listed companyptt.listedcompany.com/misc/financials/q107_en.pdf · ( translation) auditor’s...

( TRANSLATION)

AUDITOR’S REVIEW REPORT

TO : THE SHAREHOLDERS OF PTT PUBLIC COMPANY LIMITED

The Office of the Auditor General of Thailand has reviewed the accompanying

consolidated and the Company balance sheets as at March 31, 2007, the consolidated and the

Company statements of income, statements of changes in shareholders’ equity and statements of

cash flows for the periods of three months ended March 31, 2007 and 2006 of PTT Public Company

Limited and its subsidiaries and of PTT Public Company Limited, respectively. The Company’s

management is responsible for the correctness and completeness of information presented in these

financial statements. The responsibility of the Office of the Auditor General of Thailand is to report

on these financial statements based on our reviews.

The Office of the Auditor General of Thailand conducted the reviews in accordance

with the auditing standards applicable to review engagements. Those standards require the Office of

the Auditor General of Thailand plan and perform the review to obtain moderate assurance as to

whether the financial statements are free of material misstatement. A review is limited primarily to

inquiries of the Company’s personnel and analytical procedures applied to financial data and thus

provides less assurance than an audit in accordance with generally accepted auditing standards.

Accordingly, the Office of the Auditor General of Thailand does not express an audit opinion.

Based on our review above, nothing has come to attention that causes the Office of the

Auditor General of Thailand to believe that the consolidated and the Company’s financial statements are

not presented fairly, in all material respects, in accordance with generally accepted accounting principles.

- 2 -

The Office of the Auditor General of Thailand previously audited the consolidated

and the Company’s financial statements for the year ended December 31, 2006, of PTT Public

Company Limited and its subsidiaries in accordance with generally accepted auditing standards and

expressed an unqualified opinion on those statements in the report dated February 23, 2007. The

consolidated and the Company’s balance sheets as at December 31, 2006, as presented herewith for

comparative purposes, formed a part of the financial statements which the Office of the Auditor

General of Thailand audited and issued a report thereon. The Office of the Auditor General of

Thailand has not performed any other audit procedures subsequent to the date of that report except

for items as stated in the fifth paragraph.

As stated in Note 2.1 in the quarter ended March 31, 2007, the Company has changed

the accounting policy for investments in subsidiaries, associates and jointly controlled entities

presented in the Company’s financial statements from the equity method to the cost method in order

to comply with the notification of the Federation of Accounting Professions, and the Company’s

statement of income for the quarter ended March 31, 2006 and the Company’s balance sheet as at

December 31, 2006, were restated. The Office of the Auditor General of Thailand audited the

adjustments for the change in accounting policy that were used in preparation of the restated

Company’s financial statements for the year ended December 31, 2006, which those adjustments are

suitable and fairly adjusted in the Company’s financial statement.

The Office of the Auditor General of Thailand draws attention to Note 2.2 with regard

to changes in accounting estimations of useful lives of assets that used a propective method.

(Signed) Khunying Jaruvan Maintaka

(Khunying Jaruvan Maintaka)

Auditor General

(Signed) Jintana Vanichkajorn

(Jintana Vanichkajorn) Director of Audit Office

May 9, 2007

Unit : Baht

Notes March 31, 2007 December 31, 2006 March 31, 2007 December 31, 2006

(Unaudited (Audited) (Unaudited (Audited)

Reviewed) Reviewed) (Restated)

Current AssetsCash and cash equivalents 3 104,063,671,316 86,806,254,165 37,080,465,150 26,509,729,979

Current investments 1,471,145,123 1,412,953,182 975,282,231 971,412,527

Trade accounts and notes receivable - others, net 4 83,649,002,246 83,651,051,094 71,942,482,387 70,714,206,129

Trade accounts receivable - related parties, net 5.1 38,890,501,342 32,233,254,372 45,245,239,768 41,076,883,986

Other accounts receivable, advances and short-term loans - related parties, net 5.2 381,016,821 1,485,781,424 5,771,590,856 2,595,264,377

Inventories 13,015,771,623 15,117,531,539 5,789,314,908 7,957,413,082

Materials and supplies - net 7,823,430,618 7,552,469,189 1,818,809,995 1,683,222,426

Other current assets 21,586,746,477 25,170,367,460 14,748,207,108 16,855,527,953

Total Current Assets 270,881,285,566 253,429,662,425 183,371,392,403 168,363,660,459

Non-current AssetsInvestments in subsidiaries, associates and joint ventures 6.2, 6.3 107,551,052,161 100,232,967,812 135,868,997,110 134,160,018,527

Other long-term investments 7 2,991,993,985 3,129,323,736 1,957,120,000 1,894,120,000

Other accounts receivable, advances and long-term

loans - related parties, net 5.3 6,783,661,549 5,807,690,627 7,334,631,161 6,048,767,974

Property, plant and equipment, net 8 358,676,368,114 337,131,879,529 144,773,799,465 140,582,771,063

Intangible assets 9 24,741,157,933 22,596,923,648 4,464,454,439 3,665,779,723

Deferred tax assets 1,731,432,421 1,251,768,536 1,593,768,442 1,219,733,054

Advance payment for gas purchased 10 15,997,658,691 16,598,177,518 19,870,130,131 20,629,669,029

Other non-current assets 10,505,389,425 11,275,075,385 8,614,138,386 9,253,938,789

Total Non-current Assets 528,978,714,279 498,023,806,791 324,477,039,134 317,454,798,159Total Assets 799,859,999,845 751,453,469,216 507,848,431,537 485,818,458,618

Notes to financial statements form an integral part of these financial statements.

Assets

PTT PUBLIC COMPANY LIMITED AND SUBSIDIARIES

BALANCE SHEETS

AS AT MARCH 31, 2007 AND DECEMBER 31, 2006

Consolidated The Company

Unit : Baht




Current Liabilities

Bank overdrafts and short-term loans from

financial institutions 2,243,873,352 1,734,797,602 - -

Trade accounts payable - others 66,287,337,798 55,620,487,671 60,959,575,995 52,855,101,757

Trade accounts payable - related parties 5.4 28,743,865,755 29,168,043,894 36,398,533,714 37,504,382,815

Other accounts payable - related parties 5.5 391,052,047 513,089,157 228,805,733 372,626,899

Current portion of long-term loans 11 14,020,429,638 21,612,145,139 4,490,657,884 11,493,033,200

Income tax payable 29,223,386,706 21,161,422,580 6,293,687,080 3,868,862,856

Accrued expenses 28,382,055,589 25,251,959,602 9,909,219,822 10,055,120,041

Other current liabilities 11,307,491,255 12,513,974,983 5,600,116,904 6,357,907,951

Total Current Liabilities 180,599,492,140 167,575,920,628 123,880,597,132 122,507,035,519

Non-current Liabilities

Other long-term accounts payable - related parties 5.6 - - 207,769,956 248,950,289

Long-term loans 11 209,626,535,907 198,339,307,089 173,153,254,160 165,066,437,701

Deferred tax liabilities 14,377,837,900 13,839,224,531 197,700,000 158,750,000

Provision for decommissioning costs 12 10,415,436,482 10,712,387,696 - -

Deposits on LPG cylinders 4,410,492,893 4,347,905,533 4,410,492,893 4,347,905,533

Other non-current liabilities 2,362,337,074 2,316,360,846 1,344,332,071 1,403,432,022

Total Non-current Liabilities 241,192,640,256 229,555,185,695 179,313,549,080 171,225,475,545

Total Liabilities 421,792,132,396 397,131,106,323 303,194,146,212 293,732,511,064



Liabilities and Shareholders' Equity



BALANCE SHEETS

2

Unit : Baht




Shareholders' Equity

Share capital 13

Authorized share capital

2,857,245,725 ordinary shares of Baht 10 each 28,572,457,250 28,572,457,250 28,572,457,250 28,572,457,250

Issued and paid-up share capital

2,805,112,825 ordinary shares of Baht 10 each 28,051,128,250 - 28,051,128,250 -

2,804,925,625 ordinary shares of Baht 10 each - 28,049,256,250 - 28,049,256,250

Premium on share capital

Premium on ordinary shares 19,353,838,966 19,321,453,366 19,353,838,966 19,321,453,366

Surplus on dilution of investments in subsidiaries

and associates 3,044,255,402 2,950,404,482 - -

Unrealized gain on available-for-sale securities 444,068,964 463,391,320 461,300,000 476,250,000

Currency translation differences (1,156,586,633) (994,247,170) - -

Retained earnings

Appropriated

Legal reserve 2,857,245,725 2,857,245,725 2,857,245,725 2,857,245,725

Reserve for Self-insurance Fund 888,116,510 888,116,510 888,116,510 888,116,510

Unappropriated 256,877,338,895 234,296,559,472 153,042,655,874 140,493,625,703

Total parent's shareholders' equity 310,359,406,079 287,832,179,955 204,654,285,325 192,085,947,554

Minority interests 67,708,461,370 66,490,182,938 - -

Total Shareholders' Equity 378,067,867,449 354,322,362,893 204,654,285,325 192,085,947,554

Total Liabilities and Shareholders' Equity 799,859,999,845 751,453,469,216 507,848,431,537 485,818,458,618


(Signed) Prasert Bunsumpun

President


BALANCE SHEETS



Corporate Finance & Accounting

Liabilities and Shareholders' Equity (Continued)

(Pichai Chunhavajira)(Signed) Pichai Chunhavajira

Senior Executive Vice President,(Prasert Bunsumpun)

3

Unit : Baht

Notes 2007 2006 2007 2006

(Restated)

Sales and services 298,279,162,006 270,254,123,690 279,905,910,652 278,137,807,801

Cost of sales and services 266,849,533,302 233,848,801,187 265,825,864,975 264,075,940,924

Gross Margin 31,429,628,704 36,405,322,503 14,080,045,677 14,061,866,877

Selling and administrative expenses 5,920,397,050 6,491,912,888 4,188,204,646 4,790,573,612

Exploration expenses 346,617,382 534,700,825 - -

Income from Sales 25,162,614,272 29,378,708,790 9,891,841,031 9,271,293,265

Other income 15 4,801,034,006 7,942,579,894 6,982,535,805 6,532,875,417

Directors' remuneration 5.9 33,580,565 30,020,928 10,439,000 9,801,000

Income from Operations 29,930,067,713 37,291,267,756 16,863,937,836 15,794,367,682

Share of net income from investments

under the equity method 16 7,177,402,797 3,531,788,492 - -

Income before Interests and Taxes 37,107,470,510 40,823,056,248 16,863,937,836 15,794,367,682

