Ptt 01 by Brother Roger

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PTT Public Company Limited 8

PTT Information

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Name

PTT Public Company Limited

Initial

PTT

Registered Number

Bor Mor Jor 671

Type of Business

Engage in integrated gas and petroleum business, other supports activities including with a dominant position in oil and investment in related business.

Number of Employees

As of December, 31 2001 employees of PTT, its Subsidiaries and Joint Ventures numbered 3,868 (PTT : 3,157/ PTTEP : 616/ PTT Philippines (PTTPI) : 13/ PTT International Trading Pte., Ltd. (PTTT) : 3/ Trans Thai-Malaysia (Thailand) Co., Ltd. (TTM (T)) : 66/ Trans Thai-Malaysia (Malaysia) Co., Ltd. (TTM (M)) : 13

Location

555 Vibhavadi-Rangsit Road, Ladyao, Chatuchak, Bangkok 10900, Thailand

Telephone

0-2537-2000

Telefax

0-2537-3498-9

Web Site

http://www.pttplc.com

Registered Capital

Baht 28,500 million, including 2,850 million common shares, Baht 10 per share (as of December 31, 2001)

Paid-up Capital

Baht 27,972,457,250, including 2,797,245,725 common shares, Baht 10 per share (as of December 31, 2001)

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References Share Registra

Thailand Securities Depository Company Limited 4th floor, SET Building, 62 Ratchadapisek Road, Klongtoey, Bangkok 10500 Telephone : 0-2359-1200-1 Telefax : 0-2359-1259

Auditor

Office of the Auditor General Rama VI Road, Phayathai, Bangkok 10400, Thailand Telephone : 0-2618-5803 Telefax : 0-2618-5807

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Annual Report

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Financial Ratio

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9 2001

2001 Financial Highlight

1999

2000

2001

Total assets (million baht)

199,156

229,854

291,216

Total liabilities (million baht)

177,961

199,776

221,090

21,195

30,078

70,126

Sales revenues (million baht)

230,763

371,455

377,902

Total revenues (million baht)

234,921

375,527

386,415

Net income (loss) (million baht)

(6,260)

12,280

21,565

Net profit on revenues (%)

-2.66

3.29

5.58

Return to shareholders (%)

47.90

43.04

Return to total assets (%)

5.72

8.28

Net income (loss) per share (baht)

7.71

Book value per share (baht)

25.07

Total shareholderûs equity (million baht)

Note : PTT Public Company Limited was incorporated as a public company on October 1, 2001 on corporatization from the Petroleum Authority of Thailand (çPTTé) under the Corporatization Act of B.E. 2542 (1999), that is assumed transfer of all business, rights, debts, liabilities, assets and equity from PTT at book value in the audited balance sheet as at September 30, 2001. The financial performance for the year ended December 31, 2001 stated above, based on the audited financial statements for the nine-month period ended September 30, 2001 as well as the consolidated financial statements for the three-month period ended December 31, 2001 which have already been audited by the State Audit Office in comparison with the audited financial statements for the year ended December 31, 2000. The change of PTTEPûs accounting policies for investments in joint ventures from the cost method to the equity method, also effected its earnings for the year ended December 31, 2000 as well as for the nine-month period ended September 30, 2001 previously disclosed. However, the financial statements for the year ended December 31, 2001 and 2000 (restated), prepared by the Company, are unaudited by the State Audit Office.

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PTT Public Company Limited 10

Message from the Chairman

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The corporatization of PTT under the Corporatization Act B.E. 2542 (A.D. 1999) historically marked 2001, a year of glorious milestone for PTTûs corporate development ever undertaken. Yet, a successful capital funding of over Baht 30 billion in both domestic and international markets as planned has brought such an eminent pride to the nation. The said fame has also clearly attested to the strong confidence from Thai and foreign investors towards PTT as well as Thailandûs economic recovery. With this success, Finance Asia Magazine has named PTTûs IPO, çThe Best IPO of the Yearé. The growth of gross domestic product at a mere 1.5% in 2001 adversely affected the petroleum industry, which was seen in a rise of consumption of all types of fuel at 3% over the previous year. Natural gas received highest acceptance as its growth peaked, higher than other types of fuels. On the contrary, oil products uses continued to drop. Consequently, Thailand had to expand its oil exports in order to relieve oversupply and generate more revenue. It can be said that PTTûs strong commitment to enhance business efficiency continuously coupled with a business strategy development to cope with changing circumstances are a vital key contributing to a satisfactory performance in its operation. At the end of 2001, total revenues of PTT and subsidiaries recorded at Baht 386.415 billion, a rise of Baht 10.888 billion or 2.9% over the previous year. Total net profit, after revenue tax of Baht 1.204 billion for the operation from October 1, 2001 until the end of the year, was Baht 21.565 billion, a rise of Baht 9.285 billion. Apart from business objectives, PTTûs social and environmental responsibilities are no less important. As evidence of this, the companyûs natural gas pipeline across the country was certified ISO 14001. Moreover, the success of the companyûs research and development has resulted in high quality lubricants which were authorized to carry a green label from Thailand Environment Institute, the first of its kind in Thailand. Hence, PTT aims to expand lubricant production lines to increase market coverage in all areas for higher sale and market shares. The worldûs economic prospects for 2002 remain uncertain which will accordingly affect opportunities for economic revival in Thailand. Nonetheless, it is expected that the demand for natural gas will continue to grow to serve as fuel used for power generation. Adding a pivotal support to this scheme is the governmental policy itself to promote more natural gas use in industrial and transportation sectors as a way of improving the quality of the environment. With regards to oil business, a competition is expected to become even more intensified.

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Annual Report 11 2001

Under such scenario, PTT has chosen Strategic Cost Leadership (SCL) program as a tool to achieve cost leadership aimed at cost curtailment of operation, raw materials and others to the lowest level possible. The company will as well maximize the utilization of existing operation network and maintain service standards and closer relationship with customers in order to obtain highest profit. PTT plans to expedite and move forward with major projects i.e. exploration activities for new gas fields conducted by PTTEP, the Natural Gas Pipeline Master Plan III, an adoption of Supply Chain Management to support trading activities, on which PTT places a great deal of importance. In addition, it intends to expand the markets in Indochina and other potential regions together with fostering cooperation with refineries and petrochemical companies in the group. On behalf of the Board of Directors, I would like to herewith express my sincere thanks to customers, shareholders, partners, the Government, employees as well as financial institutes, media and the public for the generous support rendered to us over the past year. I am confident that the success we have witnessed would form a solid foundation for the prosperity of the company in the years to come.

Manu Leopairote Chairman of the Board of Directors

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PTT Public Company Limited 12

Report of The Audit Committee for 2001

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The Board of Directors of the PTT formally appointed the Audit Committee on 24 August 2000 which comprised three independent directors; Mr. Pala Sookawesh as Chairman and Mr. Chaiwat Wongwattanasan and Mr. Sommai Khowkachaporn as members. The corporatization of PTT into PTT Public Co., Ltd. on 1 October 2001 resulted in the reconstitution of the Board of Directors and also the Audit Committee. The Audit Committee now comprises : Mr. Chaiwat Wongwattanasan Mr. Chongrak Rarueysong Mr. Olarn Chaipravat

Chairman Member Member

The role of the Audit Committee is to promote good corporate governance through ensuring PTT has a proper system of internal controls and appropriate risk management practices. As set out in the Audit Committee Charter dated 1 October 2001, approved by the Board of Directors, the Audit Committee discharges its duties mainly by

ë reviewing the adequacy, transparency and objectivity of PTTûs financial reporting processes ë reviewing the adequacy and effectiveness of the internal control systems and internal audit function ë reviewing compliance with the Securities and Exchange Act., including the rules, notifications, and regulations thereof; and the rules and regulations of the Stock Exchange of Thailand and any other relevant laws ë reviewing compliance to resolutions of the Cabinet and policies of the Board of Directors ë preparing a report on the activities of the Audit Committee for the Companyûs annual report ë performing any other duties as delegated by the Board of Directors with the consent of the Audit Committee. In discharging its duties, the Audit Committee routinely interacts and receives formal reports from management, the Internal Auditing Office (IAO) and Office of the Auditor General (OAG). In 2001, the Audit Committee held four regular meetings and two extraordinary meetings with these parties to :

ë Determine the adequacy of the Audit Committeeûs operations ë Review the quarterly and annual financial statements of PTT, its subsidiaries and associates to ensure transactions are conducted and recorded and complies with proper accounting principles ë Review the annual internal audit plan (2002) and long term internal audit plans (2002 - 2004) prepared by the IAO ë Review the independence and adequacy of internal audits performed by the IAO and OAG ë Review results of operational audits performed in 2001 by the IAO for the Company, its subsidiaries and associates ë Review results of internal audits over the security of computer systems ë Review potential obligations, claims and litigation of PTT ë Nominate the OAG to serve as PTTûs auditor and recommend OAGûs remuneration that is subject to approval at the General Meeting of Shareholders for fiscal year 2002.

Mr. Chaiwat Wongwattanasan Chairman of the Audit Committee

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Annual Report

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13 2001

Petroleum Overview in 2001

Dubai Crude Oil Prices, 2001 Unit : US$/BBL 35.0 Average Dubai = 22.8 US$/BBL 30.0 24.8

25.0 22.9

25.6 25.7 23.4 24.2

23.4 24.5

24.1 Terrorist attacks in the U.S.A.

19.6 17.7 17.8

20.0 15.0

Jan

Mar

May

Jul

Sep

Nov

In 2001 the world underwent its fourth recession in thirty year period, as seen in an overall global growth below 2.5%. The International Monetary Fund (IMF) estimated that the economic growth posted only 2.4% in 2001, compared to 4.7% in 2000. Much of this was due to a major setback of The U.S.A. economy, which accounted for 30.5% of global GDP and thus had an impact on growth rates in other regions. Despite a poor economic performance, a moderate rise of petroleum at 0.2 million barrels per day (mbd), or about 0.3%, to 75.7 mbd, the price of crude oil in 2001 stayed above US$22 a barrel (bbl) for as long as nine months the result of three reductions in output, totalling 3.5 mbd, by OPEC members. Crude oil prices, however, after the terrorist attacks in U.S.A., dropped quickly to below US$20 bbl for the first time in twenty-five months. It reflected the fears of global economic fallout and an increase in output by non-OPEC nations, which had invested heavily in production during 1999, when crude oil prices were high. The average price of crude oil for the entire 2001 was thus US$22.8 bbl. Domestic Petroleum overview World-wide economic recession had a depressing effect on Thai exports, and thus managed to stifle the incipient recovery of 2000. Many sectors of the local economy consequently suffered. The terrorist attacks in the U.S.A. and subsequent operations against terrorist in Afghanistan served to damage the confidence of investors and consumers even further. However, economic stimulus measures at the grassroots level, prevented a further economic shortfall to some extent. An economic recovery rate of the latter part of the year registered at 1.8%, compared to 4.6% in 2000.

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PTT Public Company Limited 14

The domestic consumption of petroleum (excluding the petrochemical industry) increased by 3.7% from 2000 to 931,800 barrels per day (b/d). Of this amount, 588,100 b/d took the form of processed petroleum, while natural gas accounted for 343,600 b/d. Total petroleum procurement, whether produced domestically or imported from abroad, amounted to 1,238,700 b/d, up 6.9% from the previous year. Thai reliance on petroleum imports rose from 63% in 2000 to 65% in 2001 while Thai exports increased by 9.5% to 156,100 b/d. Domestic Oil situation The domestic consumption of refined products in 2001 amounted to 588,100 b/d. This represented a 2.3% decline after a drop of 4.5% in 2000. Much of this difference can be explained by a 73.4% cut in the use of fuel oil for power generation and the use of natural gas as a substitute. If we exclude the dwindling use of fuel oil for power generation, however, the consumption of processed petroleum actually rose by 3.0% after a slight fall of 0.6% in 2000, signalling the beginning of better times. Almost every type of petroleum products registered growth over 2000ûs figures, except for cooking gas and fuel oil. This was due to a price stability during the year, and began to drop from the middle of the year. Consumption of oil products was thus able to mirror the general level of economic activity, which grew by 1.5%. Procurement of oil products in 2001 amounted to 731,100 b/d, down 0.4% from 2000. Of this quantity, output from refineries, natural gas separation plants, and petrochemical plants in Thailand amounted to 723,000 b/d, up 2.5% from the previous year, while only 8,100 b/d were imported, 63.8% lower than in 2000. As the supply of the products outstripped demand during the year, 119,800 b/d were accordingly exported. This represents an increase of 13.4%. The procurement of crude oil and condensate as feedstock for refineries amounted to 826,100 b/d, up 5.3% from 2000. Of this amount, 113,700 b/d were procured from the domestic sources, up 2.9% from the year before. Thailand had, nonetheless, to import 86% of its crude oil needs from abroad, totalling 712,400 b/d or 5.6% more than in 2000. Thailand was able, on the other hand, to export 36,000 b/d of crude from Tantawan and Benchamas fields, or 3.7% less than the year before. Domestic Natural Gas Situation The consumption of natural gas in 2001 continued to grow sharply from the previous year, rising 15.7% to 2,349.1 million standard cubic feet per day (MMscfd). Of this amount, 1,821.2 MMscfd were used in power generation. This was 16.0% higher than the year before, reflecting an increase in power consumption of 6.0% and a rise in the proportion of natural gas being used as fuel from 62% in 2000 to 69% in 2001. Natural gas was introduced as a substitute for fuel oil during the year at the Bang Pakong and South Bangkok Power Plants. It was also the fuel of choice at new power plants; namely, Ratchaburi Power Plants 1 and 2, completed in 2001

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Annual Report 15 2001

with a production capacity of 1,470 megawatts, and two new plants of independent power producers (IPPs): TriEnergy Co., Ltd. (700 megawatts) and Independent Power (Thailand) Co., Ltd. (700 megawatts), both of which were completed in 2000 and commenced full output in 2001. Besides these new sources of greatly increased demand for natural gas, industrial plants and natural gas separation plants also required considerably larger supplies. Their demand rose by 15.4% to 176.8 MMscfd and by 14.7% to 351.1 MMscfd, respectively. Procurement of natural gas increased by 15.1% to 2,351.8 MMscfd. Of this amount, 1,853.7 MMscfd were obtained from local sources, down 1.4% from 2000, while 498.1 MMscfd was imported from Myanmar, 205.9% more than the year before. Prospects for Petroleum in 2002 The International Monetary Fund expects that the world economic growth in 2002 would be around 2.4%, similar to that in 2001, which would then significantly weakened the consumption of oil to rise by 1-2%. Crude oil prices are forecast to stay at around US$19-22 per barrel. Economic growth in Thailand has been projected to reach 2-3%, primarily driven by domestic consumption which boosted through several governmental stimulus packages i.e. state spending plan and support for the private sector. Owing to a projected healthier economy in addition to a softening a prices of world crude oil, consumption is then expected to grow slightly at a rate of 1.3% to 596,000 b/d, compared to the consecutive falls of 3.4% per annum in the previous two years. The rise is projected in all types of oil products. Furthermore, natural gas consumption is forecast to increase 7.0% to 2,513 MMscfd, as a result of the increase of electricity demand of 7.5% couple with the completion of new power plants using natural gas as fuel, i.e. the Ratchaburi Combined Cycle Power Plant with a production capacity of 2,175 megawatts and plants under IPPs program that will generate another 1,000 megawatts.

