anagement Discussion and Analysis for Q1/2005

2) Short-term and long-term investments used as collateral were Baht 7,684 million or 13% of the total assets, up Baht 265 million or 4% after REGCO obtained lenders' approval in this quarter to reduce the Foreign Exchange Reserve Account (FEXRA) to USD 1.5 million and to release Debt Service Reserve Account (DSRA) amounting to USD 13.2 million by pledging a Bank Guarantee. 3) Investment in subsidiaries and associates and interests in joint ventures amounted to Baht 414 million or 1% of the total assets, up by Baht 16 million or 4%. This increase is mainly a result of the recognition of the share of profit of AEP. 4) Property, plant and equipment (net) totaled Baht 31,035 million or 54% of the total assets. They were down Baht 248 million or 1% due to the depreciation of EGCO and subsidiaries' assets totaling Baht 614 million, the reclassification of unutilised capital spare parts from property, plant and equipment to inventories of TLP Cogen and KEGCO amounting to Baht 23 million and Baht 7 million, respectively. However, an increase in property, plant and equipment was substantially from GEC's construction of Baht 208 million and the recording of capital spare parts as property, plant and equipment according to the major maintenance of REGCO and TLP Cogen in the amount of Baht 106 million and Baht 28 million, respectively. The translation adjustment increased by Baht 31 million as well. 5) Other assets were Baht 8,557 million or 15% of the total assets, down Baht 69 million or 1% mainly from accounts receivable and accounts receivable from related companies that were down Baht 605 million while the increased shareholder loans to NTPC amounted to Baht 236 million. Remaining other assets were up by Baht 300 million. 4.2 Liability Analysis As at March 31, 2005, the company's total liabilities were Baht 26,268 million, up Baht 304 million or 1% as a result of the increase in interest payable and loan drawdown. The total liabilities consist of the following: 1) Long-term loans and debentures totaled Baht 24,068 million, or 92% of total liabilities, up Baht 135 million or 1%. The details are as follows: - USD loans in the amount of USD 321 million - Yen loans in the amount of Yen 1,115 million - Philippines Peso loans in the amount of Peso 87 million - Baht loans in the amount of Baht 5,657 million - Baht debentures in the amount of Baht 5,558 million In the first three-months of 2005, the amount of loans denominated in Baht increased by Baht 267 million due to the loan drawdown for the construction of GEC whereas the amount of loans denominated in USD and Yen decreased by Baht 138 million, mostly from principal repayment by TLP Cogen, GEC, Roi-Et green and APBP. For the Baht debentures, there is no change. 2) Other liabilities amounted to Baht 2,200 million or 8% of total liabilities, mostly resulted from bank overdrafts and short-term loans of Baht 115 million, trade accounts payable of Baht 467 million,related companies' trade accounts payable of Baht 62 million, interest payable of Baht 479 million, value added tax payable and income tax payable of Baht 514 million, dividend payable of Baht 13 million and others Baht 550 million. 4.3 Shareholders' Equity Analysis As at March 31, 2005, Shareholders' Equity (excluding treasury stock) amounted to Baht 30,720 million, which was Baht 1,617 million higher than the amount as at December 31, 2004. This was due mainly to the profits from operation of the first quarter of 2005. The analysis of the company's capital structure as at March 31, 2005 is summarized as follows: Shareholders' equity was Baht 30,720 million or 53.91%. Liabilities were Baht 26,268 million or 46.09%. Important financial ratios were as follows: - Debt to equity ratio was 0.86 times, lower than 0.89 times at the end of last year. - Book value per share was Baht 56.46, higher than Baht 53.55 at the end of last year. 5. Report and Analysis of Cash Flow Position Cash Flow Statement shows the change in cash flows from operating activities, investing activities, and financing activities at the end of the accounting period, and indicates the ending balance of the cash and the cash equivalents. As at March 31, 2005, the ending balance of the cash and the cash equivalent was Baht 3,544 million, up by Baht 1,693 million from the end of 2004. The details of the sources and uses of funds are as follows: -Net cash received from operating activities totaled Baht 2,034 million. Most of this was cash from operating activities that amounted to Baht 2,043 million whereas cash paid for working capital decreased by Baht 9 million. -Net cash payment for investing activities was Baht 504 million. Cash payment for deposits at financial institutions increased by Baht 304 million. In addition, the investment in GEC's construction of Power Plant amounted to Baht 181 million and shareholder loans to NTPC amounted to Baht 232 million. Whereas the cash inflow was Baht 69 million from the net disposals of short-term investments, and dividends from EASTW, KTSF and the other open-ended funds amounted to Baht 61 million, Baht 91 million and Baht 14 million, respectively. - Net cash received from financing activities was Baht 165 million, mainly owing to loan drawdown of GEC in the amount of Baht 372 million while the loan repayment from TLP Cogen, Roi-Et Green, APBP and GEC amounted to Baht 193 million.