Interest expenses 2,572,895,784 2,787,135,034 1,934,582,044 1,699,133,911

Income taxes 8 382 224 184 9 561 635 055 2 380 325 621 2 405 561 406



STATEMENTS OF INCOME

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2007 AND 2006

UnauditedReviewedUnauditedReviewed

4

Income taxes 8,382,224,184 9,561,635,055 2,380,325,621 2,405,561,406

Income after Taxes 26,152,350,542 28,474,286,159 12,549,030,171 11,689,672,365

Income of minority interests 3,571,571,119 4,751,494,342 - -

Net Income 22,580,779,423 23,722,791,817 12,549,030,171 11,689,672,365

Basic earnings per share 14

Net income 8.05 8.48 4.47 4.18

Diluted earnings per share 14

Net income 8.04 8.44 4.47 4.16


4

Unit : Baht

Surplus on Unrealized gain(loss) Currency Reserve for

Issued and paid-up Premium on dilution of on available-for-sale translation Legal Self-insurance Minority

share capital share capital investments securities differences reserve Fund Unappropriated interests Total

Balance as at January 1, 2006 27,972,457,250 17,992,830,666 2,142,400,359 830,990,386 (800,719,785) 2,850,000,000 841,395,380 178,987,448,048 47,616,130,766 278,432,933,070

Currency translation differences - - - - (102,580,282) - - - - (102,580,282)

Unrealized gain on available-for-sale securities - - - 54,246,000 - - - - - 54,246,000

Minority interests - - - - - - - - 4,314,585,656 4,314,585,656


and associates - - 7,319,612 - - - - - - 7,319,612

Net income - - - - - - - 23,722,791,817 - 23,722,791,817Balance as at March 31, 2006 27,972,457,250 17,992,830,666 2,149,719,971 885,236,386 (903,300,067) 2,850,000,000 841,395,380 202,710,239,865 51,930,716,422 306,429,295,873

Balance as at January 1 2007 28 049 256 250 19 321 453 366 2 950 404 482 463 391 320 (994 247 170) 2 857 245 725 888 116 510 234 296 559 472 66 490 182 938 354 322 362 893

Retained earnings

CONSOLIDATED


STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY


UnauditedReviewed

5

Balance as at January 1, 2007 28,049,256,250 19,321,453,366 2,950,404,482 463,391,320 (994,247,170) 2,857,245,725 888,116,510 234,296,559,472 66,490,182,938 354,322,362,893

Issued and paid-up share capital 1,872,000 - - - - - - - - 1,872,000

Premium on share capital - 32,385,600 - - - - - - - 32,385,600

Currency translation differences - - - - (162,339,463) - - - - (162,339,463)

Unrealized loss on available-for-sale securities - - - (19,322,356) - - - - - (19,322,356)

Minority interests - - - - - - - - 1,218,278,432 1,218,278,432


and associates - - 93,850,920 - - - - - - 93,850,920

Net income - - - - - - - 22,580,779,423 - 22,580,779,423Balance as at March 31, 2007 28,051,128,250 19,353,838,966 3,044,255,402 444,068,964 (1,156,586,633) 2,857,245,725 888,116,510 256,877,338,895 67,708,461,370 378,067,867,449


5

Unit : Baht

Surplus on Unrealized gain(loss) Currency Reserve for

Issued and paid-up Premium on dilution of on available-for-sale translation Legal Self-insurance

Notes share capital share capital investments securities differences reserve Fund Unappropriated Total

Balance as at January 1, 2006 27,972,457,250 17,992,830,666 2,142,400,359 830,990,386 (800,719,785) 2,850,000,000 841,395,380 178,987,448,048 230,816,802,304

Cumulative effect of the changes in accounting policy 2.1 - - (2,142,400,359) - 800,719,785 - - (63,095,227,360) (64,436,907,934)

Balance after adjustment 27,972,457,250 17,992,830,666 - 830,990,386 - 2,850,000,000 841,395,380 115,892,220,688 166,379,894,370

Unrealized gain on available-for-sale securities - - - 54,246,000 - - - - 54,246,000

Net income - - - - - - - 11,689,672,365 11,689,672,365Balance as at March 31, 2006 27,972,457,250 17,992,830,666 - 885,236,386 - 2,850,000,000 841,395,380 127,581,893,053 178,123,812,735

Balance as at January 1, 2007 28,049,256,250 19,321,453,366 2,950,404,482 463,391,320 (994,247,170) 2,857,245,725 888,116,510 234,296,559,472 287,832,179,955

Cumulative effect of the changes in accounting policy 2.1 - - (2,950,404,482) 12,858,680 994,247,170 - - (93,802,933,769) (95,746,232,401)

Retained earnings

THE COMPANY


STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY


UnauditedReviewed(Restated)

6

Cumulative effect of the changes in accounting policy 2.1 (2,950,404,482) 12,858,680 994,247,170 (93,802,933,769) (95,746,232,401)

Balance after adjustment 28,049,256,250 19,321,453,366 - 476,250,000 - 2,857,245,725 888,116,510 140,493,625,703 192,085,947,554

Issued and paid-up share capital 1,872,000 - - - - - - - 1,872,000

Premium on share capital - 32,385,600 - - - - - - 32,385,600

Unrealized loss on available-for-sale securities - - - (14,950,000) - - - - (14,950,000)

Net income - - - - - - - 12,549,030,171 12,549,030,171Balance as at March 31, 2007 28,051,128,250 19,353,838,966 - 461,300,000 - 2,857,245,725 888,116,510 153,042,655,874 204,654,285,325


6

Unit : Baht

2007 2006 2007 2006

(Restated)

Cash Flows from Operating Activities

Net income 22,580,779,423 23,722,791,817 12,549,030,171 11,689,672,365

Adjustment of net income to net cash provided by

(used in) operating activities :

Depreciation, depletion and amortization 6,361,122,976 6,064,993,884 1,344,935,159 1,632,019,328

Loss on impairment of assets 1,228,596 603,707 1,228,596 603,707

(Gain) loss on disposal of assets 20,201,794 (4,399,099) (1,725,618) (3,962,924)

Write-off fixed assets adjustment 8,745,083 1,565,083 8,745,083 1,565,083

Share of net income from investments

under equity method (7,177,402,797) (3,531,788,492) - -

Income of minority interests 3,571,571,119 4,751,494,342 - -

Gain on foreign exchange (1,951,404,346) (4,562,391,250) (1,067,704,273) (2,118,007,457)

Unrealized gain on changes in value of investments - (2,468,450) - -

Doubtful accounts 33,095,935 72,788,293 17,924,555 69,510,813

Amortization of exploration costs 111,955,785 (13,387,497) - -

Amortization of bond issue expenses 958 621 2 393 880



STATEMENTS OF CASH FLOWS

The Company Consolidated

UnauditedReviewed

7

Amortization of bond issue expenses 958,621 2,393,880 - -

Amortization of bond discounts 7,194,007 10,394,295 6,886,595 8,476,174Deferred income taxes 65,239,117 1,156,358,926 (374,035,388) (19,829,924)Amortization of deferred interest from finance leases 13,392,939 5,184,599 8,813,858 2,299,064

Provision for adjustment in value of inventories (35,681,543) (33,580,584) (35,681,543) (33,580,584)

Dividends received (191,244,298) - (3,734,762,850) (1,434,374,400)

Allowance for loss on lawsuits - 205,500,000 - 205,500,000

Others (2,729,183) - - -

Net income from operating activities before

changes in operating assets and liabilities 23,417,023,228 27,846,053,454 8,723,654,345 9,999,891,245


UnauditedReviewed

7

Unit : Baht

2007 2006 2007 2006

(Restated)

Changes in operating assets (increase) decrease

Trade accounts and notes receivable - others (1,095,479,736) (6,772,021,766) (1,364,278,797) (5,712,938,888)

Trade accounts receivable - related parties (5,872,154,767) (6,588,075,352) (4,271,078,659) (6,133,666,357)

Other short-term accounts receivable, advances

and loans to related parties 5,950,723,617 1,239,485,984 1,163,781,523 663,255,051

Inventories 2,135,331,042 1,466,264,399 2,201,669,300 (439,954,960)

Materials and supplies (232,459,843) (104,321,481) (68,231,117) (76,187,335)

Other current assets 454,068,958 1,429,658,435 2,059,032,231 948,540,279

Advance payment for gas purchased 600,518,826 244,635,308 759,538,897 327,083,503

Other long-term accounts receivable

and advances to related parties (975,970,922) - (975,863,187) 107,735

Other non-current assets 721,212,210 (708,087,543) 639,681,873 76,621,794

Changes in operating liabilities increase (decrease)

Trade accounts payable - others 10,978,596,135 6,675,945,875 8,284,792,642 8,986,132,894

Trade accounts payable - related parties (400,582,391) 829,285,429 (1,054,240,691) 454,299,149

Other accounts payable - related parties (5 079 276 714) (1 362 124 980) (143 814 500) 71 496 603

Consolidated


The Company



UnauditedReviewed

8

Other accounts payable - related parties (5,079,276,714) (1,362,124,980) (143,814,500) 71,496,603

Income tax payable 7,979,192,237 7,383,472,343 2,424,824,224 2,311,476,435

Accrued expenses (1,579,407,125) 1,273,202,806 (877,795,683) (1,659,177,991)

Other current liabilities 1,430,990,716 (2,731,474,039) (789,349,075) (1,851,849,575)

Deposits on LPG cylinders 62,587,360 83,268,070 62,587,360 83,268,070

Other long-term accounts payable - related parties - - (41,180,333) (38,179,798)

Other non-current liabilities 15,314,349 (70,628,800) (49,442,169) (15,010,581)

15,093,203,952 2,288,484,688 7,960,633,839 (2,004,683,972)

Net cash provided by operating activities 38,510,227,180 30,134,538,142 16,684,288,184 7,995,207,273


UnauditedReviewed

8

Unit : Baht

2007 2006 2007 2006

(Restated)

Cash Flows from Investing Activities

Proceeds from disposal of property, plant and equipment 3,316,634 824,929,316 1,433,051 14,549,702

Payment of property, plant and equipment (24,831,145,909) (21,222,497,353) (5,580,347,476) (8,994,249,379)

Payment of intangible assets (676,254,261) (176,407,820) (39,319,730) (35,676,064)

Long-term loans to related parties - - (310,000,000) -

Short-term loans to others (303,182,250) - - -

Short-term loans to related parties - - (606,364,500) -

Payment of investments in subsidiaries (1,633,978,582) - (1,633,978,582) (766,750,000)

Payment of investments in joint ventures - - (75,000,000) -

Payment of investments in associates - (226,521,865) - -

Payment of general investments (39,000,000) (6,498,600) (39,000,000) (6,498,600)

Cash received from disposal of long-term investments 200,591,562 - - -

Cash received from long-term loans to related parties - 185,177,003 - 185,177,003

Cash received from short-term loans to related parties - 587,265,792 - 12,587,515,792

Cash received from cancellation of leasehold in gas stations 2,662,500 - 2,662,500 -

Increase in current investments (58 191 944) (1 140 132 223) (3 869 704) (1 000 131 904)





UnauditedReviewed

9

Increase in current investments (58,191,944) (1,140,132,223) (3,869,704) (1,000,131,904)