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PTT Public Company Limited 16

T h a i l a n d ûs P e t r o l e u m B a l a n c e : 2 0 0 1

Supply Import Oil Products Crude Oil Natural Gas

Subtotal

Indigenous

65%

35%

Crude Oil

Condensate

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Unit : KBD

Oil Products Consumption Export

Refineries Total Capacity 1,012 KBD LPG Gasoline Jet/Kerosene Diesel Fuel Oil

47 143 82 287 110

Subtotal

669

Gas Separation Plants Total Capacity 1,225 MMSCFD LPG 49

LPG* 64 Gasoline 118 Jet/Kerosene 65 Diesel 263 Fuel Oil 78

24 26 15 28 27

Subtotal 588 120 * Excluding Feedstocks

Crude Oil/Condensate Export 36 Natural Gas

Petrochemical Plants LPG 5

Consumption

Natural Gas

319

Power Plants 313 Industries 31

Subtotal

433

Subtotal

Total Supply

1,239

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Consumption/Export

806

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Production 8 712

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344

Total Consumption 932 Export

156

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Annual Report

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Operational Result In 2001

The business activities of PTT include a fully integrated natural gas business, domestic and international marketing and trading of crude oil, condensate, petroleum and petrochemical products, and investment in domestic refining and petrochemical industries. An integration of operations can be illustrated as the following chart:

Upstream

Exploration and Production (PTTEP)

Midstream

Natural Gas

Downstream

Marketing & Distribution

Transmission Network Natural Gas Mix

Natural Gas Procurement

Natural Gas Chain

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Gas Separation Plants

Marketing & Trading Natural Gas Products

Petrochemical Associates

Condensate and Crude Oil

Trading

Marketing & Trading

Refining Associates Condensate Crude Oil

Crude Oil Procurement

Oil Chain

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17 2001

Marketing & Trading

Product Procurement

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PTT Public Company Limited 18

Natural Gas Business Group In 2001, 2,294 million standard cubic feet per day (MMscfd) of natural gas was procured under all contracts of PTT, up 16% from the year before. The gas was transmitted to all customer groups via a 2,657-km pipeline network having a maximum delivery capacity of 3,170 MMscfd. The ratio of natural gas procured from domestic and overseas sources, altered from 93:7 in 2000 to 78:22 in 2001, respectively. Sale gas to various customer rose by 17% to 2,291 MMscfd. The significant growth in consumption of natural gas was a result of higher demand from power producers who are responding to higher demand for electricity, especially Independent power producers (IPPs) and small power producers (SPPs) which became operational at maximum capacity. Whilst two plants of Electricity Generating Authority of Thailand (EGAT): Bang Pakong and Southern Bangkok power plants also switched to use natural gas as fuel oil substitute. PTT began to take delivery of the natural gas from Myanmar already paid under take or pay obligation, since April 2001, worth Bath 191.80 million. Natural Gas Transmission Pipeline length (km) Pipeline capacity (MMscfd)

1999 2,495 3,170

2001 2,657 3,170

2000 2,495 3,170

Natural Gas Supply /1

Sources / Year Domestics Unocal/2 Bongkot Pailin Tantawan/Benchamas Namphong Subtotal International Yadana Yetagun Subtotal Total Note :

1999 MMscfd %

2000 MMscfd %

2001 MMscfd %

959 55.1 542 31.1 52 3.0 100 5.7 89 5.1 1,742 100

910 46.1 515 26.1 169 8.6 163 8.3 69 3.5 1,826 92.6

853 37.2 549 23.9 149 6.5 187 8.2 58 2.5 1,796 78.3

1,742 100

110 36 146 1,972

379 16.5 119 5.2 498 21.7 2,294 100

5.6 1.8 7.4 100

Volume is calculated at a heat value of 1,000 BTUs per cubic foot. Excluding the JDA gas purchase agreement because operations in the JDA have not commenced. /2 Including natural gas supplied under Unocal1, Unocal 2-3 gas purchase agreements. /1

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Annual Report 19 2001

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PTT Public Company Limited 20

Natural Gas Marketing and Distribution 1999 2000 MMscfd % MMscfd 1,073 61.9 1,099 2 0.1 105 268 15.5 305 124 7.2 153 266 15.3 292 1,733 100 1,954

Customers / Year 1. EGAT 2. IPPs 3. SPPs 4. Industrial 5. Natural Gas Separation Plants Total

% 56.3 5.4 15.6 7.8 14.9 100

2001 MMscfd % 1,069 46.7 360 15.7 349 15.2 177 7.7 336 14.7 2,291 100

Note: volume of natural gas is calculated at 1,000 BTUs per cubic foot

Natural gas processing from separation plants in 2001 was so efficient that all types of products rose at a level of 8-16% e.g. ethane rose by 11.31% to 542,549 tonnes. During the same period, an amount of olefins production from the gas based plant of National Petrochemical Public Co., Ltd. (NPC), likewise reached its peak since commencing its operation. Natural Gas Products Products / Year 1. Ethane (tonnes) 2. Propane (tonnes) 3. LPG (tonnes) 4. Natural gasoline (barrel)/1 /1

1999 422,338 168,487 1,220,324

2000 487,402 185,292 1,281,277

2001 542,549 206,489 1,396,144

Change (%) 11.3 10.3 9.0

2,460,290

3,164,963

3,678,372

16.2

Excluding sales of NGL from DPCU (Dew Point Control Unit)

With regards to exploration and production activities, sales volume of natural gas, crude oil and condensate of PTT Exploration and Production Public Co., Ltd. (PTTEP), PTTûs subsidiary, in 2001 averaged approximately 91,623 barrels of oil equivalent per day (Boe/d), 14% up from 2000ûs figures. As of December 31, 2001, net proved reserves of PTTEPûs and its subsidiaries prepared under the requirement of US financial accounting standard, FAS 69, in term of oil equivalent was 829 million barrels (MMBoe), a rise of 6% from the year before (inclusive of PTT investment in PT Medco Energi Internasional Tbk. (Medco) in which PTT has equity interest of 34.18%, as of January 1, 2002 and as certified by Gaffney, Clines & Associates (Consultants) Pte. Ltd. Oil Business Group The Oil Business Group is engaged in two main types of businesses: (1) Oil marketing of fuels and lubricants in Thailand (retail and commercial markets) and abroad (2) Oil trading, i.e. importing and exporting crude oil, condensate, finished oil products, feedstock, and petrochemical products

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Annual Report 21 2001

Oil Marketing PTT was able to maintain the highest market share in the retail sector for the ninth consecutive year in 2001. The market share for the products excluding fuel oil sold to EGAT, accounted for 29.1%, down slightly from 29.3% in 2000. Total sales volume was 12.162 billion litres, or down 15.8% from the previous year, and fuel oil was 46.8% lower, due to the use of natural gas as a substitute fuel for power generation. Liquefied petroleum gas (LPG) witnessed a 7.9% increase in sales, particularly in the form of exports, with China being the main ‹purchaser. In anticipation of intensified competition, PTT has therefore selectively placed an emphasis on the service stations posing return opportunities only. Subsequently, the number of service stations was decreased by 6.4% to 1,422. Without a plan to increase the number of stations, PTT intends to improve the quality of existing service stations. Sale Volume of Oil Products Products/1 / Year Gasoline and diesel Fuel Oil LPG Jet Fuel Others /2 Total Petrol Station (No.) /3 LPG Retail Outlet (No.) /3 LPG Bottling Plant (No.) /3

1999 6,577 4,985 1,952 1,216 126 14,856 1,531 1,114 107

2000 6,700 3,623 2,241 1,722 162 14,448 1,519 1,045 110

2001 6,184 1,928 2,417 1,453 180 12,162 1,422 922 105

Unit : Million litre Change (%) (7.7) (46.8) 7.9 (15.6) 11.1 (15.8) (6.4) (11.8) (4.6)

Including sales volume of Fuel Oil, Diesel, Gasoline, Jet Oil, LPG, Lubricants and Asphalt Excluding LPG distributing to be raw material for PTT and its dealerûs Petrochemical industry /2 Others include Asphalt, Condensate, Natural Gasoline, Additive and Sales Promotion products etc. /3 Of PTT and its dealer

International Trading Over the past year, the volume of PTTûs international trading increased by 3.4% to 19,170 million litres. Higher sales were attained for crude oil, condensate, and petrochemical products. Sales of crude oil increased by 1,704 million litres or 18.2% from 2000ûs figures as demand from refineries rose. In 2001 Thai Oil Co., Ltd. (TOCL), the largest refinery in Thailand, to which PTT supplies feedstock at 49.99% of its refinery capacity according to contract, had refined 195,000 barrels of crude oil reporting highest utilization rate at 88.7%.

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PTT Public Company Limited 22

The sale of condensate, feedstock used by industry and refineries, rose by 11.9%. Last year, due to a high domestic demand for condensate, PTT then did not export any of this product. The trade in petrochemicals products includes both the procurement of feedstock for companies in the Group and the marketing and export of such products i.e. benzene, toluene, paraxylene, natural gasoline, and by-products. Sales of PTT managed to increase by 15.9% to 1,396 million litres, whilst the domestic demand grew slightly. Volume of International Trading for each of Products Products / Year

1999

Crude oil/1 Condensate Refined petroleum products Petrochemical products Total /2 /1 /2

2000

6,111 2,012 5,937 1,050 15,110

9,376 2,053 5,911 1,205 18,545

Unit : Million litre Change (%) Compare with Year 2000

2001

11,080 2,297 4,397 1,396 19,170

18.2 11.9 (25.6) 15.9 3.4

Crude oil including international trading, Naphtha and Natural Gasoline Excluding sales volume between business group and volume supplied to Thai Oil for which we paid Thai Oil a processing fee only

Petrochemicals and Refining Business Group Petrochemical overview As a result of the sluggish world economy in 2001, petrochemical products demand further shrank from the year ago as well as the products remained in oversupply. The products price continued to plummet and was lower than 2000ûs level. The year-over-year rise in overall products consumption at 4.0%, however could not prevent an oversupply. The upstream production rate was 90-100%, while downstream production rate stood at 80-100%. Exports included 10-15% of the total production of ethylene, together with 40-60% of polymer (PE, PP, PVC, PS) productions. Most of which were sold to China, Hongkong, Vietnam and Asean Countries.

Petrochemical Business Olefins Product Thai Olefins Co., Ltd. National Petrochemical Plc.

Aromatics Product

Chemical Fertilizer

Aromatics (Thailand) Plc. Thai Paraxylene Co., Ltd.

National Fertilizer Plc.

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Annual Report 23 2001

Products of PTTûs associated petrochemical companies Product National Petrochemical Plc. (NPC) Ethylene Propylene Thai Olefins Co., Ltd. (TOC) Ethylene Propylene Pyrolysis Gasoline Mixed C4 Aromatics (Thailand) Plc. (ATC) Paraxylene Benzene Toluene Orthoxylene Mixed Xylenes National Fertilizer Plc. (NFC) Chemical fertilizer

1999

Unit : Tonnes per year 2000 2001

338,515 115,761

399,588 132,086

412,323 134,780

339,000 176,000 139,000 71,000

393,000 203,000 154,000 70,000

392,565 190,523 126,516 65,904

300,400 223,891 43,808 16,989 12,645

321,488 253,221 81,365 20,454 14,151

389,897 298,115 87,304 32,236 17,437

389,549

536,579

455,348

Refining Business Group Refining overview In the past year, domestic consumption for almost every type of oil products rose, totalling 588,100 b/d, down 2.3% from 2000. The country exported a total of 119,800 b/d, up 13.4%. The business was progressing only in the beginning of the year during the cold weather, however, overcapacity of the products both in the country and a region and slowdown in world economy, forced the refineries to operate at low margin levels. Furthermore, the effect from terrorist attacks in The U.S.A. which led to a further depressing economy coupled with a decrease of aviation fuel use resulted in a drop of refining margin from the previous year. Singapore refining margins fell from US$1.81 bbl in 2000 to US$0.65 in 2001. PTT has equity interests in 4 refineries; namely, Thai Oil Co., Ltd., (TOCL) Rayong Refinery Co, Ltd., (RRC) Star Petroleum Refining Co., Ltd. (SPRC) and Bangchak Petroleum Public Co., Ltd. (BCP)

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PTT Public Company Limited 24

Domestic Refineries Unit : KBbl/d Year ended December 31, 2001 2000

1999 Refinery

2001

Distillation Crude Oil Utilization Distillation Crude Oil Utilization Distillation Crude Oil Utilization Capacity Throughput Rate (%) Capacity Throughput Rate (%) Capacity Throughput Rate (%)

Thai Oil RRC* SPRC Bangchak

220 145 150 120

166 150 151 98

75.4 103.3 100.5 81.4

220 145 150 120

171 145 144 88

220 145 150 120

77.6 100.3 96.1 73.0

195 140 140 75

88.7 96.2 93.0 62.9

Source : Department of Commerce Registration, Ministry of Commerce * RRC had its plantûs annual shut down for 27 days during February 5th to March 3rd 2001.

Total Sales Volume of Associated Refineries Unit : KBbl/d Year ended December 31, 2001 2000

1999 Refinery

Sales Domestic Volume Market (%)

Thai Oil/1 RRC SPRC Bangchak/2 /1 /2

159 152 155 102

93.0 86.3 70.1 98.6

Export Market (%) 7.0 13.7 30.0 1.4

Sales Domestic Volume Market (%) 165 145 144 92

85.2 88.8 75.9 95.7

Export Market (%) 14.8 11.2 24.1 4.3

2001 Sales Volume 192 145 143 84

Domestic Market (%)

Export Market (%)

82.3 86.1 77.1 99.0

17.7 13.9 22.9 1.0

Thai Oilûs sales volume excludes products sold to petrochemical companies and others Bangchak has procured some refined petroleum products from local refineries for sales for the portion that its production could not meet up with demand.

Summary In sum, overall operation of PTT was remarkably successful in 2001, especially, in gas business of which procurement and distribution grew by 16.0%. In the meantime, PTT also maintained the largest market share of oil products for the 9th consecutive year. As for international trading, volume of products climbed 3.4%. However, due to a downturn economy of Thailand and the region, businesses of petrochemical and refining groups remained stagnant. In 2002, the economy has shown a slight upward trend and it is expected that business competition still continues. On that account, PTT has to adjusted its marketing strategies in a timely manner to cope with changes with a goal to play a leadership role in the business persistently.

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VIETNAM LAOS Chiang Rai

MYANMAR Chiang Mai

Lampang Den Chai Udon Thani Nakhon Panom

Phitsanulok

THAILAND

Khon Kaen

Nakhon Sawan

Bang Pa-In Samut Sakhon

Surat Thani Nakhon Si Thammarat Phuket

Nakhon Ratchasima Saraburi Ubon Ratchatani Lamlukka Prakhanong Bangchak Siracha Ban Rong Po CAMBODIA Sattahip

Pak Phanang

Songkhla Trang Hat Yai

MALAYSIA

PTT Petroleum Terminal, Oil Depot, LPG Storage and Aviation Fuel Depot Petroleum Terminal

Oil Depot

LPG Storage

Aviation Fuel Depot

Annual Report 25 2001

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PTT Public Company Limited 26

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Annual Report

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33 2001

Q u a l i t y, S a f e t y, O c c u p a t i o n a l H e a l t h, and The Environment

5S At PTT, every operational unit is required to implement 5S program, and receives a regular ongoing audit for this purpose since 1990. The Company has managed to maintain 5S standards for twelve consecutive years. While practising 5S internally, PTT has as well promoted 5S principles externally, for both the public and private sectors. To promote its philosophy to general public, PTT has received 5S visits, and also produced and disseminated 5S brochures and posters to visitors for promoting correct and effective implementation. Accordingly, various organizations have, requested tours of PTTûs facilities, including head office, oil and petroleum terminals and Rayong and Khanom gas separation plants. PTT has, furthermore, paid particular attention to the schools located surrounding LPG depots, oil, and petroleum terminals and gas separation plants throughout the country. We have, consequently, established 5S teaching programs for students and teachers at these schools as a way of better discipline in Thai youth. At present there are a total of 57 schools participating in 5S programs: 19 under sponsorship of Gas Business Group and 37 under sponsorship of Oil Business Group. QC and Mini-QC In 2001, PTTûs ùModern Financeû QC group won acclaim for its exceptional QC work as it was chosen to be PTTûs representative to present their work in a çThai State Enterprise QC Conventioné. The group was later selected to represent Thailand in the International Convention on QC Circles at Taipei, Republic of China. Quality Systems PTT first received ISO 9000 certification in 1997; up until present, PTT has already received more than 40 accreditations at all of its operational areas in both the Oil Business and Gas Business Groups, including petroleum terminals, gas separation plants, gas pipeline operation centres, and service stations. Another great pride for management and staff was a success of Rayong Gas Separation Plant, which received Prime Ministerûs Industry Award under quality Management category.

