good return. Since the Company would like to focus on investing in core business and withdraw non-core business from its investment. As at 30 June 2000, the net assets of EGCO Mining Company Limited and Egcom Tara Company Limited were Baht 22.21 million and Baht 274.39 million, respectively and the operating loss for the six-month period ended 30 June 2000 were Baht 6.68 million and Baht 2.23 million, respectively. (b) At the Board of Directors' meeting on 27 April 2000, it was approved to increase in share capital of EGCO International B.V.I. for an amount of US Dollars 24 million and payment was subsequently made in July 2000