Dividends received 191,244,298 91,325,000 - 91,325,000

Net cash used in investing activities (27,143,937,952) (21,083,360,750) (8,283,784,441) 2,075,261,550


UnauditedReviewed

9

Unit : Baht

Notes 2007 2006 2007 2006

(Restated)

Cash Flows from Financing Activities

Cash received from issuing ordinary shares 14,632,620 248,604,000 1,872,000 -

Cash received from premium on share capital 32,385,600 - 32,385,600 -

Cash received from long-term loans 7,100,000,000 12,880,578,700 6,000,000,000 -

Cash received from issuing bonds 9,500,000,000 - 6,000,000,000 -

Cash received from short-term loans 301,920,000 - - -

Repayment of long-term loans (6,461,488,694) (48,862,912) (6,000,000,000) -

Repayment of notes payable - (1,000,000,000) - (1,000,000,000)

Redemption of debentures (628,571,300) (1,628,571,300) - -

Redemption of government bonds (4,000,000,000) (1,000,000,000) (4,000,000,000) (1,000,000,000)

Repayment of short-term loans - (1,100,000,000) - -

Repayment of liabilities from finance leases (58,805,937) (19,659,803) (32,759,368) (11,880,423)

Increase in bank overdrafts and

short-term loans from financial institutions 214,806,450 715,051,796 - -

Dividends paid (317,424) (180,562) - -

Net cash provided by (used in) financing activities 6,014,561,315 9,046,959,919 2,001,498,232 (2,011,880,423)




PTT PUBLIC COMPANY LIMITED AND SUBSIDIARIES UnauditedReviewed

10

Net cash provided by (used in) financing activities 6,014,561,315 9,046,959,919 2,001,498,232 (2,011,880,423)

Effects of exchange rates on cash and cash equivalents (18,351,348) (618,612,551) 168,733,196 (1,090,819)

Currency translation differences (105,082,044) 30,676,388 - -

Net increase in cash and cash equivalents 17,257,417,151 17,510,201,148 10,570,735,171 8,057,497,581

Cash and cash equivalents at beginning of periods 86,806,254,165 73,440,815,749 26,509,729,979 20,884,465,980

Cash and cash equivalents at end of periods 3 104,063,671,316 90,951,016,897 37,080,465,150 28,941,963,561

Supplemental disclosures of cash flow information

Cash paid during the periods for

Interest expenses 3,248,923,957 4,038,858,493 2,393,813,488 2,115,827,484

Income taxes 668,814,792 540,921,604 - -


10

AUDITOR’S REVIEW REPORT AND INTERIM FINANCIAL STATEMENTS


FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2007

PTT PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2007

NOTES CONTENTS

1 General Information

2 Accounting Changes

3 Cash and Cash Equivalents

4 Trade Accounts and Notes Receivable – Others, Net

5 Related Party Transactions

6 Investments in Subsidiaries, Associates and Joint Ventures

7 Other Long-term Investments

8 Property, Plant and Equipment, Net

9 Intangible Assets

10 Advance Payment for Gas Purchased

11 Long-term Loans

12 Provision for Decommissioning Costs

13 Share Capital

14 Earnings per Share

15 Other Income

16 Share of Net Income from Investments under Equity Method

17 Segment Information

18 Reclassification

19 Promotional Privileges

20 Commitments and Contingent Liabilities

21 Subsequent Events

11

PTT PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2007 (UNAUDITED, REVIEWED) AND FOR THE YEAR ENDED DECEMBER 31, 2006 (AUDITED)

1. General Information

1.1 Purpose of the Interim Financial Statements

These interim financial statements are prepared in order to provide additional information other than that included in the most recent annual financial statements. Accordingly, these interim financial statements focus on the reporting of new activities, events and circumstances so as not to duplicate information previously reported. These interim financial statements should, therefore, be read in conjunction with the most recent annual financial statements.

1.2 Preparation of the Interim Financial Statements These interim financial statements are prepared in accordance with Thai Accounting Standard No. 41 “Interim Financial Reporting”. The content of the interim financial statements comprises the balance sheets, statements of income, changes in shareholders’ equity and cash flows, as presented in the most recent annual financial statements, together with selected significant explanatory notes.

1.3 Basis of Preparation

PTT Public Company Limited (“the Company”) and subsidiaries are collectively “the Group”. These consolidated financial statements have been prepared under the same basis as the consolidated financial statements for the year ended December 31, 2006. There was no change in the structures of subsidiaries, associates and joint ventures during the period.

1.4 Summary of Significant Accounting Policies The Company has prepared these interim financial statements based on the same accounting policies and computation methods as applied in the financial statements for the year ended December 31, 2006 which were prepared in accordance with generally accepted accounting principles except for Note 2.

12

2. Accounting Changes 2.1 Changes in Accounting Policy

Since January 1, 2007, the Company has changed a method to account for investments in subsidiaries, associates and jointly controlled entities presented in the Company’s financial statements from the equity method to the cost method in accordance with the Notification No. 26/2006 issued by the Federation of Accounting Professions regarding the Accounting Standard No. 44 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries” (Amendment No. 1).

These changes in an accounting policy resulted in applying retrospective method to the Company’s financial statements for the first quarter of 2006 that presented comparatively. The effects from the changes in accounting policy on the Company’s balance sheets as at December 31, 2006 and statements of income for the three-month period ended March 31, 2006 are as follows :

Unit : Million Baht

The Company

Balance Sheets as at December 31, 2006

Decrease in investment in subsidiaries, associates and jointly controlled entities 95,769.09

Decrease in allowances for share of net loss over investments 22.87

Decrease in surplus on dilution of investments 2,950.40

Increase in unrealized gain on available-for-sale securities 12.86

Increase in currency translation differences 994.25

Decrease in retained earnings 93,802.93

Statements of Income for the three-month period ended March 31, 2006

Decrease in share of net income from investments under the equity method 13,467.49

Increase in other income 1,434.37

Decrease in net income 12,033.12

Diluted earnings per share (as stated in Note 14) 4.16

These changes are changes in accounting policy. There is no effect on the preparation of the consolidated financial statements.

13

2. Accounting Changes (Continued) 2.2 Changes in Accounting Estimations

The Company has changed the accounting estimates for the useful lives of assets by extending of accounting useful lives of gas transmission pipeline systems and gas separation plants, using prospective method since January 1, 2007 as follows :

2.2.1 Extension in the useful lives of transmission pipeline systems from 25 years to 40 years by considering corrosion rates and reserved gas volumes as stated in the purchase and sale agreements between the Company and the manufacturers.

2.2.2 Extension in the useful lives of gas separation plant unit#3 from 15 years to 20 years and gas separation plant unit#4 from 15 years to 20 years by considering technical factors as well as plant design.

The extension of the useful lives of transmission pipeline systems and gas separation plants result in a decrease in depreciation expenses of 2007 amounting to approximately Baht 1,256 million.

3. Cash and Cash Equivalents

Cash and cash equivalents as at March 31, 2007 and December 31, 2006 are as follows :

Unit : Million Baht


March 31,

2007 December 31,

2006 March 31,

2007 December 31,

2006 Cash on hand 330.10 279.45 297.66 240.64 Deposits held at call with banks 26,864.05 26,488.86 12,278.85 11,268.47 Fixed deposits 11,146.75 19,587.96 300.00 9,300.00 Treasury bills 21,593.75 6,531.87 6,407.20 1,029.73 Promissory notes 26,339.51 29,247.22 7.24 - Bank of Thailand bonds 17,789.51 4,670.89 17,789.51 4,670.89 Total 104,063.67 86,806.25 37,080.46 26,509.73

Cash and cash equivalents as at March 31, 2007 mainly bear interest at the rates ranging from 0.10% to 5.38% per annum (December 31, 2006: the interest rates ranging from 0.10% to 5.00% per annum).

14

4. Trade Accounts and Notes Receivable – Others, Net

Trade accounts and notes receivable – others as at March 31, 2007 and December 31, 2006 are as follows :

Unit : Million Baht


March 31,

2007 December 31,

2006 March 31,

2007 December 31,

2006 Trade accounts receivable 81,806.93 83,709.20 71,062.77 69,993.48Notes receivable 3,642.85 2,390.97 2,541.71 2,390.97Total 85,449.78 86,100.17 73,604.48 72,384.45Less Allowance for doubtful accounts 1,800.78 2,449.12 1,662.00 1,670.24Trade accounts and notes ‘receivable – others, net 83,649.00 83,651.05 71,942.48 70,714.21 Outstanding trade accounts and notes receivable – others as at March 31, 2007 and December 31, 2006 can be analyzed by their age as follows : Unit : Million Baht


March 31,

2007 December 31,

2006 March 31,

2007 December 31,

2006 Current 70,323.13 70,936.30 59,906.22 59,324.27 Overdue

- Up to 3 months 2,812.14 2,683.07 1,793.42 1,583.28 - Over 3 – 6 months 641.63 959.95 580.53 912.32 - Over 6 – 12 months 2,200.54 2,257.02 2,104.40 2,157.81 - Over 12 months 9,472.34 9,263.83 9,219.91 8,406.77

Total 85,449.78 86,100.17 73,604.48 72,384.45 Less Allowance for doubtful accounts 1,800.78 2,449.12 1,662.00 1,670.24 Trade accounts and notes receivable - others, net 83,649.00 83,651.05 71,942.48 70,714.21 Trade accounts and notes receivable – others, net as at March 31, 2007 include receivables from government agencies and state enterprises in the consolidated financial statements amounting to Baht 24,448.28 million (December 31, 2006: Baht 27,733.79 million), and in the Company’s financial statements amounting to Baht 24,255.07 million (December 31, 2006: Baht 27,614.68 million).