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PTT Public Company Limited 34

Safety and Occupational Health Management PTT has continued to implement safety management systems in accordance with ISRS standard and TISI 18001 certification. In 2001, PTT received Outstanding Safety in the Workplace Awards from the Ministry of Labour and Social Welfare at five sites; namely, Phitsanulok Oil Terminal, Nakhon Sawan Petroleum Terminal, Lampang Petroleum Terminal, Surat Thani Petroleum Terminal, and Songkhla Petroleum Terminal. Environmental Management Due to its commitment to protect and preserve the environment, PTT always complies with all legal requirements, such as conducting environmental impact assessments (EIAs) for new projects and environmental impact monitoring for projects both under construction and already completed. For this reason, in 2001 PTT received EIA Award from the Ministry of Science, Technology and the Environment for Khanom Gas Separation Plant for the third consecutive year. On the energy conservation front, PTTûs Head Office and Rayong Gas Separation Plant received an Outstanding Award for Energy-efficient under public relations category from the Technology Energy Conserving Promotion Association on July 16th, 2001 Moreover, with regards to ISO 14001 certification for environmental management standards, four sites; namely, Denchai Oil Terminal, Udon Thani Oil Terminal, PTT Prakanong Office, and the PTT Research and Technology Institute were certified, making a total of 22 certified areas. PTT made considerable progress in petroleum product research and development aimed at reducing impact on the environment, protecting carûs engine and improving air quality. As a result, PTTûs lubricants were the first brand permitted to carry the Green Label, i.e. PTT Performa Synthetic and PTT Hi-Speed 2T.

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Annual Report

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35 2001

Social and Environmental Commitment

Besides its commercial goal to increase competitiveness and make profit along with ensuring good corporate governance, PTT is committed to social and environment responsibilities seriously. This commitment is expressed through a variety of activities, including the following: Environmental Activities PTT has volunteered to undertake reforestation on 1 million rai (400,000 acres) as part of the Reforestation Project in Honour of His Majesty the King. At the end of 2001, PTT has completed a plantation covering an area of 920,000 rai at 378 sites in 44 provinces throughout the country. The Company is also determined to maintain and protect these newly forested areas for the indefinite future through various supplementary programs that encourage local communities to take part in their maintenance. Local participation is essential to restore the land to their original state. The success of this project reflected a strong responsibility towards the quality of society and the environment, especially in areas where PTT has its own operations. For this reason, PTT has been earnest to undertake rehabilitation along the Yadana natural gas pipeline route, covering an area of 30,000 rai. PTT has, moreover, joined the Thailand Environment Institute in establishing urban parks dedicated to His Majesty on the occasion of his 72nd birthday. This program is called çSuan Bhumiraksa: Urban Parks in the Cityé. Social Activities During 2000-2001, PTT organized a pilot project to convert 100 volunteer taxis to enable them to use natural gas for vehicles (NGV). The purpose of this project was to provide a less expensive fuel as an alternative to gasoline and to build public confidence in the use of bi-fuel system that allows engine to run on either gasoline or natural gas. Under the project, PTT offered free installations, the result of which was to provide a substitute for the consumption of approximately 5,000 litres of gasoline per day, or 1.8 million litres per year. The price of NGV is set at 50% of diesel oil, or about 40% of gasoline, and close to the retail price of LPG. PTT, in conjunction with the Department of Land Transport, organized the çSafe Driving, Traffic Disciplineé program, in which members of the public, both in Bangkok and in other provinces e.g. Lampang and Songkla, are trained in four classes a year, 150 persons per class.

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PTT Public Company Limited 36

Since 1986, PTT has sponsored the çPTT Art Contesté in co-operation with Silapakorn University. This annual event has become widely recognized among artists and young people who love art. Apart from running this event for the 16th consecutive year, PTT, together with Chiangmai University, was also behind a mobile exhibition of art works that included the artistic achievements of youth from seventeen provinces in Northern Thailand.

Educational Supports Since 1996 PTT has been supporting less privileged students with high academic performance at various schools in the vicinity of PTTûs terminals throughout Thailand. Each year, scholarships worth Baht 1 million are allocated to secondary schools and colleges students. Other educational assistance includes the construction of school buildings and libraries and supplies of school equipment, books, study materials for educational facilities for needy schools in remote areas of the country. Besides the foregoing, PTT supports education by means of its own exhibition on wheels, entitled çOpening Up the World of Natural Gasé. This exhibition contains numerous activities designed to enhance studentsû knowledge and understanding as a supplement to their ordinary curriculum. By way of implementing its social and environmental policies, PTT devised 5S activities for youth as a means to better discipline and enhance a greater commitment to society and the environment. This 5S program, the same practised inside the Company itself, was introduced as a training program to the schools surrounding PTT operational sites across the country. PTT has also organized two youth camps; namely, the çGeneration Pé Youth Camp for consciousness of energy resources, and the çThai Energy for Environmental Careé Camp. The students with outstanding environmental initiatives were chosen from schools all over Thailand to take part in studies and activities that would enhance awareness of energy conservation and the preservation of natural resources.

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Annual Report

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37 2001

Risk Factors

In addition to the usual risks in operating a business, some other risk factors need to be considered in the petroleum and petroleum-related industry. 1. Every Natural Gas Sales Contract Has a Take-or-Pay Condition. In every natural gas sales contract, there is a minimum quantity that PTT needs to purchase annually. In the event that the PTT cannot take the full amount of the minimum quantity stipulated, the PTT is required to pay for the natural gas not taken for that contracted year. However, PTT is entitled to take the pre-paid gas in subsequent years as a make-up. Consequently, the problems resulting from the requirement may affect the financial situation and the operation of the PTT. 2. Dependence on Primary Customer. Another risk factor lies in the fact that the PTT distributes most of its natural gas to EGAT, its primary customer. Although the quantity to be purchased and the fine penalties are stated in the contract, problems could occur should the customer was be unable to abide by the contract for any reason. 3. Financial Support for Companies in the Group. The domestic economic recession since 1997 has adversely affected the finance and the business operation of several companies in the group. The PTT has had to provide some financial support as obligated in accordance with their agreement. The risk then rises if associated companies fail to repay their debt obligation or have further financial difficulties which may require further assistance. 4. Product Price Fluctuation. The sale price for the products of PTT and itûs affiliates in both domestic and foreign markets reflect prices in the international market. High fluctuations in the world market certainly affect the PTTûs business operations. 5. Currency Exchange Fluctuations. Most of PTTûs income is tied to currency exchange rates and is thus affected by the fluctuations in these rates both directly and indirectly. This is because the natural gas and crude oil prices are pegged to the world market price, quoted in US dollars. 6. Natural Gas Pipelines System Development. The success of business expansion relies heavily on the expansion of the natural gas pipeline system in order to meet increasing demand. However, certain factors in development projects are not under PTTûs control. These include government approval, the study of a projectûs impact on the environment, the public hearing expense in order to meet the law and more stringent standards as well as relating to environment and safety. All these factors pose a considerable risk that projects may not be implemented as planned.

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PTT Public Company Limited 38

Connected Transaction

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Transactions from Sale and Purchase Agreements (1) Connected transaction between PTT and State-Owned Enterprises Type of Transaction According to the government policy, a resolution of the Cabinet on June 15, 1999 designated that for all government agencies and state enterprises wishing to purchase more than 10,000 litres of fuel or more, must purchase fuel from PTT alone. PTT has, accordingly, sold fuel to the state enterprises e.g. Electricity Generating Authority of Thailand, the Bangkok Mass Transit Authority, and the State Railways of Thailand. Should any agency fail to make payment for fuel, PTT shall be liable to charge interest on the sum unpaid. (2) Connected transaction between PTT and PTT Exploration and Production Public Co., Ltd. (PTTEP), a subsidiary of PTT Type of Transaction PTT has entered into a long term agreement to sell and purchase crude oil, natural gas, liquefied petroleum gas (cooking gas), condensate, and other petroleum products from PTTEP. The agreements take effect immediately upon PTTEPûs production of any of these. This contract has been in effect to date, and will continue to cover any quantity of products delivered until the expiry of conditions for production. PTTEP presently sells about 95% of its output to PTT. (3) Transactions between PTT and associated refineries, i.e. Thai Oil Co., Ltd. (TOCL), Rayong Refinery Co., Ltd. (RRC), Star Petroleum Refining Co., Ltd. (SPRC), and Bangchak Petroleum Public Co., Ltd. (BCP) Type of Transaction PTT has entered into feedstock supply and product offtake agreements with associated refineries, usually for an amount of the production capacity proportionate to our shares ownership in each refinery. The nature of each agreement may be summarized as follows: Summary of Agreement with TOCL PTT agrees to supply TOCL with crude oil and feedstock and purchase finished oil products from TOCL for 49.99% of the refineryûs Production capacity. Either party may terminate the agreement after its 13th year after completion date of debt restructuring, upon one yearûs prior written notice or by revocation of agreement in the event of a violation by the other party. PTT has also the right to offtake the product more than the allotted 49.99% of output at market prices. Summary of Agreement with RRC The shareholders of RRC are required to supply and purchase a minimum of 70% of refineryûs production from RRC. Pricing is domestic market based. With 36% equity interest in RRC, PTT has entered into 12-year agreement to purchase products from RRC commencing from the production start-up, after which the contract remains in effect unless prior notice is given. Summary of Agreement with SPRC With a 36% equity interest in SPRC, PTT agrees to supply crude oil and purchase products from Star Refinery not less than 36% of 88,200 barrels per day, at domestic market prices. PTT and Caltex Trading and Transport Corporation, the refineryûs controlling shareholders, have first rights of purchase of any output in excess of the above-mentioned amount, at domestic market prices, prior to offering to third parties.

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Annual Report 39 2001

(4) Transactions between PTT and associated petrochemical companies Type of Transaction and Summary of Agreement with Thai Olefins Co., Ltd. (TOC) PTT has entered into an agreement to supply feedstock to TOC i.e. natural gasoline for a period of 15 years, from 1995 to 2010; liquefied petroleum gas for a period of 15 years, from 1995 to 2010; and ethane for a period of 4 years from 2000 to 2004, with extensions allowed. PTT also serves as a clearing house. Under the agreement, should any customer fail to fulfil its commitments with TOC, PTT is obliged to take that amount, after which the customers must compensate costs and damages to PTT. The customer must also place a stand-by letter of credit with PTT as a guarantee. PTT receives a marketing fee of Baht 12 million per year from TOC for this service. Type of Transaction and Summary of Agreement with Aromatics (Thailand) Public Co., Ltd. (ATC) PTT has entered into a long-term agreement to supply feedstock to ATC; namely, condensate and naphtha. The 15-year agreement takes effect from 1993 to 2008. Another agreement with ATC is to purchase all its output, stipulating that ATC is to deliver its products directly to customers. With a take-or-pay obligation, PTT guarantees its purchase of a minimum volume of products and as a result, PTT has received a marketing fee of around US$8-10 million per year. Type of Transaction and Summary of Agreement with National Petrochemical Public Co., Ltd. (NPC) PTT has entered into an agreement to supply ethane, propane, and liquefied petroleum gas, to NPC for a period of 12 years, beginning in 1999, the agreement is renewable for up to five years. The price for these feedstock products which reflects sale price of NPC, is calculated on the basis of profit and loss sharing mechanism. NPC has, moreover, agreed to purchase fuel gas from PTT for electricity generation. The contract, which commenced in 1999, stipulated a delivery volume of 22 MMscfd for the first year, and 33 MMscfd for every year thereafter. The contract has a 20-year duration, and may be extended by another 4 years. Opinion of the Auditors Regarding Transactions between Related Companies In the opinion of the auditor, the above connected transactions are under commercial terms and conditions which are not involved in any advantage to either PTT or its subsidiaries, joint ventures, related companies, or shareholders. Insofar, however, as the loans and bonds of PTT are guaranteed by the Ministry of Finance, PTT does have access to loans at more favourable conditions. Pricing between PTT and related companies is also determined by the same factors that govern pricing between them and unrelated companies. Market rates likewise determine the prices paid by PTT to its subsidiaries. Policy regarding Future Transactions between Related Companies Future connected transactions between PTT and related companies will remain normal, unexceptional, and give no undue advantage to either PTT or its subsidiaries, joint ventures, related companies, or shareholders. Pricing between PTT and related companies will also be determined by the same factors that govern pricing between them and unrelated companies. Market rates will likewise determine the prices paid by PTT to its subsidiaries. Disclosure of transactions between related companies will strictly be in compliance with the rules and regulations of the Office of the Securities Exchange Commission and the Stock Exchange of Thailand and the standards for disclosure of information on transactions between related persons or businesses as specified by the Institute of Certified Accountant and Auditors of Thailand. Note: For details see page 85-87 of the Financial Statements.

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PTT Public Company Limited 40

Analysis on Operational and Financial Results in 2001 ○

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In Comparison With 2000

Operational Result In 2001, PTTûs net profit amounted to Baht 21.565 billion, up Baht 9.285 billion or 76% from 2000ûs net profit of Baht 12.280 billion. Revenues Our sales revenue increased by Baht 6.447 billion or 1.7% from Baht 371.455 billion in 2000 to Baht 377.902 billion in 2001. The increase was attributable primarily to a higher sales of natural gas, particularly to small power producers (SPPs) and independent power producers (IPPs). Other forms of income rose by Baht 1.428 billion or 35% from Baht 4.072 billion in 2000 to Baht 5.500 billion in 2001. The main components of this amount were compensation from loan interest of gas prepayment, interest incomes from loans given to Thai Olefins Co., Ltd. (TOC) and National Fertilizer Public Co., Ltd., (NFC) transportation and service incomes for aircraft refuelling, and unrealized gain from foreign currency translation, a result from a strengthening of Thai Baht against the Japanese yen. Expenses Cost of Sales In 2001 our cost of sales totalled Baht 322.388 billion, down Baht 1.724 billion or 0.5% from Baht 324.112 billion in 2000. Selling and Administrative Expenses Selling and administrative expenses rose by Baht 568 million from Baht 10.838 billion in 2000 to Baht 11.406 billion in 2001. Exploration and Production Expenses Exploration and production expenses rose by Baht 31 million or 15.4% from Baht 202 million in 2000 to Baht 233 million in 2001. Depreciation and Amortization Expenses Depreciation and amortization expenses rose by Baht 58 million or 1% from Baht 5.248 billion in 2000 to Baht 5.306 billion in 2001, due to a rise in depreciation expenses relating to the Ratchaburi-Wang Noi Pipeline and parallel gas pipeline projects. Impairment Losses Our impairment losses increased by Baht 1.177 billion or 872% from Baht 135 million in 2000 to Baht 1.312 billion in 2001. This was due to the allowances for impairment of investments, advance payments, and accrued interest from companies in the Group, as well as the allowances for loss on impairment of H2S Removal Plant in Nam Phong District. Interest Expenses PTTûs interest expenses increased by Baht 1.113 billion or 12% from Baht 9.513 billion in 2000 to Baht 10.626 billion in 2001. The reason for this was the issuance of Baht 19 billion bonds during 2001 and the record of loan interest of the natural gas pipeline from the Yadana field as well as the Ratchaburi-Wang Noi project. This was recorded as expenses upon the completion of construction.

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Annual Report 41 2001

Income Taxes Following the registration of PTT as a public company on October 1, 2001, PTT is subject to income tax. The incomes tax for PTT accounted during the period from October 1 - December 31, 2001 amounted to Baht 1.204 billion. When the income tax for PTTûs subsidiaries included, the total tax for 2001 amounted to Baht 6.929 billion, a rise of Baht 2.706 billion or 64% from Baht 4.223 billion in 2000. Share of net gain or loss of companies in the group In 2001, share of net loss of subsidiaries and associates amounted Baht 2.483 billion. This included share of net income of Baht 150 million from the operation of PTT Natural Gas Distribution Co., Ltd. (NGD), an associated company in the Gas Business Group, which was recognized as income during this fiscal year. Share of net loss from associated companies in the Petrochemical and Refining Business Groups, amounted Baht 650 million and Baht 1.983 billion, respectively. PTTûs share of net losses for 2001 declined by Baht 1.958 billion or 44% due to the recognition of net profit of NGD beginning in this fiscal year, and also due to a decrease of net losses of Star Petroleum Co., Ltd. (SPRC) and Aromatics (Thailand) Public Co., Ltd. (ATC). There was also a cessation of recognition of net loss from the operations of National Fertilizer Public Co., Ltd. (NFC) concurrent with the total absence of investment in the company as of the previous fiscal period, and the recognition of net loss of Rayong Refinery Co., Ltd. (RRC) during this period was only Baht 140 million. With regards to subsidiaries, a recognition of share of net loss in the companies in the group included Baht 82 million from Thai Oil Power Co., Ltd. (TOCL) and Baht 2 million from FST Aviation Services Limited, respectively. Income of minority interest in subsidiaries PTTûs income of minority interest in subsidiaries increased by Baht 2.222 billion or 109% from Baht 2.030 billion in 2000 to Baht 4.252 billion in 2001, due to an increase in the net income reported by PTT Exploration and Production Public Co., Ltd. (PTTEP). Financial Result As of December 31, 2001 the total assets of PTT amounted to Baht 291.216 billion, or Baht 61.362 billion higher than in 2000 as a result of an increase of PTTûs own investments both in that of its subsidiaries, and higher pre-paid payments under take or pay obligation for natural gas from the Yadana and Yetagun fields. These latter were recorded as costs for prepayment of natural gas from Myanmar, and increased by Baht 18.759 billion from 2000. As of December 31, 2001, most of PTTûs current assets were in the form of cash on hand and at bank, and short-term investments, namely treasury bills and promissory notes. Fixed assets were mainly in the form of property, plant, and equipment, investments in associated companies, and advance payments for the purchase of gas. PTTûs total liabilities as of December 31, 2001 amounted to Baht 221.090 billion, Baht 21.314 billion higher than in 2000. Most of this increase was due to an increase in trade accounts payable, a result of larger sale of natural gas and an increase in deferred income tax calculated from temporary differences between the carrying amounts of an asset or liability in the balance sheet and its tax base, a result of different depreciations calculations.

