08 May 2007
Change in Accounting Policy for an Investment in JV
No. EGCO 110/255
Date : May 4, 2007
Attn: President of the Stock Exchange of Thailand
Subject: Change in Accounting Policy for an Investment in Joint Venture
The Board of Directors of the Electricity Generating Public Company
Limited or EGCOMP in the meeting no. 4/2007 dated April 23, 2007
approved in principle to change the accounting policy for
reporting interests in jointly controlled entities in the
consolidated financial statements from proportionate consolidation
/line-by-line consolidation to equity method/one-line consolidation.
Such approach conforms to the Thai Accounting Standard no. 46
Financial Reporting of Interests in Joint Ventures.
The objective of changing the accounting policy is because
EGCOMP views that the new accounting policy would better
reflect the business characteristics of the companies
within EGCOMP Group and would result in a better understanding
among the users of the financial statements.
It should be noted that interests in joint ventures are mostly
the investment in power projects which are capital intensive and
usually raise funds secured against their own assets
with no recourse to their shareholders. In this regard, the Audit Committee
was entrusted to consider the details of the implementation
of the new accounting policy.
Viewing that the new accounting policy conforms to the
Thai Accounting Standard, the Audit Committee in the meeting
no. 6/2007 on May 4, 2007 resolved to approve the change
in reporting interests in Joint Venture in the consolidated
financial statements from proportionate consolidation/line-by-line
consolidation to equity method/one-line consolidation
with effect on 1 January 2007.
Yours sincerely,
Visit Akaravinak
President
Corporate Secretary Division
Tel. 0 2998 5020 - 24