15

5. Related Party Transactions The following are significant transactions carried out with related parties :

5.1 Trade accounts receivable – related parties as at March 31, 2007 and December 31, 2006

Unit : Million Baht


March 31,

2007 December 31,

2006 March 31,

2007 December 31,

2006 Subsidiaries - - 6,766.32 10,415.53 Associates 37,830.88 32,013.50 37,784.60 30,462.38 Other related parties 1,318.05 474.45 908.42 367.09 Joint ventures - - 52.75 94.43 39,148.93 32,487.95 45,512.09 41,339.43 Less Allowance for doubtful accounts 258.43 254.70 266.85 262.55 Total 38,890.50 32,233.25 45,245.24 41,076.88

Outstanding trade accounts receivable – related parties as at March 31, 2007 and December 31, 2006 can be analyzed by their age as follows :

Unit : Million Baht Consolidated The Company

March 31,

2007 December 31,

2006 March 31,

2007 December 31,

2006 Current 38,735.22 32,139.61 41,883.13 37,551.51 Overdue - Up to 3 months 279.96 107.39 176.85 334.70 - Over 3 – 6 months 46.65 99.46 245.93 96.15 - Over 6 – 12 months 85.78 140.21 927.44 2,050.77 - Over 12 months 1.32 1.28 2,278.74 1,306.30 39,148.93 32,487.95 45,512.09 41,339.43 Less Allowance for doubtful accounts 258.43 254.70 266.85 262.55

Total 38,890.50 32,233.25 45,245.24 41,076.88

16

5. Related Party Transactions (Continued)

5.2 Other accounts receivable, advances and short-term loans – related parties as at March 31, 2007 and December 31, 2006


March 31,

2007 December 31,

2006 March 31,

2007 December 31,

2006 Other accounts receivable

Subsidiaries - - 3,914.95 185.35

Associates 321.96 1,364.60 250.03 1,363.00

Other related parties 16.63 0.39 10.91 -

Joint ventures - - 152.04 132.05 338.59 1,364.99 4,327.93 1,680.40 Less Allowance for doubtful accounts 141.70 142.60 146.60 146.88

196.89 1,222.39 4,181.33 1,533.52

Advances Subsidiaries - - 500.07 500.07 Associates 310.04 308.47 310.04 308.47 Other related parties 183.78 263.39 181.27 259.46

493.82 571.86 991.38 1,068.00 Less Allowance for doubtful accounts 309.69 308.47 309.69 308.47

184.13 263.39 681.69 759.53

Short-term loans Joint ventures - - 908.57 302.21

- - 908.57 302.21

Total 381.02 1,485.78 5,771.59 2,595.26

Changes in short-term loans – related parties for the three-month period ended March 31, 2007 are as follows :

Unit : Million Baht

Consolidated The Company Balance as at December 31, 2006 - 302.21 - Payment for loans granted - 606.36Balance as at March 31, 2007 - 908.57

Short-term loans to related parties are unsecured with the interest rates ranging from 6.03% to 6.17% per annum.

17


5.3 Other accounts receivable, advances and long-term loans – related parties as at March 31, 2007 and December 31, 2006

Unit : Million Baht


March 31,

2007 December 31,

2006 March 31,

2007 December 31,

2006 Other accounts receivable Associates 975.97 - 975.97 - Less Allowance for doubtful accounts - - - -

975.97 - 975.97 - Advances Subsidiaries - - 0.97 1.08 Less Allowance for doubtful accounts - - - -

- - 0.97 1.08 Long-term loans Subsidiaries - - 550.00 240.00

Associates 5,807.69 5,807.69 5,807.69 5,807.69 5,807.69 5,807.69 6,357.69 6,047.69

Total 6,783.66 5,807.69 7,334.63 6,048.77

Changes in long-term loans – related parties for the three-month period ended March 31, 2007 are as follows :

Unit : Million Baht

Consolidated The CompanyBalance as at December 31, 2006 5,807.69 6,047.69 - Payment for loans granted - 310.00Balance as at March 31, 2007 5,807.69 6,357.69

Long-term loans to related parties are unsecured with the interest rates ranging from 5.55% to 7.69% per annum.

18

5. Related Party Transactions (Continued) 5.4 Trade accounts payable – related parties as at March 31, 2007 and December 31, 2006

Unit : Million Baht


March 31,

2007 December 31,

2006 March 31,

2007 December 31,

2006 Subsidiaries - - 7,095.71 8,369.36 Associates 28,258.17 28,793.75 28,220.21 28,162.13 Other related parties 485.70 374.29 227.20 267.00 Joint ventures - - 855.41 705.89 Total 28,743.87 29,168.04 36,398.53 37,504.38

5.5 Other accounts payable – related parties as at March 31, 2007 and December 31, 2006

Unit : Million Baht


March 31,

2007 December 31,

2006 March 31,

2007 December 31,

2006 Subsidiaries - - 91.70 233.01 Associates 86.15 449.93 86.15 89.17 Other related parties 304.90 63.16 42.21 48.76 Joint ventures - - 8.74 1.69 Total 391.05 513.09 228.80 372.63

5.6 Other long-term accounts payable – related parties as at March 31, 2007 and December 31, 2006

Unit : Million Baht


March 31,

2007 December 31,

2006 March 31,

2007 December 31,

2006 Subsidiaries - - 191.18 232.18 Joint ventures - - 16.59 16.77 Total - - 207.77 248.95

19


5.7 Revenue and expense transactions carried out with related parties

For the three-month periods ended March 31, 2007 and 2006 Unit : Million Baht

Consolidated

The Company

2007 2006 2007 2006 Revenues

Sales : Subsidiaries - - 8,317.46 45,182.91 Associates 110,203.92 61,900.13 108,666.38 58,634.90 Other related parties 2,459.41 8,797.21 2,459.41 8,797.21 Joint ventures - - 215.56 55.73

Interest income : Subsidiaries - - 55.43 77.74 Associates 81.35 118.39 81.35 118.39 Other related parties - 0.99 - 0.99 Joint ventures - - 8.49 -

Other income : Subsidiaries - - 3,797.29 569.17 Associates 477.35 500.59 442.07 497.52 Other related parties 14.68 84.72 14.68 84.72 Joint ventures - - 6.80 7.48

Expenses Purchases :

Subsidiaries - - 18,553.50 55,892.00 Associates 98,166.61 64,760.96 97,512.03 62,691.56 Other related parties 776.41 1,885.43 739.99 1,885.43

Joint ventures - - 1,614.65 1,382.92 Other expenses :

Subsidiaries - - 110.88 62.86 Associates 49.50 18.37 10.95 9.81 Other related parties 217.00 149.70 194.67 149.70

The above related party transactions exclude transactions carried out with government agencies and state enterprises. Stipulation prices between the Company and its related parties are based on the normal prices used in the same type of business in transactions with others except for the selling prices of natural gas between the Company and an associate, which have a special discount for five years from 2002 to 2007 to support the manufacturing expansion of this associate. However, the purchase volume is insignificant. Goods purchased from a subsidiary are at normal prices determined by the subsidiary with reference to the world market prices.

20

5. Related Party Transactions (Continued) 5.8 Details of commitments to subsidiaries, associates, joint ventures and other related parties are stated

in Note 20.1. 5.9 Directors’ remuneration

Directors’ remuneration for the three-month periods ended March 31, 2007 and 2006 in the consolidated financial statements amounting to Baht 33.58 million (2006: Baht 30.02 million) and in the Company’s financial statements amounting to Baht 10.44 million (2006: Baht 9.80 million) comprises directors’ meeting allowances and bonuses.

5.10 Crude oil purchase and sale transactions carried out with related parties without the delivery of products, with the objective of maintaining crude oil reserves, were offset in the financial statements for the three-month periods ended March 31, 2007 and 2006. Details are as follows :

Unit : Million Baht Consolidated The Company 2007 2006 2007 2006

Sales

Subsidiaries - - - -

Associates - 948.76 - 948.76

Other related parties - 116.81 - 116.81

Purchases

Subsidiaries - - - 239.94

Associates - 1,594.06 - 1,594.06

Other related parties - 116.81 - 116.81

21

6. Investments in Subsidiaries, Associates and Joint Ventures

6.1 Information of subsidiaries, associates and joint ventures of the Company are as follows :

Company Country of

Incorporation Business Shareholding Percentage

March 31, 2007

December 31, 2006

Subsidiaries

PTT Exploration and Production Public Co., Ltd. (PTTEP)

Thailand

Petroleum exploration

and production

66.65 66.13

PTT (Cambodia) Co., Ltd. (PTTCL) Cambodia Oil marketing 100.00 100.00

Subic Bay Energy Co., Ltd. (SBECL) Cayman Islands Oil marketing 100.00 100.00

Retail Business Alliance Co., Ltd. (RBA) Thailand Management services and oil

marketing

49.00 49.00

PTT International Trading Pte. Ltd. (PTTT)

Singapore Oil international trading

100.00 100.00

PTT Natural Gas Distribution Co., Ltd. (PTTNGD)

Thailand Natural gas 58.00 58.00

PTT LNG Co., Ltd. (PTTLNG) Thailand Natural gas 100.00 100.00

PTT Phenol Co., Ltd. (PPCL) Thailand Petrochemicals 40.00 40.00

PTT Chemical Public Co., Ltd. (PTTCH) Thailand Petrochemicals 55.19 55.19

PTT Polymer Marketing Co., Ltd (PTTPM)

Thailand Polymer marketing

75.00 75.00

PTT Utility Co., Ltd. (PTTUT) Thailand

Generation and supply of

electricity, steam and water for

industry

40.00 40.00

Energy Complex Co., Ltd. (EnCo) Thailand

Commercial 50.00 50.00

PTT ICT Solutions Co., Ltd. (PTTICT) Thailand

Information and communication

technology services

20.00 20.00

PTT Polymer Logistics Co., Ltd. (PTTPL)

Thailand

Logistics services 100.00 100.00

22

6. Investments in Subsidiaries, Associates and Joint Ventures (Continued)

6.1 Information of subsidiaries, associates and joint ventures of the Company are as follows : (Continued)

Company

Country of Incorporation Business Shareholding Percentage

March 31,

2007 December 31,

2006 Associates Thai Oil Public Co., Ltd. (TOP) Thailand Refining 49.54 49.54

Star Petroleum Refining Co., Ltd. (SPRC) Thailand Refining 36.00 36.00

Rayong Refinery Public Co., Ltd. (RRC)

Thailand Refining 48.75 48.75

Bangchak Petroleum Public Co., Ltd. (BCP) Thailand Refining 29.75 29.75

Thai Lube Blending Co., Ltd. (TLBC) Thailand Blending and bottling lube oil

48.95 48.95

Thai Petroleum Pipeline Co., Ltd. (THAPPLINE) Thailand Oil transmission pipeline

33.19 34.04

Petro Asia (Thailand) Co., Ltd. (PA (Thailand))

Thailand Oil marketing 35.00 35.00

Vietnam LPG Co., Ltd. (VLPG) Vietnam Bottling and selling LPG

45.00 45.00

KELOIL-PTT LPG Sdn. Bhd. (KPL) Malaysia Bottling and selling LPG

40.00 40.00

Aromatics (Thailand) Public Co., Ltd. (ATC) Thailand Petrochemicals 49.67 49.82

IRPC Public Co., Ltd. (Formerly Thai Petrochemical Industry Public Co., Ltd (TPI))

Thailand Petrochemicals and refining

31.50 31.50

Independent Power (Thailand) Co., Ltd (IPT) Thailand Electricity generation

20.00 20.00

Thai Oil Power Co., Ltd. (TP) Thailand Generation and supply of electricity

26.00 26.00

Joint Ventures

Trans Thai-Malaysia (Thailand) Co., Ltd. (TTM (T))

Thailand Natural gas 50.00 50.00

Trans Thai-Malaysia (Malaysia) Sdn. Bhd. (TTM (M))

Malaysia Natural gas 50.00 50.00

District Cooling System and Power Plant Co, Ltd. (DCAP)