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PTT Public Company Limited 42

Organization Chart

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President

EVP PTT Research and Technology Institute

SEVP Corporate Strategy & Development

SEVP Corporate Finance & Accounting

EVP-Corporate Strategy & Planning

EVP-Corporate Finance

EVP-Information & Communication Technology Services Center

EVP Office of Corporate Audit

SEVP Corporate Support

SEVP Gas Business Group

SEVP Oil Business Group

EVP-Corporate Human Resources

EVP-Strategic Planning

EVP-Planning

Office of Corporate Legal

EVP-Project Management

EVP-Retail Marketing

EVP-Natural Gas Supply & Trading

EVP-Accounting & Finance EVP-Commercial Marketing

EVP-Natural Gas Transmission

EVP-Terminal Operations

EVP-Natural Gas Processing

EVP-International Business Development & Marketing EVP-International Trading EVP-Supply & Logistics

Note

SEVP Petrochemicals & Refining Business Group

EVP - Executive Vice President SEVP - Senior Executive Vice President

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Annual Report

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P T Tûs B o a r d O f D i r e c t o r s

(January 2002)

Mr. Manu Leopairote

Gen. Akaradej Sasiprapha

Chairman

Director

(%) Holding 0.010724 Qualification/Training ë B.Sc. Economics (Hons.), Thammasat University ë M.Sc. Economics, University of Kentucky, U.S.A. ë National Defense College (Class No. 34) Work Experience 1994-1999 ë Director - General, Department of Industrial Promotion, Ministry of Industry 1999-2001 ë Permanent secretary, Ministry of Industry ë Chairman of the Board, Petroleum Authority of Thailand Present ë Permanent secretary, Ministry of Industry ë Chairman of the Board, PTT Plc. ë Chairman of the Board, Small Industry Finance Corporation ë Chairman of the Board, PTTEP ë Chairman of the Board, Thai Oil Co., Ltd. ë Chairman of the Board, Thai Olefins Co., Ltd. ë Chairman of the Board, National Petrochemical Plc. ë Chairman of the Board, The Thai Cane and Sugar Corporation

(%) Holding No Qualification/Training ë B.Sc., (Royal Thai Army) Work Experience 1997-1998 ë Inspector General, Ministry of Defense 1998-2000 ë Deputy Permanent Secretary, Ministry of Defense 2000 ë Deputy Supreme Commander, Ministry of Defense 2000-2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Director of the Board, PTT Plc. ë Chairman of the Board, NEP Realty and Industry Plc. ë Chairman of the Board, Navanakorn Co., Ltd. ë Director of the Board, Mass Rapid Transit Authority of Thailand

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Pol. Gen. Sant Sarutanond Director Dr. Wissanu Krea-Ngam Director

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Mr. Manu Leopairote Chairman Gen. Akaradej Sasiprapha Director

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Petroleum Authority of Thailandûs Board of Directors in 2001

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43 2001

Mr. Chaiwat Wongwattanasan Director Mr. Sunthad Somchevita Director

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PTT Public Company Limited 44

Dr. Wissanu Krea-Ngam

Pol. Gen. Sant Sarutanond

Director

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Mr. Wisudhi Srisuphan Director Mr. Vicha Sappanukroh Director Mr. Chulchit Bunyaketu Director

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(%) Holding No Qualification/Training ë LL.B (1st class Honors), Thammasat University ë Barrister-at-law, Thai Bar Association ë LL.M., University of California, Berkeley, U.S.A. ë J.S.D., University of California, Berkeley, U.S.A. Work Experience 1992-2000 ë Senator 1993-Present ë Secretary-General to the Prime Minister, Office of the Prime Minister 1999-2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Director of the Board, PTT Plc. ë Member of Law Drafting Committee, Office of the Council of State ë Director of the Board, National Bank of Thailand ë Director of the Board, Thai Airways International Plc. ë Director of the Board, Thai Asset Management Corporation ë Distinguished Member of the Board, Office of the Civil Service Commission ë Distinguished Member of the Board, Royal Thai Police ë Distinguished Member of the Board, National Defense College Council ë Distinguished Member of the Board, Chiangmai University Council ë Distinguished Member of the Board, Mae Fah Luang University Council ë Distinguished Member of the Board, Songkla University Council

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Mr. Cherdpong Siriwit Director Dr. Thongchat Hongladaromp Director Mr. Pala Sookawesh Director

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(%) Holding No Qualification/Training ë Police Cadet Academy (Class No. 20) Work Experience 1996 ë Assistant Director-General, Royal Thai Police, Ministry of Interior 1997 ë Deputy Director-General, Royal Thai Police, Ministry of Interior 1998 ë Deputy Commissioner-General, Office of the Prime Minister 2000-2001 ë Director of the Board, Petroleum Authority of Thailand 2001-Present ë Commissioner-General, Office of the Prime Minister Present ë Director of the Board, PTT Plc. ë Director of the Board, Thai Airways International Plc. ë Director of the Board, Airports Authority of Thailand

Mr. Naris Chaiyasoot Director Mr. Sommai Khowkachaporn Director Mr. Viset Choopiban Director and Secretary

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Mr. Chaiwat Wongwattanasan Director and Chairman Audit Committee (%) Holding No Qualification/Training ë LL.B. (Hons.), Thammasat University ë Master of Civil Law, Tulane University, U.S.A. ë Master of Law, University of Michigan, U.S.A. Work Experience 1994-2000 ë Deputy Secretary General, Office of the Council of State 2000-Present ë Secretary General, Office of the Council of State 2000-2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Director and Chairman Audit Committee, PTT Plc. ë Director of the Board, Petchburi Assets Management Co., Ltd. ë Director of the Board, National Bank of Thailand ë Director of the Board, Government Pension Fund

Annual Report 45 2001

Mr. Cherdpong Siriwit Director (%) Holding No Qualification/Training ë B.Sc. Economics (Hons.), Thammasat University ë M.A. Economics, Georgetown University, U.S.A. Work Experience 1996 -1999 ë Director-General, The Office of Industrial Economics, Ministry of Industry 2000-2001 ë Director-General, Department of Mineral Resources, Ministry of Industry ë Director of the Board, Petroleum Authority of Thailand Present ë Secretary General, Thai Industrial Standards Institute, Ministry of Industry ë Director of the Board, PTT Plc. ë Chairman of the Executive Board, The Thai Cane and Sugar Corporation ë Chairman of the Board, National Fertilizer Plc. ë Chairman of the Board, Rayong Bulk Terminal Co., Ltd.

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PTT Public Company Limited 46

Mr. Wisudhi Srisuphan Director (%) Holding No Qualification/Training ë B.Eng. Civil Engineering, Chulalongkorn University ë LL.B. (Hons.), Ramkhamhaeng University ë M.E. (C.E.), Lamar University, U.S.A. ë M.A.A. Business Economics, Thammasat University ë National Defense College (Class No. 38) Work Experience 1990-1996 ë Deputy Director-General, The Treasury Department 1996-1997 ë Deputy Comptroller-General, The Comptroller General,s Department 1997-1999 ë Inspector General, Ministry of Finance 1999-Present ë Comptroller General, Ministry of Finance 2000-2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Director of the Board, PTT Plc. ë Chairman of the Board, Housing Bank

Mr. Sunthad Somchevita Director (%) Holding No Qualification/Training ë B.Arch. Architecture, Chulalongkorn University ë M.S. Tropical Architecture, Pratt Institute, Brooklyn, N.Y., U.S.A. Work Experience 1996-1998 ë Deputy Permanent Secretary, Ministry of Science, Technology and Environment 1998-Present ë Permanent Secretary, Ministry of Science, Technology and Environment 1998-2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Director of the Board, PTT Plc. ë Director of the Board, EGAT ë Civil Service Sub-Commission, Office of the Civil Service Commission ë Honorary Director, Council of Chulabhorn Research Institute ë Honorary Director, Council of Suranaree University of Technology ë Committee Member, Office of the Council of State ë Director of the Board, Thai Academy of Science and Technology Foundation ë Advisor to the Board, Cultural Environment Fund, Thailand: Environmental Institute ë Advisor to the Board, National Research Center for Environmental and Hazardous Waste Management, Environment Research Institute ë Honorary Advisor to the Board, Thai Foundrymen,s Society ë Advisor to the Board, Faculty of Engineering, Kasetsart University

○ ○ ○ ○ ○ ○ ○ ○

Mr. Chulchit Bunyaketu Director (%) Holding No Qualification/Training ë LL.B., Faculty of Political Science, Chulalongkorn University ë M.A. Political Science, Kent State University, U.S.A. ë National Defense College (Class No. 355) Work Experience 1994 ë Deputy Managing Director, Thai Oil Co., Ltd. 1998-Present ë Director of the Board and Managing Director, Thai Oil Co., Ltd. ë Managing Director, Thai Oil Power Co., Ltd. 1999-2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Director of the Board, PTT Plc. ë Director of the Board, Thai Lube Blending Co., Ltd. ë Director of the Board, Thai Lube Base Plc. ë Chairman of the Board, Thai Paraxylene Co., Ltd. ë Director of the Board, Independent Power (Thailand) Co., Ltd.

Annual Report 47 2001

Mr. Pala Sookawesh Director (%) Holding No Qualification/Training ë B.Eng. Electrical Engineering (Hons.), Chulalongkorn University ë M.S. Industrial Engineering (Operation Research), Oregon State University, U.S.A. ë National Defense College (Class No. 333) ë Cert. in Advanced Management Program, Harvard Business School, Harvard University U.S.A. Work Experience 1995-1999 ë Governor, Petroleum Authority of Thailand 1999-2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Director of the Board, PTT Plc. ë Honorary Director, Fuel Control Committee ë Director of the Board, Petroleum Committee, Ministry of Industry ë Chairman of the Board, ATC ë Director of the Board, PTTEP ë Director of the Board, EGAT ë Director of the Board, TOC ë Director and Audit Committee Member, Vinythai Plc. ë Advisor to Management Board, The Krungthep Thanakom Co., Ltd. ë Council of Trustees, Petroleum Institute of Thailand Foundation

○ ○ ○ ○ ○ ○ ○ ○

PTT Public Company Limited 48

Dr. Olarn Chaipravat Director and Audit Committee Member (%) Holding No Qualification/Training ë B.S. (Magna Cum Lande), Economics, Wharton School, University of Pennsylvania, U.S.A. ë Ph.D. Economics, Massachusetts Institute of Technology (M.I.T.), U.S.A. Work Experience 1992-1999 ë President, The Siam Commercial Bank Plc. 1999-Present ë Director and Advisor to Management Board, The Siam Commercial Bank Plc. 2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Director and Audit Committee Member, PTT Plc.

Dr. Pisanu Sunthraraks Independent Director (%) Holding No Qualification/Training ë Ph.D. Political Science, University of Wisconsin - Madison, U.S.A. Work Experience 1997-1998 ë Advisor to the Minister of Industry, Ministry of Industry 1997-Present ë National Industrial Development Committee Member, Ministry of Industry ë Member, National Food Industry, Ministry of Industry ë Member, Thailand Productivity Institute, Ministry of Industry 2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Independent Director, PTT Plc.

○ ○ ○ ○ ○ ○ ○ ○

Annual Report 49 2001

Mr. Chakrawut Salayabongs

Dr. Chongrak Rarueysong

Independent Director

Independent Director and Audit Committee Member

(%) Holding No Qualification/Training ë B.Eng., Kasetsart University ë B.B.A. Construction Management, Sukhothai Thammathirat Open University Work Experience 1994-1997 ë Senior Engineer, Keen Consultant Co., Ltd. 1997-2001 ë Senior Engineer & Management Consultant, Inter Engineering Management Co., Ltd. 2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Independent Director, PTT Plc. ë Director of the Board, PTTEP ë Director fo the Board, ATC ë Advisor to the Board, Mass Rapid Transit Authority of Thailand

(%) Holding No Qualification/Training ë B.Sc. Economics (Hons.), Thammasat University ë Ph.D. Economics, University of Illinois at Urbana-Champaign, U.S.A. Work Experience 1995-1996 ë President, Vajira Dhanadhun Securities Co., Ltd. 1996-Present ë President, Association of Securities Companies (ASCO) 1998-Present ë Director of the Board, Thai Rating and Information Services Co., Ltd. 1998-Present ë Executive Director, TSFC Securities Co., Ltd. 2001 ë Director of the Board, Petroleum Authority of Thailand Present ë Independent Director and Audit Committee Member, PTT Plc. ë Director of the Board, Krungthai Computer Services Co., Ltd.