Thailand Generation and supply of

electricity and chilled water

35.00 35.00

PTT Asahi Chemicals Co., Ltd. (PTTAC) Thailand Petrochemicals 47.50 47.50

HMC Polymers Co., Ltd. (HMC) Thailand Petrochemicals 41.44 41.44

23

6. Investments in Subsidiaries, Associates and Joint Ventures (Continued) 6.2 Investments accounted for under the equity method in the consolidated financial statements as at

March 31, 2007 and December 31, 2006 are as follows : Consolidated

Unit: Million Baht

Company

Shareholding percentage March 31, 2007 December 31, 2006

Dividends for the three-month periods

ended March 31 March

31, 2007 December 31, 2006

Cost method

Equity method

Cost method

Equity method 2007 2006

Associates:

Refining Business Group

1 TOP 49.54 49.54 11,483.09 30,965.54 11,483.09 28,093.30 - -

2 SPRC 36.00 36.00 14,770.48 15,492.93 14,770.48 14,733.04 - -

3 RRC 48.75 48.75 8,515.39 20,021.68 8,515.39 19,095.76 - -

4 BCP 29.75 29.75 4,060.18 4,492.37 4,060.18 4,511.24 - -

Oil Business Group

5 THAPPLINE 33.19 34.04 2,682.35 - 2,682.35 - - -

6 TLBC 48.95 48.95 140.00 125.27 140.00 120.38 - -

7 PA (Thailand) 35.00 35.00 131.25 - 131.25 - - -

8 VLPG 45.00 45.00 87.35 105.62 87.35 96.40 - -

9 KPL 40.00 40.00 21.49 12.64 21.49 12.56 - -

10 FST 25.00 25.00 1.13 1.13 1.13 1.10 - -

Petrochemicals Business Group

11 ATC 49.67 49.83 4,423.12 6,767.94 4,423.12 5,539.21 - 966.05

12 IRPC (TPI) 31.50 31.50 20,363.81 23,108.27 20,363.81 21,674.38 - -

13 VNT 24.98 24.98 3,297.39 3,243.42 3,297.39 3,273.54 - -

14 EFT 22.65 22.65 2.26 7.97 2.26 7.43 - -

Natural Gas Business Group

15 IPT 20.00 20.00 400.19 995.31 400.19 915.58 - -

16 AMATA NGD 50.00 50.00 80.00 141.62 80.00 197.71 70.00 -

17 TP 26.00 26.00 2,304.76 2,069.34 2,304.76 1,961.34 - 91.32

Total

72,764.24 107,551.05 72,764.24 100,232.97 70.00 1,057.37

24

6. Investments in Subsidiaries, Associates and Joint Ventures (Continued) 6.3 Investments accounted for under the cost method in the Company’s financial statements as at

March 31, 2007 and December 31, 2006 are as follows :

The Company

Unit: Million Baht

Shareholding percentage Cost method


ended March 31

March 31, 2007 December 31, 2006 March 31, 2007 December 31, 2006 2007 2006 Company

Subsidiaries :

1 PTTEP 66.65 66.13 11,249.10 9,615.13 3,278.88 -

2 PTTT 100.00 100.00 2.50 2.50 - -

3 PTTCL 100.00 100.00 0.23 0.23 - -

4 SBECL 100.00 100.00 1,154.81 1,154.81 - -

5 PTTNGD 58.00 58.00 418.14 418.14 455.88 377.00

6 PTTLNG 100.00 100.00 50.00 50.00 - -

7 PTTPM 75.00 75.00 30.00 30.00 - -

8 EnCo 50.00 50.00 400.00 400.00 - -

9 RBA 49.00 49.00 0.49 0.49 - -

10 PPCL 40.00 40.00 1,080.00 1,080.00 - -

11 PTTUT 40.00 40.00 1,017.00 1,017.00 - -

12 PTTCH 55.19 55.19 35,753.32 35,753.32 - -

13 PTTICT 20.00 20.00 30.00 30.00 - -

14 PTTPL 100.00 100.00 300.00 300.00 - -

Associates:

Refining Business Group

15 TOP 49.54 49.54 11,483.09 11,483.09 - -

16 SPRC 36.00 36.00 14,770.48 14,770.48 - -

17 RRC 48.75 48.75 8,515.39 8,515.39 - -

18 BCP 29.75 29.75 4,060.18 4,060.18 - -

25

6. Investments in Subsidiaries, Associates and Joint Ventures (Continued) 6.3 Investments accounted for under the cost method in the Company’s financial statements as at

March 31, 2007 and December 31, 2006 are as follows : (Continued)

The Company (Continued)

Unit: Million Baht

Shareholding percentage Cost method


ended March 31

Company March 31, 2007 December 31, 2006 March 31, 2007 December 31, 2006 2007 2006

Associates: (Continued)

Oil Business Group

19 THAPPLINE 33.19 34.04 2,682.35 2,682.35 - -

20 TLBC 48.95 48.95 140.00 140.00 - -

21 PA (Thailand) 35.00 35.00 131.25 131.25 - -

22 VLPG 45.00 45.00 87.35 87.35 - -

23 KPL 40.00 40.00 21.49 21.49 - -


24 ATC 49.67 49.82 4,423.12 4,423.12 - 966.05

25 IRPC 31.50 31.50 20,363.81 20,363.81 - -


26 IPT 20.00 20.00 400.19 400.19 - -

27 TP 26.00 26.00 2,304.76 2,304.76 - 91.32

Joint Ventures :


28 TTM (T) 50.00 50.00 5,185.00 5,110.00 - -

29 TTM (M) 50.00 50.00 281.32 281.32 - -

30 DCAP 35.00 35.00 350.00 350.00 - -


31 PTTAC 47.50 47.50 66.50 66.50 - -

32 HMC 41.44 41.44 9,117.12 9,117.12 - -

Total

135,868.99 134,160.02 3,734.76 1,434.37

26

6. Investments in Subsidiaries, Associates and Joint Ventures (Continued) 6.4 Share of net assets and results of operations from joint ventures which are included in the

consolidated financial statements as at March 31, 2007 and December 31, 2006 are as follows :

Balance Sheets :

As at March 31, 2007 and December 31, 2006

Unit : Million Baht

March 31, 2007 December 31, 2006

TTM(T) TTM(M) DCAP PTTAC HMC TTM(T) TTM(M) DCAP

PTTAC HMC

Current assets 1,913.80 77.07 194.30 11.56 3,912.12 1,535.65 89.12 200.63 13.03 4,149.17

Non-current assets 13,938.33 763.23 972.01 54.66 4,267.11 13,526.64 770.05 986.47 53.56 3,940.60

Current liabilities (1,897.56) (15.97) (144.18) (0.08) (803.18) (1,166.22) (24.31) (123.48) (0.41) (1,060.29)

Non- current liabilities (8,608.97) (573.16) (733.25) - (691.36) (8,877.34) (586.59) (770.00) - (708.55)

Net assets 5,345.60 251.17 288.88 66.14 6,684.69 5,018.73 248.27 293.62 66.18 6,320.93

Statements of Income :

For the three-month periods ended March 31, 2007 and 2006 Unit : Million Baht

2007 2006

TTM(T) TTM(M) DCAP PTTAC HMC TTM(T) TTM(M) DCAP

PTTAC HMC

Income 615.07 27.32 135.40 0.02 2,247.68 502.34 14.29 29.53 - -

Expenses (363.19) (14.96) (140.14) (0.06) (1,821.98) (153.48) (2.28) (32.07) - - Gain(loss) before

taxes 251.88 12.36 (4.74) (0.04) 425.70 348.86 12.01 (2.54) - -

Income taxes - (6.22) - - (61.94) - (0.25) - - -

Net income(loss) 251.88 6.14 (4.74) (0.04) 363.76 348.86 11.76 (2.54) - -

27

6. Investments in Subsidiaries, Associates and Joint Ventures (Continued)

6.5 Significant events during the three-month period ended March 31, 2007 are as follows :

PTTEP

In the first quarter of 2007, warrants in PTTEP were exercised under the Employee Stock Ownership Program (ESOP) as detailed in Note 13. The effect from dilution of investments amounting to Baht 21.45 million was recognized as surplus on dilution of investments in subsidiaries and associates in shareholders’ equity. In addition, after the exercise of warrants, the Company acquired 17.32 million additional ordinary shares in PTTEP from third parties amounting to Baht 1,633.98 million. Hence, as at March 31, 2007, the Company’s shareholding percentage in PTTEP was 66.65%. Goodwill arising from the acquisition was Baht 1,189.18 million.

ATC

As at March 31, 2007, the Company’s shareholding percentage in ATC decreased from 49.82% to 49.67%, resulting from the exercise of warrants in ATC under the Employee Stock Ownership Program (ESOP) as detailed in Note 13. The effect from dilution amounting to Baht 0.49 million was recognized as surplus on dilution of investments in subsidiaries and associates in shareholders’ equity.

TTM(T)

On March 21, 2007, TTM(T) called for payment of additional share capital from shareholders amounting to Baht 150 million. The Company paid for its shareholding percentage of 50% amounting to Baht 75 million. THAPPLINE On February 22, 2007, a shareholder of THAPPLINE exercised the right to acquire remaining additional preferred shares in THAPPLINE amounting 2.11 million shares at Baht 100 per share totalling Baht 211 million in accordance with the resolution of THAPPLINE’s extraordinary shareholders’ meeting No. 1/2005 on September 9, 2005 and No. 2/2005 on September 26, 2005. As a result, as at March 31, 2007, the Company’s shareholding percentage in THAPPLINE decreased from 34.04%. to 33.19%.

28

7. Other Long-term Investments Other long-term investments as at March 31, 2007 and December 31, 2006 are as follows :

Unit : Million Baht


March 31,2007

December 31, 2006

March 31,2007

December 31, 2006

General investments 1,310.49 1,271.49 376.52 337.52

Investments in available-for-sale securities

- Investments in equity instruments 336.00 336.00 336.00 336.00

- Investments in debt securities 585.60 585.60 585.60 585.60

- Investments in mutual funds 99.86 300.45 - -

Add Allowance for increase in fair value of investments 660.04 635.78 659.00 635.00

Total 2,991.99 3,129.32 1,957.12 1,894.12

7.1 Information of other long-term investments of the Company is as follows :

Company

Country of Incorporation Business Shareholding

Percentage

March 31, 2007

December 31, 2006

Petro Asia (Huizhou) Co., Ltd. (PA (Huizhou)) China Oil marketing 25.00 25.00

Petro Asia (Shantou) Co., Ltd. (PA (Shantou)) China Oil marketing 15.00 15.00

PTT Mart Co., Ltd. (PTT Mart)

Thailand Management services 49.00 49.00

Fuel Pipeline Transportation Co., Ltd. (FPT) Thailand Oil pipeline 2.76 2.76

Intoplane Services Co., Ltd. (IPS)

Thailand

Aircraft refuelling services

16.67 16.67

Ratchaburi Power Co., Ltd. (RPCL)

Thailand Electricity generation

15.00 15.00

Dhipaya Insurance Public Co., Ltd. (TIP) Thailand Insurance 13.33 13.33

Bangkok Aviation Fuel Services Public Co., Ltd. (BAFS)

Thailand

Aircraft refuelling services

7.06 7.06

29

7. Other Long-term Investments (Continued) 7.2 Other long-term investments as at March 31, 2007 and December 31, 2006

Unit : Million Baht

Shareholding percentage Consolidated The Company

Dividends for the three-month

periods ended March 31

Company March 31, 2007

December 31, 2006

March 31, 2007

December 31, 2006

March 31, 2007

December 31, 2006 2007 2006

General Investments

1 PA (Huizhou) 25.00 25.00 15.16 15.16 15.16 15.16 - -

2 PTT Mart 49.00 49.00 78.40 78.40 78.40 78.40 - -

3 FPT 2.76 2.76 44.00 44.00 44.00 44.00 - -

4 IPS 16.67 16.67 0.02 0.02 0.02 0.02 - -

5 PA (Shantou) 15.00 15.00 60.84 60.84 60.84 60.84 - -

6 RPCL 15.00 15.00 376.50 337.50 376.50 337.50 - -

7 API 16.67 16.67 290.24 290.24 - - - -

8 ROC 5.91 5.91 643.73 643.73 - - 191.24 -

9 BAPT 2.07 2.07 18.19 18.19 - - - -

Total investments accounted for under the cost method 1,527.08 1,488.08 574.92 535.92

Less Allowance for impairment of investments 216.59 216.59 198.40 198.40

Total general investments 1,310.49 1,271.49 376.52 337.52

Investments in Available-for-sale Securities

Investments in Equity Instruments

10 TIP 13.33 13.33 312.00 312.00 312.00 312.00 - -

11 BAFS 7.06 7.06 24.00 24.00 24.00 24.00 - -

Total investments in equity instruments 336.00 336.00 336.00 336.00 - -

Investments in Debt Securities 585.60 585.60 585.60 585.60 - -

Investments in Mutual Funds 99.86 300.45 - - - -

Add Allowance for increase in fair value of investments 660.04 635.78 659.00 635.00 - -

Total investments in available-for-sale securities 1,681.50 1,857.83 1,580.60 1,556.60 - -

Total other long-term investments 2,991.99 3,129.32 1,957.12 1,894.12 191.24 -

30

7. Other Long-term Investments (Continued)

7.3 Significant events during the three-month period ended March 31, 2007

RPCL

On December 13, 2006 and January 9, 2007, RPCL’s ordinary shareholders’ meetings passed a resolution to increase the authorized share capital of RPCL from Baht 2,325 million to Baht 3,325 million. On February 5, 2007, RPCL called for the payment from shareholders for additional shares amounting to Baht 260 million. The Company paid for its shareholding percentage of 15% amounting to Baht 39 million.

Investments in Mutual Funds On March 13, 2007, a mutual fund of a subsidiary was closed because the number of unit trust holders did not comply with the mutual fund’s regulations. The mutual fund paid average returns from liquidation to unit trust holders.

The Group accounted for investments in some associates under the cost method, adjusted by allowance for impairment of investments, since the Company intended to dispose of these investments.

In the consolidated financial statements, allowance for impairment of investments in associates and other related companies amounting to Baht 216.59 million comprises allowance for impairment of investments in PTT Mart, PA (Huizhou), FPT, PA (Shantou) and BAPT amounting to Baht 78.40, 15.16, 44.00, 60.84 and 18.19 million, respectively, and in the Company’s financial statements the allowance amounting to Baht 198.40 million

31

8. Property, Plant and Equipment, Net

Property, plant and equipment as at March 31, 2007 and December 31, 2006 are as follows :

Unit : Million Baht

Consolidated

Land Buildings Machinery Oil and Other Construction Total

and and Gas assets in progress

building equipment properties

improvements

Cost

As at December 31, 2006 6,586.81 17,344.13 187,622.75 199,055.41 11,977.54 90,646.96 513,233.60 - Additions 73.23 43.89 253.81 8,165.68 149.27 14,147.38 22,833.26 - Borrowing costs - - - - - 884.77 884.77 - Reclassification 297.38 597.14 6,109.99 - (518.64) (2,376.72) 4,109.15 - Disposal - (1.34) (195.37) (30.93) (17.36) (149.66) (394.66) - Currency translation differences - (0.19) (10.09) (218.06) (1.00) (0.34) (229.68) As at March 31, 2007 6,957.42 17,983.63 193,781.09 206,972.10 11,589.81 103,152.39 540,436.44

Accumulated Depreciation

As at December 31, 2006 - (9,123.27) (78,099.58) (79,937.34) (8,280.57) - (175,440.76) - Additions - Depreciation for the period - (205.02) (1,852.59) (3,471.37) (264.69) - (5,793.67) - Reclassification - 68.73 (691.91) 55.98 498.22 - (68.98) - Disposal - 1.48 193.53 (0.47) 8.86 - 203.40 - Currency translation differences - 0.06 0.23 - 0.61 - 0.90 As at March 31, 2007 - (9,258.02) (80,450.32) (83,353.20) (8,037.57) - (181,099.11)

Provision on Impairment of Assets

As at December 31, 2006 (42.87) (373.13) (244.96) - - - (660.96) As at March 31, 2007 (42.87) (373.13) (244.96) - - - (660.96)

Net Book Value

As at December 31, 2006 6,543.94 7,847.73 109,278.21 119,118.07 3,696.97 90,646.96 337,131.88 As at March 31, 2007 6,914.55 8,352.48 113,085.81 123,618.90 3,552.24 103,152.39 358,676.37

32

8. Property, Plant and Equipment, Net (Continued)

Unit : Million Baht

The Company

Land Buildings Machinery Other Construction Total

and and assets in progress

building equipment

improvements

Cost

As at December 31, 2006 3,865.07 12,622.79 116,966.42 8,023.25 72,118.28 213,595.81

- Additions - 13.79 205.26 101.04 5,248.09 5,568.18

- Borrowing costs - - - - 808.29 808.29

- Reclassification 151.50 511.23 5,715.16 (547.55) (6,682.27) (851.93)

- Disposal - (1.34) (193.26) (13.04) (74.49) (282.13)

As at March 31, 2007 4,016.57 13,146.47 122,693.58 7,563.70 71,417.90 218,838.22

Accumulated Depreciation

As at December 31, 2006 - (7,195.76) (59,301.45) (5,854.87) - (72,352.08)

- Depreciation for the period - (129.13) (950.54) (174.70) - (1,254.37)

- Reclassification - 0.41 (583.86) 583.46 - 0.01

- Disposal - 1.09 193.05 8.84 - 202.98

As at March 31, 2007 - (7,323.39) (60,642.80) (5,437.27) - (73,403.46)

Provision on Impairment of Assets

As at December 31, 2006 (42.87) (373.13) (244.96) - - (660.96)

As at March 31, 2007 (42.87) (373.13) (244.96) - - (660.96)

Net Book Value

As at December 31, 2006 3,822.20 5,053.90 57,420.01 2,168.38 72,118.28 140,582.77

As at March 31, 2007 3,973.70 5,449.95 61,805.82 2,126.43 71,417.90 144,773.80

Borrowing costs in the consolidated financial statements amounting to Baht 884.77 million (December 31, 2006 : Baht 2,881.90 million) and in the Company’s financial statements amounting to Baht 808.29 million (December 31, 2006 : Baht 2,778.17 million) were capitalized as part of costs of property, plant and equipment. The Group used capitalization rates ranging from 3.66% to 7.23% (December 31, 2006 from 4.00% to 7.23%) Buildings, manufacturing plants, machinery and equipment of Baht 19,731.87 million in the consolidated financial statements were used as collateral for long-term loans amounting to Baht 7,990.25 million (the Company’s financial statements none).

33

8. Property, Plant and Equipment, Net (Continued)

As at March 31, 2007 and December 31, 2006, the other assets included vehicles acquired under finance leases have details as follows :


March 31, 2007 December 31,

2006March 31, 2007 December 31,

2006Cost 1,034.38 851.71 594.19 546.74 Less: Accumulated 269.04 214.84 96.57 73.77 Net book value 765.34 636.87 497.62 472.97

9 . Intangible Assets

Intangible assets as at March 31, 2007 and December 31, 2006 are as follows :

Unit : Million Baht Consolidated The Company Net book value as at December 31, 2006 22,596.92 3,665.78 - Additions 1,866.59 39.68 - Disposal (2.63) (2.63) - Amortization (567.47) (90.57) - Reclassification 867.16 852.19 - Currency translation differences (19.41) - Net book value as at March 31, 2007 24,741.16 4,464.45

10. Advance Payment for Gas Purchased

Advance payments for gas purchased as at March 31, 2007 and December 31, 2006 are as follows :

Unit : Million Baht Consolidated The Company Balance as at December 31, 2006 16,598.18 20,629.67 Less Make-up during the period 600.52 759.54 Balance as at March 31, 2007 15,997.66 19,870.13

The Company paid in advance for the committed gas volumes from Yadana and Yetagun gas fields in the Union of Myanmar, irrespective of take-up in 1999-2001, according to the established minimum volumes in the Export Gas Sales Agreements (Take-or-Pay). The Company had the right to take certain volumes of prepaid gas (Make-up) in subsequent years, with no maturity period.

34

11. Long-term Loans

Long-term loans as at March 31, 2007 and December 31, 2006 are as follows : Current Portion of Long-term Loans

Unit : Million BahtConsolidated The Company

March 31,

2007December 31,

2006March 31,

2007 December 31,

2006Loans – Baht currency 4,687.48 12,258.15 4,000.00 11,000.00 Loans – Foreign currencies 568.71 391.85 380.01 391.85 Bonds – Baht currency 1,757.14 1,750.58 - - Bonds – Foreign currencies 6,784.32 7,002.59 - - Liabilities from finance leases 222.78 208.97 110.65 101.18 Total 14,020.43 21,612.14 4,490.66 11,493.03

Long-term Loans


March 31,

2007December 31,

2006March 31,

2007 December 31,

2006Loans – Baht currency 56,550.99 52,940.73 47,400.00 44,400.00 Loans – Foreign currencies 28,886.82 29,315.14 19,318.40 19,852.01 Bonds – Baht currency 85,086.57 72,181.70 80,158.00 70,118.00 Bonds – Foreign currencies 38,502.36 43,327.16 25,872.01 30,309.76 Liabilities from finance leases 599.79 574.58 404.84 386.67 Total 209,626.53 198,339.31 173,153.25 165,066.44 As at March 31, 2007, long-term loans amounting to Baht 45,670.73 million (December 31, 2006: Baht 46,741.52 million) in the Company’s financial statements were secured by the Ministry of Finance. As at March 31, 2007, the Group’s long-term loans amounting to Baht 7,990.25 million (December 31, 2006: Baht 7,637.46 million) in the consolidated financial statements were secured by machinery, buildings, manufacturing plants and structures. In addition, the Group had commitments to comply with various conditions stipulated in the loan agreements. On March 23, 2007, the Company entered into a loan agreement amounting to Baht 6,000 million with a maturity period of 10 years, bearing a floating interest rate at maximum interest rate of six-month fixed deposit plus 1.125% per annum, payable every six months. The principal is repayable in installments of Baht 500 million every six months from September 2011 to March 2017.