○ ○ ○ ○ ○ ○ ○ ○

PTT Public Company Limited 50

Mr. Viset Choopiban Director and Secretary (%) Holding 0.005766 Qualification/Training ë B.Eng. Electrical Engineering, Chulalongkorn University ë M.Eng. Electrical Engineering, Chulalongkorn University ë Petroleum Management Course, ADL, U.S.A. ë Petroleum Management Workshop, College of Petroleum Studies, Oxford, UK ë National Defense College (Class No. 388) Work Experience 1996-1999 ë Executive Director, Downstream Oil Sector Group and President, PTT International, Petroleum Authority of Thailand 1999-2001 ë Governor, Petroleum Authority of Thailand Present ë Director and President, PTT Plc. ë Chairman of the Board of Directors, Thai Petroleum Pipeline Co., Ltd. ë Chairman of the Board of Directors, Independent Power (Thailand) Co., Ltd. ë First Vice Chairman, National Petrochemical Plc. (NPC) ë Vice Chairman Board of Directors, Bank Thai Plc. ë Chairman of the Board of Directors, PTT Natural Gas Distribution Co., Ltd. ë Member of Council of Trustees, The Petroleum Institute of Thailand

○ ○ ○ ○ ○ ○ ○ ○

Annual Report 51 2001

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PTT Public Company Limited 52

P T T ûs E x e c u t i v e

○

Mr. Viset Choopiban President (%) Holding 0.005766 Qualification/Training ë B.Eng. Electrical Engineering, Chulalongkorn University ë M.Eng. Electrical Engineering, Chulalongkorn University ë Petroleum Management Course, ADL, U.S.A. ë Petroleum Management Workshop, College of Petroleum Studies, Oxford, UK ë National Defense College (Class No. 388) Work Experience 1996-1999 ë Executive Director, Downstream Oil Sector Group and President, PTT International, Petroleum Authority of Thailand 1999-2001 ë Governor, Petroleum Authority of Thailand Present ë Director and President, PTT Plc. ë Chairman of the Board of Directors, Thai Petroleum Pipeline Co., Ltd. ë Chairman of the Board of Directors, Independent Power (Thailand) Co., Ltd. ë First Vice Chairman, National Petrochemical Plc. (NPC) ë Vice Chairman Board of Directors, Bank Thai Plc. ë Chairman of the Board of Directors, PTT Natural Gas Distribution Co., Ltd. ë Member of Council of Trustees, The Petroleum Institute of Thailand

○

Dr. Prajya Phinyawat Senior Executive Vice President, Corporate Strategy and Development (%) Holding 0.003645 Qualification/Training ë B.Eng. Civil Engineering, Chulalongkorn University ë M.Eng. Civil Engineering, Stanford University, U.S.A. ë Ph.D. (Civil Engineering), University of Texas at Austin, U.S.A. Work Experience 1996-1999 ë President, PTT Exploration and Production Plc. (PTTEP) 1999-2001 ë Deputy Governor, Corporate Plan and Development, Petroleum Authority of Thailand 2001 ë Deputy Governor, Corporate Strategy & Development, Petroleum Authority of Thailand Present ë Senior Executive Vice President, Corporate Strategy and Development, PTT Plc. ë Director of the Board, Rayong Refinery Co., Ltd. (RRC) ë Director of the Board, National Fertilizer Co., Ltd. (NFC) ë Director of the Board, Star Petroleum Refining Co., Ltd. (SPRC)

○

○ ○ ○ ○ ○ ○ ○ ○

Mr. Pichai Chunhavajira Senior Executive Vice President, Corporate Finance and Accounting (%) Holding 0.010697 Qualification/Training ë B.A. Accounting, Thammasat University ë M.B.A. Business Administration, Indiana University of Pennsylvania, U.S.A. Work Experience 1996-1999 ë Deputy Governor, Finance, Petroleum Authority of Thailand 1999-2001 ë President, Oil Business Group, Petroleum Authority of Thailand ë Acting President, PTT International, Petroleum Authority of Thailand ë Acting Deputy Governor, Finance, Petroleum Authority of Thailand 2001 ë Deputy Governor, Corporate Finance & Accounting, Petroleum Authority of Thailand Present ë Senior Executive Vice President, Corporate Finance and Accounting, PTT Plc. ë Director of the Board, Dhipaya Insurance Plc. ë Director of the board, Bangchak Petroleum Plc. ë Director of the Board, ATC ë Director of the Board, PTT Mart Co., Ltd. ë Director of the Board, Thai Oil Co., Ltd. ë Director of the Board, Thai Oil Power Co., Ltd. ë Director of the Board, PTTEP ë Deputy Director, PetroAsia (Shantou) Co., Ltd. ë Director of the Board, PetroAsia (Maoming) Co., Ltd. ë Director of the Board, Thai Petroleum Pipeline Co., Ltd. ë President, Alumni & Association of Faculty of Commerce and Accountancy, Thammasat University

Annual Report 53 2001

Mr. Adul Leelapatranurak Senior Executive Vice President, Corporate Support (%) Holding 0.003181 Qualification/Training ë B.Eng. Civil Engineering (Hons.), Chulalongkorn University ë M.S. Civil Engineering (Hydraulics), Colorado State University, U.S.A. ë Cert. in Advanced Management Program, Harvard Business School, Harvard University, U.S.A. Work Experience 1996-2001 ë Executive Director, Refining Business Group, Petroleum Authority of Thailand 2001 ë Deputy Director, Corporate Human Resources and Administration, Petroleum Authority of Thailand Present ë Senior Executive Vice President, Corporate Support, PTT Plc.

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PTT Public Company Limited 54

Mr. Prasert Bunsumpun Senior Executive Vice President, Gas Business Group (%) Holding 0.003532 Qualification/Training ë B.Eng. Civil Engineering, Chulalongkorn University ë M.B.A. Utah State University, U.S.A. ë National Defense College (Class No. 4010) ë Cert. in Advanced Management Program, Harvard Business School, Harvard University, U.S.A. Work Experience 1996-1999 ë President, Oil Business Group Petroleum Authority of Thailand 1999-2001 ë President, Gas Business Group Petroleum Authority of Thailand Present ë Senior Executive Vice President, Gas Business Group, PTT Plc. ë Director of the Board, Bangchak Petroleum Plc. ë Director of the Board, PTT Natural Gas Distribution Co., Ltd. ë Director of the Board, PTTEP ë Director of the Board, Trans Thai-Malaysia (Thailand) Co., Ltd.

Mr. Apisit Rujikeatkamjorn Senior Executive Vice President, Oil Business Group (%) Holding 0.002795 Qualification/Training ë B.Eng. Civil Engineering, Khonkaen University ë M.Eng. Civil Engineering, Lamar University, U.S.A. Work Experience 1996-1997 ë Senior Assistant Governor, Office of the Governor, Petroleum Authority of Thailand 1997-1999 ë Senior Assistant Governor, Office of the Governor, appointed as Senior Vice President, Star Petroleum Refining Co., Ltd. 1999-2000 ë Senior Assistant Governor, Petroleum Authority of Thailand 2001 ë President, Oil Business Group, Petroleum Authority of Thailand Present ë Senior Executive Vice President, Oil Business Group, PTT Plc. ë Chairman of the Board, PTT Philippines, Inc. ë Director and Chief Executive Officer, Trans Thai-Malaysia (Thailand) Co., Ltd. ë Director of the Board, Fuel Pipeline Transportation Co., Ltd. ë Director of the Board, Subic Bay Energy Co., Ltd. ë Director of the Board, Subic Bay Fuels Co., Ltd. ë Director of the Board, Subic Bay Distribution, Inc. ë Director of the Board, Clark Pipeline & Depot Company, Inc. ë Director of the Board, Independent Power (Thailand) Co., Ltd.

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Dr. Piti Yimprasert Senior Executive Vice President, Petrochemicals and Refining Business Group (%) Holding 0.003532 Qualification/Training ë B.Eng. Civil Engineering, Chulalongkorn University ë M.Eng. Civil Engineering, University of Texas at Austin, U.S.A. ë Ph.D. (Civil Engineering), University of Texas at Austin, U.S.A. ë National Defense College (Class No. 399) Work Experience 1996-2000 ë President, Gas Business Group, Petroleum Authority of Thailand 2000-2001 ë Executive Director, Petrochemicals Sector Group, Petroleum Authority of Thailand 2001 ë President, Petrochemical & Refinery Business Group, Petroleum Authority of Thailand Present ë Senior Executive Vice President, Petrochemicals and Refining Business Group, PTT Plc. ë Director of the Board, Thai Paraxylene Co., Ltd. ë Director of the Board, NPC ë Director of the Board, ATC

Annual Report 55 2001

Dr. Chitrapongse Kwangsukstith Senior Executive Vice President Appointed as President of PTTEP (%) Holding 0.004205 Qualification/Training ë B.Eng. Mechanical Engineering, Chulalongkorn University ë M.Eng. Industrial Engineering, Lamar University, U.S.A. ë Ph.D. (Industrial Engineering), Lamar University, U.S.A. Work Experience 1996-2001 ë Deputy Governor, Corporate Plan and Development, Petroleum Authority of Thailand Present ë Senior Executive Vice President, PTT Plc. ë Director and President, PTTEP ë Director of the Board, Thai Oil Power Co., Ltd.

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PTT Public Company Limited 56

Mr. Paibulya Punyavutti Senior Executive Vice President Appointed as President, ATC (%) Holding 0.002804 Qualification/Training ë B.Sc. Chemical Engineering, Chulalongkorn University Work Experience 1996-1997 ë Senior Vice President, Administration, ATC 1997-1998 ë Executive Vice President, ATC 1999-2001 ë Deputy Governor, Petroleum Authority of Thailand Present ë Senior Executive Vice President, PTT Plc. ë Director and President, ATC ë Chairman of the Board, Rayong Petrochemical Corporation Co., Ltd.

Dr. Viroj Mavichak Senior Executive Vice President Appointed as President, NPC (%) Holding 0.003645 Qualification/Training ë B.Eng. Civil Engineering, Chulalongkorn University ë M.Eng. Civil Engineering, University of Texas, U.S.A. ë Ph.D. (Civil Engineering), University of Texas, U.S.A. Work Experience 1996-1998 ë Executive Director, Petrochemical Sector Group, Petroleum Authority of Thailand 1998-2001 ë Deputy Governor, Petroleum Authority of Thailand ë Director and President, NPC Present ë Senior Executive Vice President, PTT Plc. ë Director and President, NPC ë Director of the Board, TOC ë Director of the Board, Thai Tank Terminal Limited ë Member of Council of Trustees, The Petroleum Institute of Thailand ë Director, Thailand Business Council for Sustainable Development ë Director, Petroleum Institute of Thailand (PTIT)

8. 9. 10. 11. 12. 13. 14.

1. PTT Exploration and Production Plc. 2. PTT Philippines Inc. 3. Thai Oil Co., Ltd. 4. Bangchak Petroleum Plc. 5. Rayong Refinery Co., Ltd. 6. Star Petroleum Refining Co., Ltd. 7. Thai Lube Base Co., Ltd.

/ /

/ XX

15. 16. 17. 18. 19. 20. 21.

/ / XX XX = President

Thai Petroleum Pipeline Co., Ltd. Aromatics (Thailand) Plc. Thai Olefins Co., Ltd. National Petrochemical Plc. National Fertilizer Plc. PTT Natural Gas Distribution Co., Ltd. Trans Thai-Malaysia (Thailand) Co., Ltd.

/ XX

X = Chairman

Associates and Related Companies

/ = Director

/ / XX

// = Executive

Trans Thai-Malaysia (Malaysia) Co., Ltd. Thai Lube Blending Co., Ltd. PetroAsia (Thailand) Co., Ltd. Vietnam LPG Co., Ltd. Three Companies under PetroAsia Four Companies under Subic Bay PTT Mart Co., Ltd.

22. 23. 24. 25. 26. 27. 28.

Keloil-PTT LPG Sdn. Bhd. PTT International Trading Pte Ltd. Thai Paraxylene Co., Ltd. Bangkok Aviation Fuel Services Plc. Fuel Pipeline Transportation Co., Ltd. Intoplane Services Co., Ltd. Dhipaya Insurance Plc.

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 X X

/ XX

3 X

1 X

Subsidiaries

Note 2 No. 19 Three Companies under PetroAsia are PetroAsia Sanshui, Huizhou and Shantou Note 3 No. 20 Four Companies under Subic Bay are Subic Bay Energy Co., Ltd., Subic Bay Fuels Company Inc., Subic Bay Distribution, Inc., Clark Pipeline and Depot Company, Inc. Note 4 This table is excluded Thai Oil Power Co., Ltd. and New Links Energy Resources Co., Ltd. (New Links) (TOP) which are the subsidiaries of PTTEP

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

X / / / / / / / / / / / / / / XX // // // // // // // // // Note

PTT Plc.

Mr. Manu Leopairote Gen. Akaradej Sasiprapha Pol. Gen. Sant Sarutanond Dr. Wissanu Krea-Ngam Mr. Chaiwat Wongwattanasan Mr. Cherdpong Siriwit Mr. Wisudhi Srisuphan Mr. Sunthad Somchevita Mr. Chulchit Bunyaketu Mr. Pala Sookawesh Dr. Olarn Chaipravat Dr. Pisanu Sunthraraks Mr. Chakrawut Salyabongs Dr. Chongrak Rarueysong Mr. Viset Choopiban Dr. Prajya Phinyawat Mr. Pichai Chunhavajira Mr. Adul Leelapattanurak Mr. Prasert Bunsumpun Mr. Apisit Rujikeatkamjorn Dr. Piti Yimprasert Dr. Chitrapongse Kwangsukstith Mr. Paibulya Punyavutti Dr. Viroj Mavichak

Name

Details of Board of Directors and Management of PTT, Subsidiaries, Associates and Related Companies as of December 31/2001

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57 2001

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Annual Report

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PTT Public Company Limited 58

Management

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Top 10 shareholders Following is the list of top 10 shareholders of PTT as of December 3rd, 2001, on the date that paid up capital of PTT was increased to Baht 27,972,457,250, the list was also recorded in a report of tender offer result (Form 81-1) to the Office of the Securities and Exchange Commission on January 10th, 2002. Rank 1. 2.

3. 4. 5. 6. 7. 8. 9. 10.

List of Shareholders Ministry of Finance Merrill Lynch (Singapore) Pte., Ltd. Merrill Lynch, Pierce, Fenner & Smith Incorporated Merrill Lynch Far East Limited Social Security Office Government Pension Fund American International Assurance Co., Ltd. Dhipaya Insurance Public Company Limited Krung Thai Bank Public Company Limited Mr. Taweechatra Chulangkul Mr. Prayut Mahakijsiri

No. of Shares 1,937,793,600 139,800,000 139,800,000

% of Total shares 69.27 4.99 4.99

49,400,000 17,140,000 15,000,000 9,100,000 8,979,000 3,000,000 2,200,000 2,060,000

1.70 0.61 0.53 0.32 0.32 0.10 0.07 0.07

The Companyûs Board of Directors As of December 31, 2001, PTTûs Board of Directors consisted of fifteen persons, namely: Name 1. Mr. Manu Leopairote 2. General Akaradej Sasiprapha 3. Police General Sant Sarutanond 4. Dr. Wissanu Krea-Ngam 5. Mr. Chaiwat Wongwattanasan 6. Mr. Cherdpong Siriwit 7. Mr. Wisudhi Srisuphan 8. Mr. Santhad Somchevita 9. Mr. Chulchit Bunyaketu 10. Mr. Pala Sookawesh 11. Dr. Olarn Chaipravat 12. Dr. Pisanu Sunthraraks 13. Mr. Chakrawut Salayabongs 14. Dr. Chongrak Rarueysong 15. Mr. Viset Choopiban

Position Chairman Director Director Director Director Director Director Director Director Director Director Independent Director Independent Director Independent Director Director and Secretary

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Annual Report 59 2001

Directors Authorized to Sign on behalf of the Company The directors whose signatures are recognized as binding on the Company are: (1) Mr. Viset Choopiban, authorized to sign and affix the Companyûs seal, or (2) any two other directors, authorized to sign together and affix the Companyûs seal. Formation and Appointment of the Board of Directors The formation, selection, appointment, removal, and expiration of Company directors have been defined in the Articles of Association of Company, which can be summarized as follows: 1. The Company shall have a Board of Directors which consists of at least five (5) persons but not more than fifteen (15) persons elected by a meeting of shareholders of the Company. The Board shall be comprised of at least three (3) independent directors, provided that at least half (1/2) of the Directors shall reside within the Kingdom of Thailand. The Directors shall have qualifications as specified by laws and by these Articles of the Company. At least one (1) of the Directors shall be expert in the area of accounting and finance. 2. The directors shall be elected by the shareholdersû meeting under the following rules and procedures: (1) Each shareholder shall have one vote per share held by him/her (2) Each shareholder shall exercise all votes applicable under one (1) in electing one (1) or more persons to be a director, but provided that no vote shall be divisible. (3) Any candidates who have the most votes shall be elected as directors equivalent to the number of directors required; if two (2) candidates have equal votes, the Chairman shall have a casting vote. 3. At every Annual General Meeting, one-third (1/3) of the directors, or, if their number is not divided by three (3), then the number nearest to one-third (1/3) shall retire from office in the first year. The second year following the establishment of the Company, the retiring directors shall be drawn by lots. In the third year and subsequent years, the directors who have been longest in office shall retire. 4. Any director who wishes to resign from his office shall submit a resignation letter to the Company. The resignation shall be effective on the date the notice reaches the Company. 5. In voting for the removal any director from office prior to retirement as a result of the expiration of the Directorûs term of office, a three-quarter (3/4) vote of any shareholders with an aggregate number of up to half (1/2) of all shares held by the shareholders present and eligible to vote shall be required. Scope of Duties and Responsibilities of the Board of Directors According to the Articles of Association of the Company, the Board has the power and duty to manage the Company in compliance with the Laws Companyûs objectives, the Articles of Association, and the resolutions of the shareholdersû meetings with loyalty, morals, and good corporate governance. The Board shall also carefully preserve the interests of the Company and its shareholders. The Board may assign one (1) director to be a Chairman and may assign one (1) director or several directors to be vice chairman where it is appropriate and assign one (1) director to be the President as well as the secretary to the board.