35

11. Long-term Loans (Continued)

11.1 Loans

Movements of loans in Baht currency and foreign currencies as at March 31, 2007 and December 31, 2006 are as follows : Unit : Million Consolidated

Currency Total equivalent in

Baht

Baht US Dollar Yen

Balance as at December 31, 2006 64,230.09 655.67 23,000.00 94,905.87 - Additions 7,101.05 - - 7,101.05 - Repayments (10,092.68) (10.18) - (10,461.49) - Gain on exchange rate - - - (851.43) - Current portion (4,687.48) (16.19) - (5,256.19) Balance as at March 31, 2007 56,550.98 629.30 23,000.00 85,437.81 Unit : Million The Company

Currency Total equivalent in

Baht

Baht US Dollar Yen

Balance as at December 31, 2006 55,400.00 364.63 23,000.00 75,643.86 - Additions 6,000.00 - - 6,000.00 - Repayments (10,000.00) - - (10,000.00) - Gain on exchange rate - - - (545.45) - Current portion (4,000.00) (10.82) - (4,380.01) Balance as at March 31, 2007 47,400.00 353.81 23,000.00 66,718.40

36


11.2 Bonds Bonds as at March 31, 2007 and December 31, 2006 are as follows : Unit : Million Consolidated March 31, 2007 December 31, 2006 USD Baht USD Baht

Unsecured unsubordinated bonds - USD currency 1,290.45 45,286.68 1,390.67 50,329.75 - Baht currency - 86,843.71 - 73,932.28

Less Current portion - USD currency (193.28) (6,790.88) (193.28) (7,002.59) - Baht currency - (1,750.58) - (1,750.58)

Total 1,097.17 123,588.93 1,197.39 115,508.86 Unit : Million The Company March 31, 2007 December 31, 2006 USD Baht USD Baht

Unsecured unsubordinated bonds - USD currency 736.35 25,872.01 836.57 30,309.76 - Baht currency - 80,158.00 - 70,118.00

Total 736.35 106,030.01 836.57 100,427.76 The Company and the Group issued bonds and entered into cross currency and interest rate swap contracts for some bonds. Details are as follows : On June 20, 2005, the Company issued unsecured unsubordinated bonds for sale to financial institutional investors amounting to Baht 4,040 million with a redemption period of 10 years at a fixed interest rate of 4.75% per annum. However, the Company entered into a cross currency swap contract to swap Baht bonds for USD bonds amounting to USD 100 million at a fixed interest rate of 4.55% per annum, to be redeemed on June 20, 2015. In addition, on January 16 and January 18, 2007, the Company entered into an agreement with financial institution for cancellation of commitments in accordance with a cross currency swap contract to swap Baht currency amounting to Baht 4,040 million at an interest rate of 4.75% per annum for USD currency of USD 100 million at a fixed interest rate of 4.55% per annum. In canceling the agreement, the company received compensation from financial institution amounting to Baht 450 million. Consequently, the Company has commitments in Baht currency as before. On March 20, 2007, the Company issued unsecured unsubordinated bonds for sale to financial institutional investors amounting to Baht 6,000 million with a redemption period of 8 years at a

37


fixed interest rate of 4.86% per annum, payable every six months, to be redeemed on March 20, 2015. On March 27, 2003, PTTEP issued 2,500,000 unsecured unsubordinated bonds at a face value of Baht 1,000 per unit totalling Baht 2,500 million with a redemption period of 15 years. The bonds bear interest at a rate of 4.625% per annum, payable every six months on March 27 and September 27 of every year, to be redeemed on March 27, 2018. However, PTTEP entered into a cross currency swap contract to swap Baht bonds for the USD currency of USD 60.82 million at an interest rate of 3.85% per annum. On February 12, 2007, PTTEP issued 3,500,000 unsecured unsubordinated bonds at a face value of Baht 1,000 per unit totalling Baht 3,500 million with a redemption period of 3 years. The bonds bear interest at a rate of 4.88% per annum, payable every six months on February 12 and August 12 of every year, to be redeemed on February 12, 2010.

11.3 Liabilities from Finance Leases

Liabilities from finance leases as at March 31, 2007 and December 31, 2006 are as follows :


March 31, 2007

December 31, 2006

March 31, 2007

December 31, 2006

Liabilities from finance leases - Not later than 1 year 267.65 252.66 143.07 132.49 - Later than 1 year and not later than 5 years 644.87 620.73 437.77 420.86

Future finance charges on finance leases (89.95) (89.84) (65.35) (65.50) Present value of liabilities from finance leases 822.57 783.55 515.49 487.85 Present value of liabilities from finance leases

- Current liabilities (Not later than 1 year) 222.78 208.97 110.65 101.18 - Non-current liabilities (Later than 1 year

and not later than 5 years) 599.79 574.58 404.84 386.67 Total 822.57 783.55 515.49 487.85

12. Provision for Decommissioning Costs

The Group recognized provision for liabilities as at March 31, 2007 and December 31, 2006 for decommissioning costs expected to be incurred in the future amounting to Baht 10,415.44 million and Baht 10,712.39 million, respectively. The provision was estimated based on existing technology and current prices by the Group’s engineers and management’s judgment.

13. Share Capital

As at March 31, 2007, the Company had authorized share capital of 2,857,245,725 ordinary shares (as at December 31, 2006: Baht 2,857,245,725 ordinary shares) with a par value of Baht 10 each. The issued and fully paid-up share capital was 2,805,112,825 ordinary shares (as at December 31, 2006: Baht 2,804,925,625 ordinary shares). Details are as follows :

38

13. Share Capital (Continued)

Date of issue and offer of warrants

Exercise price (Baht per

Share)

Exercise right (warrant per

ordinary share)

The number of exercised warrants

(Million units)

The number of unexercised

warrants (Million units)

Last exercise date of warrants

September 1, 2005 183 1 : 1 7.87 32.13 August 31, 2010 September 29,

2006 234 1 : 1 - 20.00 September 28, 2011

7.87 52.13

14. Earnings per Share

Basic earnings per share is calculated by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares which are held by third parties during the period. For the calculation of diluted earnings per share, the Company assumes that warrants of the Group given to directors, management and employees that can be exercised are converted to ordinary shares. The exercise of these warrants resulted in net income of the Group, recognized in the Company’s financial statements, adjusted by decreases in shareholding proportions. The number of diluted shares was calculated by using a market price (an average market price of the Company’s ordinary shares during the period) and exercise prices. This calculation is prepared to determine the number of ordinary shares to be added to ordinary shares held by third parties for the calculation of diluted earnings per share. Basic earnings per share and diluted earnings per share in the consolidated financial statements for the three-month periods ended March 31, 2007 and 2006 are calculated as follows: Consolidated

Basic Earnings per Share Diluted Earnings per Share 2007 2006 2007 2006

Net income attributable to ordinary shareholders (Baht) 22,580,779,423 23,722,791,817 22,580,779,423 23,722,791,817

Adjustment of net income (Baht) - - (1,004,313) (19,423,067)Net income for calculation of earnings

per share (Baht) 22,580,779,423 23,722,791,817 22,579,775,110 23,703,368,750 Weighted average number of ordinary

shares for calculation of earnings per share (Shares) 2,804,992,185 2,797,245,725 2,808,456,349 2,807,605,780

Earnings per share (Baht/share) 8.05 8.48 8.04 8.44

39

14. Earnings per Share (Continued) Basic earnings per share and diluted earnings per share in the Company’s financial statements for the three-month periods ended March 31, 2007 and 2006 are calculated as follows : The Company Basic Earnings per Share Diluted Earnings per Share 2007 2006 2007 2006

Net income attributable to ordinary shareholders (Baht) 12,549,030,171 11,689,672,365 12,549,030,171 11,689,672,365

Weighted average number of ordinary shares for calculation of earnings per share (Shares)

2,804,992,185

2,797,245,725

2,808,456,349

2,807,605,780

Earnings per share (Baht/share) 4.47 4.18 4.47 4.16

The adjustment of net income resulted from the issue of name registered and non-transferable warrants by the Company and the Group to their directors, management and employees. The Company issued warrants under the Employee Stock Ownership Plan (ESOP) as detailed in Note 13. PTTEP PTTEP had registered share capital of 3,322 million ordinary shares with a par value of Baht 1 per share, totalling Baht 3,322 million. On February 13, 2007, PTTEP registered for the change in its issued and fully paid-up capital to be 3,286.35 million ordinary shares with a par value ot Baht 1 per share, totalling Baht 3,286.35 million.

PTTEP has reserved ordinary shares for the exercise of warrants under the Employee Stock Ownership Plan (ESOP) for 5 years consecutively, totalling 62 million ordinary shares. As at March 31, 2007, the employees had exercised warrants for 26.35 million ordinary shares. Therefore, the remaining reserved shares were 35.65 million shares. Details are as follows :


Exercise price (Baht per Share)


ordinary share)


(Million units)



Last exercise date of

warrants August 1, 2002 22.2 1 : 5 9.71 0.29 July 31, 2007

August 1, 2003 23.4 1 : 5 7.14 2.86 July 31, 2008

August 1, 2004 36.6 1 : 5 6.50 7.50 July 31, 2009

August 1, 2005 55.6 1 : 5 3.00 11.00 July 31, 2010

August 1, 2006 91.2 1 : 5 - 14.00 July 31, 2011

26.35 35.65

40

14. Earnings per Share (Continued) ATC ATC issued and offered warrants under the Employee Stock Ownership Plan (ESOP) as follows :




ordinary share)


(Million units)




February 2, 2004 10 1 : 1 14.38 0.22 November 23, 2007

PTTCH PTTCH issued and offered warrants under the Employee Stock Ownership Plan (ESOP) as follows:




ordinary share)


(Million units)




September 29, 2006 66.50 1 : 1 - 29 September 28,

2011

1 5. Other Income

Other income for the three-month periods ended March 31, 2007 and 2006 are as follows :

Unit : Million Baht Consolidated The Company 2007 2006 2007 2006 Interest income 1,055.00 783.35 478.90 437.31 Penalty income 165.88 123.49 165.74 147.25 Transportation income 797.86 895.70 829.28 1,380.47 Dividend income 191.24 - 3,734.76 1,434.37 Compensation for loan interest of advance

payment for gas purchased - 483.91 - 483.91 Gain on foreign exchange 1,652.82 4,986.98 861.25 2,273.43 Others 938.23 669.15 912.60 376.13 Total 4,801.03 7,942.58 6,982.53 6,532.87

Compensation for loan interest of advance payment for gas purchased (Take-or-Pay) represents the Company’s compensation received from the Electricity Generating Authority of Thailand (EGAT) and the Independent Power Plants (IPPs) to absorb interest on loans raised by the Company for advance payment for gas purchased.