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PTT Public Company Limited 60

Powers and Duties of the President According to the Articles of Association of the Company, the President shall have the full powers and authorities to administer the Companyûs business strictly in accordance with the Companyûs plan or budget approved by the Board in good faith with the utmost care to preserve the interests of the Company and shareholders. The President also has the full powers and authorities in these following businesses: 1. Manage and/or operate day-to-day business of the Company. 2. Hire, appoint, remove, transfer, promote, demote, reduce the salary or wages of, take disciplinary action against, and dismiss any staff or employees as specified by the Boardûs regulations, except that the dismissal of any department heads or other higher positions shall require the prior approval of the Board. 3. Prepare and submit the Companyûs business plan, policy and budget to the Board for its approval, and report the progress of the approved plan and budget to the Board every three (3) months. 4. Manage and/or operate the business according to the approved policy, plan, and budget. In addition to the above, the Companyûs Board of Directors has conferred the following powers upon the President as representative of the Company with condition and scope as follows: 1. To administer the affairs of the Company according to the objectives and the Articles of Association, policies, regulations, directives, orders, and resolution of the Board of Directors and/or meetings of shareholders of the Company. 2. To order, contact, command, administer, and to sign legal instruments, contracts, documents, directives, announcements, and other documents required for dealing with government bodies, state enterprise, and other juristic persons, and to do whatever else is necessary or appropriate to ensure the performance of clause 1. 3. To command, recruit, appoint, dismiss, promote, demote, reduce the salary or wages, impose disciplinary punishment upon employees including dismissal of employees in accordance with the regulations or directives, or order laid down by the Board of Directors except where the employee concerned holds the rank of an adviser, expert, vice president or other person holding equal rank or upwards, a prior approval of the Board of Directors shall be required for said purpose. The President is also authorized to determine their conditions of employment and to issue rules for corporate work procedures insofar as these do not conflict with the rules, regulations, or directives of the Board of Directors. 4. To appoint subordinate attorney and/or delegate specific powers to other persons insofar as such appointment and/or powers fall within the scope of what has been described in this summary and/or are in accordance with the rules, regulations, and directives of the Board of Directors and/or the Company. The above mentioned authority of the President shall be invalid if the President has wasted interest or any conflict of interest with any form with the Company. Connected Transactions or the Acquisition or Disposal of Assets If the Company of any of its subsidiary companies (more than 50 percent of its paid up capital is directly or indirectly held by the Company) enters into any connected transaction or acquisition or disposal of the substantial assets of the Company subject to the rules of the Stock Exchange of Thailand, the Company shall comply with the relevant rules.

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Annual Report 61 2001

If the Company is obliged to requested of the shareholders in relation to the entry into any connected transactions or any acquisition or disposal of the Companyûs substantial assets, the shareholdersû resolution shall be approved by a three-quarter (3/4) vote of all shareholders present in person or by proxy and eligible to vote, provided that no votes given by any interested person shall be counted. Policies and Methods of Supervising Management in the Use of Internal Information for Personal Benefit Directive no.1/2544 of the Board of Directors of PTT mentions the use of internal information for personal interest, as follows: çTo prevent the pursuit of personal interest from the use of internal information that has not been publicly disclosed by PTT Public Co., Ltd., which information may mislead investors and cause unjustified movements in the price and trading volume of the firmûs securities, the Board of Directors of PTT Public Co., Ltd., has therefore passed resolution no. 1/2544 on October 1, 2001 prohibiting directors, managers, employees, and contracted workers, as well as their spouses and under-age children from using such information which has not yet been publicy disclosed for the purpose of buying, selling, transferring, or accepting the transfer of the Companyûs securities prior to such information being publicly disclosed. Violators shall be penalized according to the rules and regulations of the Company.é This directive became effective on October 1, 2001. The Audit Committee At meeting 1/2544 of the Board of Directors of PTT on October 1, 2001, the qualifications for a board of auditors were determined. The auditors must be directors of the Company, appointed by the Board of Directors, and in compliance with rules and regulations and of the Stock Exchange of Thailand. The committee shall has not less than Three (3) members and comprise at least one (1) individual with a knowledge of accounting and finance. At this same meeting, a resolution was passed to appoint three (3) individuals to the Board of Auditors, namely: Name 1. Mr. Chaiwat Wongwattanasan 2. Dr. Olarn Chaipravat 3. Dr. Chongrak Rarueysong

Position Chairman Auditor Auditor

At the same meeting, Mr. Trakul Chatdarong, Executive Vice President, the Internal Audit Office, was unanimously appointed as the Secretary of the Board of Auditors. The Scope of Responsibilities of The Audit Committee 1. To review the companyûs financial reporting process to ensure accuracy and adequacy. 2. To ensure that the company has suitable and efficient internal control system and internal audit. 3. To review the performance of the Company to ensure compliance with the securities and exchange laws, regulations of the Exchange or laws relating to business of the Company. 4. To consider, select, nominate, and recommend remuneration of the Companyûs external auditor. 5. To review the disclosure of information of the Company in case that there is a connected transaction or transaction that may lead to conflict of interest so as to ensure the accurateness and completeness.

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PTT Public Company Limited 62

6. To prepare a report on monitoring activities of The Audit Committee and disclose it in an annual report of the company, and have such report signed by the chairman of The Audit Committee. 7. To perform any other act as assigned by the board of directors with approval of The Audit Committee. 8. To perform any other act as designated according to the Articles of Association of the Company. The Nominating Committee At meeting 1/2544 of the Board of Directors of PTT on October 1, 2001, the qualifications for a nominating committee were determined. The committee members must consist of not less than three (3) members, and at least one independent director. At this same meeting a resolution was passed to appoint three (3) individuals to the Nominating Committee, namely: Name 1. Police General Sant Sarutanond 2. Mr. Cherdpong Siriwit 3. Mr. Chakrawut Salayabongs

Position Chairman Director Director

The Scope of Duties and Responsibilities Assigned to the Nominating Committee 1. To select appropriate individuals to fill the positions of new the Company Directors or of President. 2. To determine the method and principles of selection of the Company Directors or of the President, for the sake of transparency. The Remuneration Committee At meeting 1/2544 of the Board of Directors of PTT on October 1, 2001, the qualifications for a remuneration committee were determined. The committee members must be directors of the Company, appointed by the Board of Directors, number at least three (3) persons, and comprise at least one (1) independent director. At this same meeting a resolution was passed to appoint three (3) individuals to the Remuneration Committee, namely: Name 1. General Akaradej Sasiprapha 2. Mr. Chulchit Bunyaketu 3. Dr. Pisanu Sunthraraks

Position Chairman Director Director

The Scope of Duties and Responsibilities Assigned to the Remuneration Committee 1. To consider the approach to be taken in determining remuneration for Directors and the President. 2. To determine the method and principles of determining remuneration for Directors and the President, for the sake of fairness and reasonableness, and to submit proposals to a meeting of shareholders for their approval. Management The management of PTT shall follow the guideline presently imposed by following ten (10) committees. 1. PTT Management Committee : PTTMC 2. Oil Business Group Management Committee : OBMC

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Annual Report

3. 4. 5. 6. 7. 8. 9. 10.

63 2001

Gas Business Group Management Committee : GBMC Petrochemical & Refinery Business Group Management Committee : PRMC Corporate Plan Committee : CPC Corporate Finance & Accounting Committee : FAC Corporate Human Resources Committee : HRC PTT Credit Committee Supply Chain Management Committee : SCMC R & TI Board of Management Committee : RTBM

Names and Curriculum Vitae of Management (see page 43-57) Additional Data Regarding the Board of Directors and the Management of the Company are as Follows: Individuals with any of the following records during the past ten years: (1) Judged to have committed a crime, or involved as a defendant in criminal proceedings, except for traffic violations, petty offences, or infringements of a similar nature. (2) Judged to be bankrupt or in receivership. (3) The manager or official responsible in a company or limited partnership which was judged to be bankrupt or in receivership. Corporate Governance The Board of Directors and the Board of Auditors have monitored the operations of PTT according to the Code of Best Practices, the guidelines of the Stock Exchange of Thailand, and the Companyûs own rules and regulations. Remuneration for Management (1) Remuneration for PTTûs Board of Directors Unit: Baht Remuneration Bonuses Meeting Fees Total

2000 2001 No. of Persons Remuneration No. of Persons Remuneration 15 2,743,704.11 15 3,404,687.52 15 722,100.00 15 2,060,000.00 3,465,804.11 5,464,687.52

(2) Remuneration for PTTûs Management ( excluding secondment ) Unit: Baht Remuneration Total Salaries Total Bonuses Total

2000 2001 No. of Persons Remuneration No. of Persons Remuneration 6 23,345,640.00 7 27,714,932.00 6 7,704,061.20 7 9,719,777.48 31,049,701.20 37,434,709.48

(3) Pension Funds for PTTûs Directors and Management Unit: Baht Remuneration Pension Funds Total

2000 2001 No. of Persons Remuneration No. of Persons Remuneration 6 2,334,564.00 7 2,771,493.20 2,334,564.00 2,771,493.20

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PTT Public Company Limited 64

Personnel All employees and employees on probation including the top management of PTT to PTT Plc. would receive salaries, wages and fringe benefits in the amount which are not less than what they currently receive. Their working period with PTT shall be deemed to be their working period with PTT Plc. with continuous effect and it shall not be considered that the transformation of PTT to PTT Plc. results in the termination of their employment. In addition, the existing provident fund and pension fund for PTTûs employees who shall be transferred to PTT Plc. shall continue with PTT Plc., considered as the employer in lieu of PTT. (1) The number of employees, according to the main operational divisions of the organization, as of December 31, 2001 were as follows: Main Operational Division No. of Persons 1. Natural Gas 784 2. Oil 1,529 3. Supporting Units 844 4. Subsidiaries and Joint Ventures 711 Total 3,868 (2) Remuneration for personnel (not including management, secondment and the board of directors) Remuneration Total salaries Total bonuses Pension Funds Others (if present) Total

2000 1,524,703,925.51 501,103,045.32 148,494,188.19 493,370,189.99 2,667,671,349.01

Unit : baht 2001 1,590,700,462.95 516,985,264.63 156,765,105.93 497,884,194.99 2,762,335,028.50

(3) Other Forms of Remuneration PTT allotted 47,245,725 new common shares from an increase in capital for all employees, employees on probation, senior executives of PTT, personnel who resigned from PTT as part of the second çMutual Separation Plané for 2001, and retirees from PTT in 2001, with a value of 10 baht per share. The purpose of this program was to give employees a sense of ownership and foster a commitment to developing the organization together. If any shares are left over from the aforementioned allotment. A condition of this allotment is that recipients are prohibited from selling their shares for three years, except that they may sell one-third (1/3) of their shares each year after the first year of ownership. (4) Human Resources Development As employees are a key to companyûs success, PTT has a strong determination to support development of all levels and all departments of employees continuously with a view to achieve its mission to excel in energy and petroleum business on a par with international corporations. In addition, it has also placed an emphasis on adoption of good corporate governance, strategic cost leadership program as well as efficiency enhancement for more flexibility to cope with tougher competition at an international level and in the meantime, rendering the utmost benefits to shareholders and stakeholders. As well, PTT is determined to create corporate culture that enables to encourage personnel to possess required working attitude and behavior.

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Annual Report 65 2001

○ ○ ○ ○ ○ ○ ○ ○

PTT Public Company Limited 66

(translation)

Report of Independent Auditor ○

○

To : The Shareholders of PTT Public Company Limited The State Audit Office has audited the accompanying consolidated and the Company balance sheets of PTT Public Company limited and its subsidiaries as at December 31, 2001, the related consolidated , and the Company statements of income, changes in shareholders equity and cash flows for the three-month period ended December 31, 2001. These financial statements are the responsibility of PTT Public Company Limited s management as to their correctness and completeness of the presentation. The responsibility, of the State Audit Office is to express an opinion on these financial statements based on the audits of the State Audit Office and other auditorsû reports. Other auditors have audited the financial statements of PTT Philippines, Inc., PTT International Trading Pte. Ltd. and the joint venture projects which are jointly invested between PTT Exploration and Production Public Company limited and other companies. These three companies are subsidiaries that are included in the consolidated financial statements. The State Audit Office received audit reports of other auditors and used them as a basis in auditing and expressing an opinion on the consolidated and the Company financial statements. As at December 31, 2001, assets of two subsidiaries and the joint venture projects of the above subsidiary included in the consolidated financial statements constitute 19.46%. The State Audit Office conducted the audits in accordance with generally accepted auditing standards. Those standards require that the State Audit Office plans and performs the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. The State Audit Office , believes that the audits and the other auditor s report as stated in the above paragraph concludes the reasonable standard to express the opinion of the State Audit Office. In the opinion of the State Audit Office, based on its audits and the other auditors reports, the consolidated and the Company financial statements referred to above present fairly, in all material respects, the consolidated and the Company financial position of PTT Public Company limited and its subsidiaries as at December 31, 2001, the results of the consolidated and the Company operations, changes , in the consolidated and the Company shareholders equity and the consolidated and the Company cash flows for the three-month period ended December 31, 2001 of PTT Public Company Limited and its subsidiaries, in conformity with generally accepted accounting principles. Without qualifying opinion on the financial statements, the State Audit Office draws attention to note 2, 4 and 34 in the financial statements with regard to basis for financial statement presentation, changes in accounting policies of subsidiary and trading operation of Phet Crude.

Jaruvan Maintaka

Aunchalee Pongkiew

( Jaruvan Maintaka) Auditor General

(Aunchalee Pongkiew) Auditor-in-Charge

○

○ ○ ○ ○ ○ ○ ○

○

Annual Report 67 2001

(translation) As At December 31, 2001

Balance Sheets

PTT Public Company Limited and Its Subsidiaries

Unit : Baht Consolidated

The Company

10,863,330,833

8,021,386,006

Notes

Assets Current Assets Cash on hand and at banks Short-term investments

43,116,424,050

30,520,972,605

Accounts and notes receivable - trade - net

27,773,365,047

27,237,962,170

8.1

16,353,442,942

16,609,221,537

6,077,161,772

6,055,509,767

Materials and supplies - net

1,881,810,424

941,424,057

Other current assets

18,879,697,278

18,109,556,154

124,945,232,346

107,496,032,296

Amounts due from, advances and short-term loans to related parties Inventories

Total Current Assets Deferred Income Taxes

2,146,894,303

1,515,030,296

Advance and Loans to Related Parties

8.2

1,017,322,637

Long-Term Investments

19,553,456,698

27,805,790,286

Property, Plant and Equipment - Net

109,797,886,084

64,852,399,226

Intangible Assets

3,815,473,884

3,321,650,332

Advance Payment for Gas Purchased

29,257,890,044

36,073,955,461

Other Assets

681,842,211

101,808,115

291,215,998,207

242,183,988,649

Total Assets

The accompanying notes are an integral part of these financial statements.

○ ○ ○ ○ ○ ○ ○ ○

PTT Public Company Limited 68

(translation) As At December 31, 2001

Balance Sheets

PTT Public Company Limited and Its Subsidiaries

Consolidated

Unit : Baht The Company

18,488,533 26,498,561,306 4,556,556,008 6,210,358,000 9,034,804,254

18,488,533 24,622,895,108 8,727,350,261 6,210,358,000 6,816,819,254

23 24

92,751,711 4,000,000,000 4,962,493,891

92,751,711 1,032,370,229

19 38

5,111,675,137 5,594,491,450 7,569,304,623 8,870,094,846 82,519,579,759

5,111,675,137 5,594,491,450 4,113,661,758 8,357,770,217 70,698,631,658

7,509,293,790 107,029,265,468 300,891,204 17,440,396,495 2,170,142,465 2,906,875,292 1,207,761,265 5,745,680 221,089,951,418

107,029,265,468 300,891,204 2,173,870,350 2,906,875,292 1,089,436,131 5,745,680 184,204,715,783

Notes

Liabilities and Shareholdersû Equity Current Liabilities Bank overdraft and loans from banks Accounts payable - trade Amounts due to related parties Short-term loans Current portion of long-term loans Current portion of long-term liabilities from finance leases Current portion of bonds Income tax payable Accrued appropriation to the Ministry of Finance Accrued dividend Accrued expenses Other current liabilities Total Current Liabilities Deferred Income Taxes Long-Term Loans Liabilities from Finance Leases Bonds Share of Net Loss Over Investments Deposits on LPG Cylinders Other Liabilities Pension Fund Total Liabilities

8.3 18 22

12 22 23 24 21 25 26

The accompanying notes are an integral part of these financial statements.

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Annual Report 69 2001

(translation) As At December 31, 2001

Balance Sheets

PTT Public Company Limited and Its Subsidiaries

Consolidated

Unit : Baht The Company

28,500,000,000

27,972,457,250 17,992,830,666

2,850,000,000 662,597,447 8,777,415,162

(91,200,000) (184,827,659) 57,979,272,866 12,146,773,923 70,126,046,789 291,215,998,207

(91,200,000) (184,827,659) 57,979,272,866 57,979,272,866 242,183,988,649

Notes

Liabilities and Shareholdersû Equity (Continued) Shareholdersû Equity Share capital 27.1 Registered capital 2,850,000,000 ordinary shares of Baht 10 each Issued and fully paid-up capital 2,797,245,725 ordinary shares of Baht 10 each Share premium 27.2 Retained earnings Appropriated Legal reserve 27.3 Reserve for Self-Insurance Fund 27.4 Unappropriated Unrealized loss from investment in available-for-sale securities Loss from foreign currency translation Equity before minority interests in subsidiaries Minority interests in subsidiaries Total Shareholdersû Equity Total Liabilities and Shareholdersû Equity

The accompanying notes are an integral part of these financial statements.

(Signed) Viset Choopiban (Viset Choopiban) President

(Signed) Pichai Chunhavajira (Pichai Chunhavajira) Senior Executive Vice President, Corporate Finance & Accounting

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PTT Public Company Limited 70

(translation) For The Three-Month Period Ended December 31, 2001

Statements of Income

PTT Public Company Limited and Its Subsidiaries

Consolidated

Unit : Baht The Company

88,117,826,868 1,007,317,457 1,377,851,093 90,502,995,418

87,571,389,045 824,765,842 1,472,306,541 1,400,721,087 91,269,182,515

76,131,709,981 3,556,396,945 35,030,200 1,107,337,002 139,721,567 4,642,677

80,644,880,626 3,042,944,427 334,838,414 139,721,567 2,185,312

223,944,157

434,395,135

483,203,259 81,681,985,788 8,821,009,630 2,457,349,241 2,515,445,519 3,848,214,870 894,777,284 2,953,437,586

486,931,144 85,085,896,625 6,183,285,890 2,025,707,752 1,204,140,552 2,953,437,586 2,953,437,586

1.30

Notes

Revenues Sales Other income Gain on exchange rate Share of net income of subsidiaries Total Revenues

29 30 31

Expenses Cost of sales Selling and administrative expenses Exploration expenses Depreciation and amortization Impairment loss Directorûs remuneration Share of net loss of associates and joint ventures Provision for share of net loss of associates and joint ventures Total Expenses Income before Interests and Income Taxes Interest expenses Income taxes Income before Minority Interests Income of minority interests in subsidiaries Net Income Earnings per share

The accompanying notes are an integral part of these financial statements.

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Annual Report 71 2001

(translation) For The Three-Month Period Ended December 31, 2001

Statements of Changes in Shareholdersû Equity

Share Capital Balance-beginning of the period Increase during the period Balance-ending of the period Share Premium Balance-beginning of the period Increase during the period Balance-ending of the period Retained Earnings Appropriated Legal reserve Balance-beginning of the period Increase during the period Balance-ending of the period Reserve for Self-Insurance Fund Balance-beginning of the period Increase during the period Balance-ending of the period Unappropriated Balance-beginning of the period before adjustments Cumulative effect of the change in accounting policy of subsidiary Deferred income taxes adjustment

PTT Public Company Limited and Its Subsidiaries

Consolidated

Unit : Baht The Company

20,000,000,000 7,972,457,250 27,972,457,250

17,992,830,666 17,992,830,666

2,000,000,000 850,000,000 2,850,000,000

627,698,563 34,898,884 662,597,447

11,164,728,171

(304,987,827) 1,443,627,566

Notes 27.1

27.2

27.3

27.4

4 12

The accompanying notes are an integral part of these financial statements.

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PTT Public Company Limited 72

(translation) For The Three-Month Period Ended December 31, 2001

Statements of Changes in Shareholdersû Equity

PTT Public Company Limited and Its Subsidiaries

Consolidated

Unit : Baht The Company

12,303,367,910 2,953,437,586 (850,000,000)

(34,898,884) (5,594,491,450) 8,777,415,162

(115,200,000) 24,000,000 (91,200,000)

(46,903,838)

(75,783,873) (62,139,948) (184,827,659)

11,534,028,235

(243,799,107) 856,544,795 12,146,773,923 70,126,046,789

57,979,272,866

Notes Balance-beginning of the period after adjustments Net income for the period Appropriation to legal reserve Appropriation to reserve for Self-Insurance Fund Declared dividend Balance-ending of the period Unrealized Loss from Investment in Available-for-Sale Securities Balance-beginning of the period Decrease during the period Balance-ending of the period Loss from Foreign Currency Translation Balance-beginning of the period before adjustment Cumulative effect of the change in accounting policy of subsidiary Increase during the period Balance-ending of the period Minority Interests in Subsidiaries Balance-beginning of the period before adjustment Cumulative effect of the change in accounting policy of subsidiary Increase during the period Balance-ending of the period Total Shareholdersû Equity

The accompanying notes are an integral part of these financial statements.

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Annual Report 73 2001

(translation) For The Three-Month Period Ended December 31, 2001

Statements of Cash Flows

PTT Public Company Limited and Its Subsidiaries

Cash Flows from Operating Activities Net income Adjustment to reconcile net income to net cash provided by (used in) operating activities : Depreciation, depletion and amortization Impairment loss Loss on disposal of assets Adjustment to write off assets Share of net income of subsidiaries Share of net loss of associates and joint ventures Provision for share of net loss of associates and joint ventures Income of minority interest in subsidiaries Gain on foreign exchange Bad debt expenses Amortization of exploration cost Amortization of bond and share issue expenses Amortization of bond discounts Deferred income taxes Amortization of deferred interests from finance lease Adjustment to write off leasehold rights Net income from operating activities before changes in operating assets and liabilities

Consolidated

Unit : Baht The Company

2,953,437,586

2,014,435,632 139,721,567 6,811,258 484,349 360,073,792

1,241,937,044 139,721,567 4,512,128 484,349 (1,400,721,087) 434,395,135

347,073,624 894,777,284 (1,659,467,508) 66,568,987 2,115,493 4,100,511 277,212 389,222,639 7,522,166 2,099,479

486,931,144 (1,525,470,329) 54,675,715 (71,402,731) 7,522,166 2,099,479

5,529,254,071

2,328,122,166

The accompanying notes are an integral part of these financial statements.

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PTT Public Company Limited 74

(translation) For The Three-Month Period Ended December 31, 2001

Statements of Cash Flows

PTT Public Company Limited and Its Subsidiaries

Changes in operating assets and liabilities : Decrease in accounts and notes receivable - trade Decrease in amounts due from, advances and short-term loans to related parties Decrease in inventories Increase in materials and supplies Decrease in other current assets Increase in prepaid expenses Increase in advance payment for gas purchased Decrease in accrued income Increase in other accounts receivable (Increase) decrease in other assets Increase in income tax payable Increase in accounts payable - trade Increase (decrease) in amounts due to related parties Increase (decrease) in accrued expenses Increase in other current liabilities Increase in deposits of LPG cylinders Decrease in pension fund Increase in other accounts payable Decrease in other liabilities Net cash provided by operating activities

Consolidated

Unit : Baht The Company

7,453,612,928

7,807,796,206

2,961,182,252 1,564,398,033 (13,995,649) 154,737,098 (30,124,260) (3,952,306,968) 145,426,586 (871,552,040) (24,884,774) 1,706,077,682 1,792,599,501

3,693,333,525 1,550,338,575 (8,227,817) 218,809,208 (31,754,774) (5,130,581,541) 121,520,013 (841,929,955) 11,819,074 1,032,370,229 584,765,875

597,064,800 493,387,618 269,870,921 30,969,940 (64,760) 403,679,416 (964,971,586) 11,715,106,738 17,244,360,809

(424,858,652) (59,988,215) 494,547,931 30,969,940 (64,760) 520,572,017 (51,081,293) 9,518,355,586 11,846,477,752

The accompanying notes are an integral part of these financial statements.

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Annual Report 75 2001

(translation) For The Three-Month Period Ended December 31, 2001

Statements of Cash Flows

PTT Public Company Limited and Its Subsidiaries

Cash Flows from Investing Activities Proceeds from disposal of property, plant and equipment Payment of property, plant and equipment Payment of intangible assets Payment of long-term investments Payment of short-term investments Cash received from short-term investments Net cash used in investing activities Cash Flows from Financing Activities Cash received from issuing ordinary shares Cash received from share premium Cash received from notes payable Repayment of long-term loans Repayment of short-term loans Repayment of notes payable Payment of liabilities from finance leases Increase in bank overdrafts Dividend paid Net cash provided by financing activities Effects from exchange rate in cash and cash equivalents Increase in loss from foreign currency translation Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and Cash Equivalents at the end of the Period 5 Supplemental Cash Flows Information Cash Paid During the Period Interest expenses Income taxes

Consolidated

Unit : Baht The Company

1,975,704 (2,914,775,318) (144,777,286) (12,673,918,750) (29,631,000,000) 43,000,000 (45,319,495,650)

1,984,560 (556,001,321) (8,820,449) (2,784,363,600) (29,631,000,000) 43,000,000 (32,935,200,810)

7,972,457,250 17,992,830,666 1,700,000,000 (2,262,803,576) (2,741,594,400) (1,700,000,000) (21,903,165) 18,488,533 (39,879) 20,957,435,429

7,972,457,250 17,992,830,666 1,700,000,000 (2,262,803,576) (2,741,594,400) (1,700,000,000) (21,903,165) 18,488,533 20,957,475,308

55,237,881 (62,139,948) (7,124,601,479) 30,592,152,948

13,524,914 (117,722,836) 8,147,878,032

23,467,551,469

8,030,155,196

2,343,318,286 176,833,134

2,004,852,161 -

The accompanying notes are an integral part of these financial statements.

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PTT Public Company Limited 76

(translation) For The Three-Month Period Ended December 31, 2001

Notes to Financial Statements

PTT Public Company Limited and Its Subsidiaries

1. General Information PTT Public Company Limited (çThe Companyé) was incorporated as a public company on October 1, 2001 on corporatization from the Petroleum Authority of Thailand (çPTTé) under the Corporatization Act of B.E. 2542 (1999), thatûs assumed transfer of all business, rights, debts, liabilities, assets and equity, as well as all staffs from PTT, with exception to comply with instructions, rules, regulations and the Cabinet Resolution as applicable to State Enterprise. The Company was subsequently listed on the Stock Exchange of Thailand on December 6, 2001. Its principal activity is to operate the petroleum business. The Company has investments in subsidiaries, associates, and joint ventures that operate in petroleum exploration and production activities, natural gas operations, refining, oil marketing and international trading and petrochemical businesses. The staffs of the Company and its subsidiaries and joint ventures at December 31, 2001 numbered 3,868. The staff cost of the Company and its subsidiaries and joint ventures for the three-month period ended December 31 2001 are Baht 1,126.57 million. The registered office of the Company is 555 Vibhavadi Rangsit Road, Ladyao, Chatuchak, Bangkok, Thailand. 2. Basis for Financial Statement Presentation The Company was corporatized as PTT Public Company Limited on October 1, 2001. Therefore, in its first accounting period the Company has presented consolidated financial statements together with the separate financial statements of the Company for the three-month period ended December 31, 2001, without comparative figures, since its twelve months accounting period is ended December 31. In the consolidated financial statements, investments in subsidiaries, associates and joint ventures are accounted for under the equity method. The Company recognized share of net income (loss) of those companies for the three-month period ended December 31, 2001 based on audited financial statements for the year then ended, with the net balance of net income (loss) in the financial statements for the nine-month period ended September 30, 2001 which has already recognized in the PTTûs financial statements. The financial statements of the Company present the financial position and the results from operations of Head Office, including Petrochemical and Refining Sector Group and the other two business sector groups, which are Natural Gas Sector Group and Downstream Oil Sector Group. The financial statements also include the assets and liabilities of the Pension Fund and the Self-Insurance Fund. The consolidated financial statements include the financial statements of PTT Public Company Limited, its three subsidiaries and its two joint ventures are accounted for under the equity method together with the financial statements of two joint ventures which are jointly controlled entities by using proportionate consolidation method. The intragroup transactions and balances are eliminated. Where appropriate, the financial statements of subsidiaries, associates and joint ventures should be adjusted to be consistent with the accounting policies of the Company. Minority interests will be separately disclosed under shareholdersûs equity.

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Annual Report 77 2001

(translation) Details of subsidiaries and joint ventures are as follows : Company

Established In

Subsidiaries : PTT Exploration and Production Public Company Limited and its subsidiaries (çPTTEPûû) PTT Philippines, Inc. (çPTTPIûû)

Business

Relationship

% Shareholding

Thailand

Petroleum Shareholder 60.97 exploration and and production management The Oil marketing Shareholder 100.00 Philippines and management PTT International Trading Pte. Ltd. Singapore Oil international Shareholder 100.00 (çPTTTûû) trading and management Joint ventures : Trans Thai-Malaysia (Thailand) Thailand Natural gas Shareholder 50.00 Co., Ltd. (çTTM (T)ûû) and management Trans Thai-Malaysia (Malaysia) Malaysia Natural gas Shareholder 50.00 Co., Ltd. (çTTM (M)ûû) and management 3. Summary of Significant Accounting Policies 3.1 Revenue recognition Sales are recognized upon delivery of products and acceptance by customers. Other revenues are recognized on the following bases: Interest income on a time proportion basis by using the effective yield of an interest bearing asset. Royalty income on an accrual basis in accordance with the substance of the relevant agreement. Dividend income when the shareholderûs entitlement arises. Revenues other than the above are recognized on the accruals basis. 3.2 Allowance for doubtful accounts General provisions are recorded for accounts receivable - trade balances, excluding receivable from government agencies and state enterprises, which are over 6 months overdue at the following rates: Aging of overdue balances Over 6 months - 1 year Over 1 year - 2 years Over 2 years

Percentage of allowance for doubtful accounts 50.00 75.00 100.00

Specific provisions are made for accounts receivable ending balances including amount due from related parties which recovery is doubtful, taking into account past experience of payment history and current financial status of accounts receivable. Bad debts for specified items are recognized for during the year.

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PTT Public Company Limited 78

(translation) 3.3 Inventories Inventories are valued at the lower of cost of acquisition and net realizable value. Cost is determined on the first-in, first-out (FIFO) basis. The subsidiaries and most associates use the weighted average cost method to determine the cost of inventories. The cost of imported petroleum products comprises various importing expenses, surveyorsû fees, and contributions to or compensation from the Oil Stabilization Fund as the case may be. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and related selling expenses. 3.4 Materials and supplies Materials and supplies are valued at the weighted average cost. Provision is made in full for obsolete or defective and unserviceable items. 3.5 Deferred income taxes Deferred income taxes are recorded using the liability method in respect of all temporary differences between the carrying amounts and the tax bases of assets and liabilities that are expected to generate income or increase expenditures in the future. This is in accordance with the International Accounting Standard No.12 çIncome Taxesé (revised, year 1996) 3.6 Long-term investments Investments in subsidiaries, associates and joint ventures which are jointly controlled entities have been accounted for under the equity method. Losses on investments in excess of the carrying value are made through recognizing the companyûs liabilities not more than obligations. Investments under the equity method are carried after adjustment for impairment of investments in order to recognize loss that may have occurred in the case of a significant decline in the carrying value of those investments. Investment in others, being general investments are carried at cost. Allowance for impairment of investments is made to recognize losses that may have arisen in the case of a significant decline in the carrying value of those investments. Investments in available-for-sale securities are carried at fair value. Changes in the carrying value are recognized as separate items in shareholdersû equity until those investments are disposed of and then such changes are recorded in determining earnings. Fair values are calculated with reference to bid prices quoted by the Stock Exchange of Thailand on the balance sheet date. 3.7 Borrowing costs Interest costs, including adjustment of exchange differences arising from foreign currency borrowing and other financial charges incurred on borrowed funds to finance the construction of a qualifying asset are capitalized during the period of time that is required to complete and prepare the property for its intended use. To the extent that funds are borrowed generally and used for the purpose of obtaining a qualifying asset, the amount of borrowing cost eligible for capitalization should be determined by applying a capitalization rate to the weighted average

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Annual Report 79 2001

(translation) cost of expenditures on that asset. The borrowing costs will be recognized as expenses when the construction is substantially completed and ready for its intended use. 3.8 Property, plant and equipment Property, plant and equipment are stated at cost of acquisition, less subsequent accumulated depreciation and allowance for impairment of assets. Depreciation is charged on a straight-line method to expenses over its estimated useful lives as follows: Depreciation percentage rates per annum Buildings 3.33 - 10.00 Machinery and equipment 3.33 - 10.00 Other assets 10.00 - 20.00 Assets acquired from donation are stated at their acquisition costs. Construction in progress is stated at cost of construction. Interest costs, exchange differences arising from borrowings regarded as an adjustment to the interest costs, and other borrowing costs that are directly attributable to the construction are capitalized as a part of cost of the construction in progress. Once the construction is substantially completed and ready for its intended use, such costs incurred thereafter are recognized as expenses. Gain or loss on disposal of assets, which is calculated by reference to their costs less subsequent accumulated depreciation and allowance for impairment of assets, is recognized as income or expenses in the statement of income. Depreciation, depletion and amortization relating to proved oil and gas properties is determined under the unit of production method, based on the estimated proved recoverable reserves. Changes in reserve estimates are recognized prospectively. 3.9 Leases of property, plant and equipment Leases of property, plant and equipment, where the Company assumed substantially all the risks and rewards of ownership are classified as finance leases. At the inception, these leased assets are capitalized at the estimate present value of the underlying lease payments. Each lease payment is allocated between liability and finance charges. The finance charges are calculated at a constant rate on the remaining balance of the liabilities. Finance cost is charged as expenses in the statement of income over the lease period. The corresponding obligations are recorded net of finance charges in the balance sheets. Depreciation is charged on the straight-line method over the useful life of the relevant category of asset. Leases of property, plant and equipment, where the lessor assumed all the risks and rewards of ownership are classified as operating leases. Lease payments made under operating leases are charged to the statement of income over the lease period.