41

16. Share of Net Income from Investments under Equity Method

Share of net income from investments under the equity method for the three-month periods ended March 31, 2007 and 2006 include share of gain (loss) on foreign exchange as follows :

Unit : Million Baht

Consolidated 2007 2006

Share of net income before gain (loss) on foreign exchange 6,313.83 2,092.79Add Share of gain (loss) on foreign exchange 863.57 1,439.00

Total 7,177.40 3,531.79 17. Segment Information

The Company presented financial information by business segments, not by geographical segments. The reason is that geographical segments other than Thailand reported less than 10% of the consolidated revenues, operating results and total assets. Consolidated For the three-month period ended March 31, 2007

Unit : Million Baht Exploration, production

and natural gas

Oil

Natural gas


and production

Petro-

chemicals Others

Elimi- nation

Total

Sales - others 230,317.72 51,617.16 4,086.19 14,938.16 - - 300,959.23

- related parties 1,363.04 10,559.50 16,471.29 6.86 - (28,400.69) -

Petroleum royalties and remuneration - - (2,680.07) - - - (2,680.07)

Net sales 231,680.76 62,176.66 17,877.41 14,945.02 - (28,400.69) 298,279.16

Gross margin 3,779.52 11,036.00 12,916.71 3,882.60 - (185.20) 31,429.63

EBITDA 2,559.25 11,187.19 15,285.24 4,139.25 (497.98) (8.61) 32,664.34

Depreciation and ‘amortization 499.10 1,089.89 3,587.39 797.03 37.33 350.89 6,361.63EBIT 2,060.15 10,097.30 11,697.85 3,342.22 (535.31) (359.50) 26,302.71

Share of net income (loss) from investments under equity method 0.05 13.92 (2.37) (10.22) 13,766.51 (6,590.49)

7,177.40Interest-net (1,518.70)

Other income 920.35 Gain on foreign

exchange 1,652.81

Income taxes (8,382.22)

Minority interests (3,571.57)

Net Income 22,580.78

42

17. Segment Information (Continued) Consolidated For the three-month period ended March 31, 2006 Unit : Million Baht Exploration, production

and natural gas

Oil

Natural gas


and production Refining

Petro-

chemicals Others

Elimi- nation

Total

Sales - others 202,445.05 42,876.03 5,141.34 7,657.25 15,331.48 - - 273,451.15

- related parties 32,576.29 13,311.39 16,452.52 36,841.84 2,283.44 - (101,465.48) -

Petroleum royalties and remuneration - - (3,197.03) - - - - (3,197.03)

Net sales 235,021.34 56,187.42 18,396.83 44,499.09 17,614.92 - (101,465.48) 270,254.12

Gross margin 4,159.94 10,417.74 13,819.03 2,478.42 5,425.50 - 104.69 36,405.32

EBITDA 2,627.08 10,481.05 15,626.70 2,924.10 5,552.12 (234.47) (210.64) 36,765.94

Depreciation and ‘amortization 515.32 1,186.63 3,197.70 444.52 644.56 9.77 63.41 6,061.91EBIT 2,111.76 9,294.42 12,429.00 2,479.58 4,907.56 (244.24) (274.05) 30,704.03

Share of net income (loss) from investments under equity method 0.06 16.72 (0.72) - (12.13) 13,467.49 (9,939.63) 3,531.79

Interest-net (2,003.94)

Other income 817.06Gain on foreign

exchange 4,986.98

Income taxes (9,561.64)

Minority interests (4,751.49)

Net Income 23,722.79

Pricing among business segments is based on normal market prices except for pricing among sectors within the Company, for which net market prices, after deducting management fees of petroleum terminals and operating fees, are applied.

EBITDA means Earnings before interest expenses, finance costs, income taxes, depreciation and

amortization, including other expenses and income which are not relevant to the operations.

EBIT means Earnings before interest expenses, finance costs, income taxes, including other

expenses and income which are not relevant to operations.

43

17. Segment Information (Continued) The Group categorizes segments for major businesses as follows :

Oil Business The Group conducts oil business in both domestic and overseas, which can be categorized into two income generating activities as follows : 1. Oil marketing : marketing of fuel oil and lubricant products through retail, commercial and

international markets

2. International oil trading : importing and exporting crude oil, fuel oil products, raw materials and petrochemical products.

Exploration, Production and Natural Gas Business The Group conducts a fully integrated exploration, production and natural gas business, which can be categorized by business operations as follows : 1. Natural gas business : The Group conducts natural gas business including procurement, natural

gas pipeline transmission, and natural gas separation and distribution in both domestic and overseas markets.

2. Petroleum exploration and production business : The Group conducts petroleum exploration and

production business in both domestic and overseas markets. The Group is the operator and jointly invests with the leading exploration and production companies. Most domestic projects are located in the Gulf of Thailand. Overseas projects cover the Asia Pacific and Middle East regions.

Refining Business The Group conducts refining business including processing and distribution of finished oil products to serve both domestic and overseas customers. Petrochemical Business The Group conducts petrochemical business including procurement of feedstock for petrochemical plants, and production and distribution of main petrochemical products and by products for both domestic and overseas markets. Other operations of the Group mainly comprise other segments, none of which constitutes a separately reportable segment.

18. Reclassification For comparative purposes, the Group has reclassified certain items in the consolidated and the Company’s financial statements for the three-month period ended March 31, 2006 to ensure consistency with the presentation in the consolidated and the Company’s financial statements for the three-month period ended March 31, 2007. The reclassifications do not affect the reported net income.

19. Promotional Privileges

The Company received promotional privileges from the Board of Investments (BOI) under the Investment Act, B.E. 2520 (1977) for the Gas Separation Plant Unit #5 project, the Sainoi-South Bangkok Power Plant gas pipeline project, the third gas offshore and onshore pipeline project, the Song-khla Power Plant gas pipeline project, the District Cooling and Cogeneration at Future Park Rangsit project, the Ethane Separation Plant project, the Suvarnabhumi-Phayathai NGV gas distribution pipeline project, and the distribution gas pipelines to the Rojana Industrial Park project. The promotional privileges include exemption from import duties on the machinery approved from BOI and corporate income tax exemption on net income from promotional business for eight years staring from the date on which the first sale is realized.

44

20. Commitments and Contingent Liabilities Significant changes in commitments and contingent liabilities are as follows :

20.1 Commitments to subsidiaries, associates, joint ventures and other related companies are as follows

: According to a condition with a financial institution, the Company entered into two Shareholder’s Commercial Support Arrangements with its subsidiaries and associates at credit limits of USD 100 million and USD 90 million, respectively. The Company has obligations under the arrangements in forms of an extended credit for raw materials and/or advance product payments. As at March 31, 2007, the commercial credit lines were not used.

The Company has an obligation with a subsidiary in a foreign country under a commercial credit agreement in a form of an extended credit for raw materials at a credit limit of USD 100 million. As at March 31, 2007, the subsidiary had used the commercial credit line of USD 95.23 million. The remaining commercial credit line was USD 4.77 million or approximately Baht 167.60 million.

The Company entered into Sponsor Support Agreements with two joint ventures at a credit limit equal to the loan obligations of the two joint ventures to a financial institution. As at March 31, 2007, the Company had the remaining commitment of USD 262.15 million or approximately Baht 9,210.75 million.

As at March 31, 2007, the Group and the Company had obligations under various Shareholder Agreements to pay for ordinary shares totalling Baht 10,630.47 million in the consolidated financial statements and Baht 4,000.47 million in the Company’s financial statements.

20.2 As at March 31, 2007, the Group and the Company had contingent liabilities in a form of letters of

guarantee amounting to Baht 1,206.59 million in the consolidated financial statements and Baht 161.36 million in the Company’s financial statements.

20.3 On August 31, 2006, the Foundation for Consumers and a group of five individuals (the "Claimants") filed a complaint to the Supreme Administration Court, naming the Prime Minister, the Cabinet and the Minister of Energy as respondents (the "Respondents"), seeking the court to order to revoke two Royal Decrees issued under the Corporatization Act B.E. 2542 (A.D. 1999) in relation to the privatization of the Petroleum Authority of Thailand to PTT Public Company Limited. The two Royal Decrees were the Royal Decree Determining the Powers, Rights and Benefits of PTT Public Company Limited B.E. 2544 (A.D. 2001) and the Royal Decree Determining the Time for Repealing the Laws Governing the Petroleum Authority of Thailand B.E. 2544 (A.D. 2001). On September 4, 2006, the Supreme Administration Court issued an order to accept this complaint. The Respondents made a statement to the court, and the Claimants prepared a dispute over the Respondents’ statement and submitted it to the court in accordance with the procedures of the Administration Court. On January 22, 2007, the Respondents prepared and submitted an additional statement to the court.

However, the Company filed a petition to act as a litigant in the lawsuit. On November 28, 2006, the Supreme Administration Court issued an order to permit the Company to act as a litigant. On December 29, 2006, the Company, as the 4th Respondent, submitted a statement to the court, on February 26, 2007, the Claimants filed a dispute over the Company’s statement. On April 4, 2007, the Company prepared and submitted an additional statement to the court. The lawsuit is currently under the consideration of the Supreme Administration Court.

45

46

21. Subsequent Events

21.1 On April 19, 2007, the board of directors of the Company signed the Share Sale and Purchase Agreement with ConocoPhillips Company (COP) for the acquisition of COP’s retail petroleum business in Thailand. Upon the acquisition, the Company will establish a wholly-owned subsidiary to acquire total shares of COP’s four subsidiaries carrying out such business, namely Conoco (Thailand) Company Limited, JET /Jiffy Shops limited, Siam Conoco Terminal Limited and its subsidiary namely Siam Conoco Land Limited. The total value of the transaction is approximately USD 275 million. The transaction is subject to the fulfillment of customary conditions, including but not limited to the warranties being true and correct and the receipt of corporate approval for the transaction by PTT and COP. The transaction is expected to be completed by midyear 2007.

21.2 On April 30, 2007, the annual general of the Company’s shareholders approved the dividend payments for the year 2006, at Baht 10.50 per share, amounting to Baht 29,452.75 million or represents 31% of net income. On September 22, 2006, the Company paid the interim dividends for the operating results of the first-half of 2006 at Baht 5 per share amounting to Baht 14,024.63 million. The remaining dividends of Baht 5.50 per share amounting to Baht 15,428.12 million will be paid on May 15,2007.

21.3 The Audit Committee of the Company approved these financial statements for public issuance on May 9, 2007.

_____________________

listed companyptt.listedcompany.com/misc/financials/q107_en.pdf · ( translation) auditor’s...

Documents