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PTT Public Company Limited 80

(translation) If the operating lease agreement is terminated before maturity, the compensation paid to the lessor for such termination is charged as expenses in the statement of income for the period in which the termination takes place. 3.10 Oil and gas properties The subsidiary follows the successful efforts method in accounting for its oil and gas exploration and production activities, as follows: - Acquisition costs of concession rights are capitalized as assets. - Exploratory costs, comprising geological and geophysical costs as well as area reservation fees during the exploration stage, are charged to expenses as incurred. - Exploratory drilling costs (both tangible and intangible) are initially capitalized as assets. If exploratory wells do not establish proven reserves or are determined to be economically unsuccessful, the related costs are charged as expenses. - Development costs, irrespective of whether relating to development wells or unsuccessful development wells, are capitalized as assets. 3.11 Intangible assets Intangible assets including land rights, leasehold rights, other operating rights and patents are stated at acquisition cost less accumulated amortization and allowance for impairment of assets. Amortization is charged on the straight-line method over the contract period, as follows: Amortization rates per annum Land rights/leasehold rights 3.33 - 20.00 Other operating rights 10.00 Patents 10.00 - 20.00 Land rights represent the rights to use the land for laying natural gas pipelines. Leasehold rights represent the lease of land and/or buildings for operations, offices or other purposes. Other operating rights represent the right to operate KFC shops in service stations. Patents represent the rights to use computer software licenses. 3.12 Impairment of assets The company assesses the impairment of assets on the balance sheet date when there is an event or a change in circumstances indicating that the recoverable amount of the assets is significantly lower than the net book value. Loss on impairment of assets is recognized as expense immediately in the statement of income. In case that the indication of the impairment of assets no longer exists or the amount of the impairment loss decreases, the company will reverse such impairment loss to be recognized as income immediately in the statement of income. However, the reversed amount could not exceed the net book value (cost net of accumulated depreciation or accumulated amortization).

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Annual Report 81 2001

(translation) 3.13 Pre-operating expenses Pre-operating expenses are charged to the statement of income as incurred. 3.14 Foreign currency transactions Foreign currency transactions are translated into Baht at the exchange rates prevailing at the transaction date. Gains or losses resulting from the settlement of receipt/payment transactions during the period and from the conversion of foreign currency monetary assets and liabilities at the closing rate on the balance sheet date are wholly recognized as income or expenses in the period incurred. Gains or losses arising from entering into contracts as hedges of risks are recognized in the period that the contracts are made and are amortized as income or expenses in the statement of income over the contract period. Gain or loss on the hedging instrument from changes in foreign exchange rates are recognized as income or expenses in the statement of income in the same period as corresponding exchange differences arising on the hedged position. For foreign subsidiaries and joint ventures, which are self-sustaining foreign entities, monetary and non-monetary assets and liabilities are translated into Baht using the closing rate (the average buying and selling rate determined by the Bank of Thailand at the balance sheet date). Statements of income are translated at the average exchange rates for the period. All exchange differences arising on translation are recognized as gains or losses from foreign currency translation and are taken directly to shareholdersû equity. For integrated foreign operation of PTTEP, monetary assets and liabilities are translated into Baht using the closing rate (the average buying and selling rate determined by the Bank of Thailand at the balance sheet date). Statements of income are translated at the transaction date. All exchange differences arising on translation are recognized as income or expenses for the period. 3.15 Income taxes Income taxes for the period are calculated pursuant to the Revenue Code and the Petroleum Income Tax Act B.E. 2514 and Amendment B.E. 2532 and the Corporate Income Tax of Myanmar, the Philippines and Singapore. Deferred income taxes are calculated in accordance with Note 3.5. 3.16 Pension fund and provident fund The Company contributes monthly to the Pension Fund at the rate of 10% of its staffûs salaries and also contributes additional amount to provide an adequate reserve at the rate of 100% of the obligation due at the end of accounting period. Interest earned from the assets of Pension Fund are recognized as income, while contributions are recognized as expenses in the statement of income.

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PTT Public Company Limited 82

(translation) PTT established a provident fund under the name of çThe Registered Provident Fund of Petroleum Authority of Thailand and Affiliatesé, that was renamed as çThe Registered Provident Fund of PTT Public Company Limited and Affiliatesé on October 10, 2001, since PTT was corporatized as PTT Public Company Limited under the Corporatization Act of B.E. 2542 (1999). Staff entering PTT Public Co., Ltd. on or after October 1, 1993, are required to be members of the Provident Fund. Those who entered earlier may apply for membership of either the Pension Fund or the Provident Fund. PTT contributes monthly to the Provident Fund at the rate of 10% of its staffûs salaries, and such contributions are recognized as expenses in the statement of income. PTTEP, a subsidiary in Thailand, established a provident fund under the name of çStaff of PTTEP Registered Provident Fundé and contributes monthly to the fund at the rate of 15% of its staffsû salaries. 3.17 Earnings per share Earnings per share is determined by dividing the net income by the weighted average number of shares outstanding during the period. 3.18 Cash and cash equivalents Cash and cash equivalents in the statement of cash flows comprise cash on hand and at banks with maturity periods within 3 months, and also includes those relating to the Pension Fund and the Self-Insurance Fund. 3.19 Financial instruments Financial assets carried on the balance sheets date of the Company and its subsidiaries include cash in hand and at banks, short-term investments, accounts receivable - trade, other receivables, subordinated loans to associates and longterm investments. Financial liabilities, which are the contractual obligations of the Company and its subsidiaries, include accounts payable - trade, other payables, liabilities from finance leases, bonds, short-term and long-term loans. Besides, financial instruments are used to reduce risk exposure arising from fluctuations in foreign currency exchange, interest rates and oil market price. These instruments, which mainly comprise forward foreign exchange contracts, currency and interest rate swap agreements and oil price risk contracts. The Company and its subsidiaries have entered into forward foreign exchange contracts to protect the Group from movements in foreign exchange rates by establishing the exchange rate at which foreign currency assets and liabilities will be settled in the future. Obligations under forward foreign exchange contracts are recognized as assets or liabilities in the balance sheet at the inception. The discount or premium incurred in entering into each agreement is amortized as income or expenses over the contract period.

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Annual Report 83 2001

(translation) The Company and its subsidiaries have entered into interest rate swap agreements to protect the Group from movements in interest rates. Any differential to be received or paid on an interest rate swap agreement is recognized as a component of interest revenue or expense over the period of the agreement. Gains or losses on early termination of interest rate swaps or on repayment of the borrowings before maturity are taken to the statement of income as income or expenses. The Company has entered into oil price risk contracts to protect its physical delivery purchase and supply contracts to which it is committed from movement of oil world market prices. Such contracts representing agreements to buy or sell at a specified price in the future. Subsequent differences will be recognized in the statement of income at the date of maturity. 4. Changes in Accounting Policies of Subsidiary In 2001, PTTEP changed its accounting policies for investments in joint ventures that are jointly controlled entities from the cost method to the equity method in the separate financial statements and using the proportionate consolidation method in the consolidated financial statements. For changes in accounting policies, PTTEP has adjusted the financial statements for the prior period as if it had recorded its investment in the joint ventures and presented consolidated financial statements under the new accounting policy since the beginning. The accumulative effects of the changes in the accounting policies from the past until the beginning of current period, that is adjusted to brought forward retained earnings amounting to Baht 304.98 million. 5. Cash and Cash Equivalents As at December 31, 2001, cash and cash equivalents in the cash flow statements are as follows :

Cash on hand and at banks Fixed deposits (maturity not later than 3 months) Treasury bills (maturity not later than 3 months) Total

Consolidated 10,863.33 88.60 12,515.62 23,467.55

Unit : Million Baht The Company 8,021.39 8.77 8,030.16

6. Short-Term Investments As at December 31, 2001, short-term investments are as follows :

Fixed deposits Treasury bills Promissory notes General investments Total

Consolidated 933.29 30,146.63 12,000.00 36.50 43,116.42

Unit : Million Baht The Company 853.47 17,631.00 12,000.00 36.50 30,520.97

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PTT Public Company Limited 84

(translation) The fixed deposits as stated above included fixed deposits with original maturity periods within 3 months in the consolidated financial statements amounted to Baht 88.60 million, and in the Company financial statements amounted to Baht 8.77 million. Treasury bills in the consolidated financial statements included treasury bills with original maturity periods within 3 months amounted to Baht 12,515.62 million. General investments comprise investments in PetroAsia (Maoming) Co., Ltd., PetroAsia (Huidong-Jilong) Co., Ltd. and PetroAsia (Kaiping) Co., Ltd. amounting to Baht 29.50 million which is in the selling process, and investment in Thai LNG Co., Ltd. (Thai LNG) amounting to Baht 7.00 million which is transferred from long-term investment as described in note 13. 7. Accounts and Notes Receivable - Trade - Net As at December 31, 2001, accounts and notes receivable - trade are as follows : Unit : Million Baht Consolidated The Company Accounts receivable - trade 28,160.20 27,585.63 Notes receivable 1,238.97 1,238.97 Total 29,399.17 28,824.60 Less Allowance for doubtful accounts 1,625.80 1,586.64 Accounts and notes receivable - trade - net 27,773.37 27,237.96 As at December 31, 2001, certain long outstanding accounts receivable of which aging of overdue balances are as follows : Unit : Million Baht Consolidated The Company Less than 3 months 1,076.83 1,055.91 Over 3 - 6 months 60.63 49.33 Over 6 - 12 months 108.01 92.17 Over 12 months 1,642.90 1,615.23 Total 2,888.37 2,812.64 As at December 31, 2001, the allowance for doubtful accounts in the consolidated financial statements amounted to Baht 1,625.80 million and in the Company financial statements amounted to Baht 1,586.64 million. The provision charged to the statement of income for the period of three months ended December 31, 2001 amounted to Baht 62.34 million and Baht 54.68 million in the consolidated and Company financial statements, respectively. Accounts and notes receivable - trade as at December 31, 2001 included receivables from Government Agencies and State Enterprise in the consolidated financial statements amounting to Baht 11,440.10 million, and in the Company financial statements amounting to Baht 11,393.04 million. The Company has received payment from the Bangkok Mass Transit Authority (BMTA) amounting to Baht 3,900 million as at December 13, 2001 with respect to the Cabinet Resolution as at October 16, 2001. The outstanding balance of receivable from BMTA as at December 31, 2001 is amounting to Baht 446.23 million.

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Annual Report 85 2001

(translation) 8. Related Party Transactions Significant related party transactions are summarized as follows : 8.1 Receivable from, advances to and short-term loans to related parties as at December 31, 2001 Consolidated Accounts and notes receivable - trade Subsidiaries Associates Less Allowance for doubtful accounts Other related parties Joint ventures Other accounts receivable and accrued receivable Subsidiaries Associates Less Allowance for doubtful accounts Joint ventures Loans to related parties (short-term) Associates Total

Unit : Million Baht The Company

16,108.15 283.11 15,825.04 84.67 15,909.71

110.10 16,108.15 283.11 15,825.04 84.67 0.04 16,019.85

491.85 145.62 346.23 346.23

6.98 491.85 145.62 346.23 138.66 491.87

97.50 97.50 16,353.44

97.50 97.50 16,609.22

On May 22, 2001, the Cabinet Resolution approved the Company to grant a temporary loan, fully secured on inventory and accounts receivable, to an associate to support its ability to purchase raw materials. The associate can withdraw such loan within Baht 600 million in three specific periods, which are June 2001, August 2001 and the last period if it has to withdraw since sales and production increase is over its forecast in marketing and production plan, with respect to the Companyûs consideration. This loan to the associate bears interest rate at MOR of Krung Thai Bank Co., Ltd. As of December 31, 2001, the associate withdrew amounting to Baht 350 million and repaid amounting to Baht 252.50 million, therefore, the outstanding balance is Baht 97.50 million. The repayment period of the loan is not later than, which may be extended not later than mid-2002, according to the Companyûs consideration. 8.2 Advances and loans to related parties as at December 31, 2001 Unit : Million Baht Consolidated The Company Other account receivable and accrued receivable Associates 313.93 313.93 Less Allowance for doubtful accounts 313.93 313.93 -

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PTT Public Company Limited 86

(translation)

Consolidated Advances Associates Less Allowance for loss on impairment Of assets Loans to related parties (long-term) Associates Total

Unit : Million Baht The Company

903.64

903.64 -

1,017.32 1,017.32

The Company applied MLR + 0.5% p.a. to determine cost of loans to an associate, the MLR is average MLR of three commercial banks comprise Krung Thai Bank Public Co., Ltd., the Siam Commercial Bank Public Co., Ltd. and Thai Farmers Bank Public Co., Ltd. According to note 39.3, the Company has commitments to provide financial support to an associate by means of subordinated loans, equity or other support. As at December 31, 2001, the Company has granted subordinated loan, denominated in Baht, to that associate amounting to Baht 5,754.06 million (equivalent to USD 148.05 million). Since the Company has recognized share of loss over investments amounting to Baht 4,736.74 million according to note 21, therefore, outstanding balance of long-term loans to related parties is stated above at the balance net of share of net loss over investments. 8.3 Amounts due to related parties as at December 31, 2001 Consolidated Accounts payable - trade Subsidiaries Associates Other related parties Accounts payable - others Subsidiaries Associates Other related parties Total

Unit : Million Baht The Company

4,531.25 6.20 4,537.45

4,051.47 4,531.25 6.20 8,588.92

15.25 3.86 19.11 4,556.56

119.32 15.25 3.86 138.43 8,727.35

8.4 Revenues and expenses for the three-month period ended December 31, 2001 Unit : Million Baht Consolidated The Company Revenues Sales of goods Subsidiaries Associates Other related parties

25,347.40 0.67

189.06 25,347.40 0.67

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Annual Report 87 2001

(translation)

Consolidated Interest income Associates Other income Subsidiaries Associates Other related parties Joint ventures Expenses Purchase of goods Subsidiaries Associates Other related parties Other expenses Subsidiaries Associates Other related parties

Unit : Million Baht The Company

148.75

61.79 1.23 -

1.98 61.79 1.23 0.45

15,938.22 23.46

8,146.04 15,938.22 23.46

15.49 55.72

3.32 15.49 55.72

Related party transactions as stated above exclude trade accounts receivable and sales to government agencies and state enterprises since the Company has presented these transactions as trade accounts and notes receivable and sales as set out in Notes 7 and 29, respectively. Policy stipulates that prices between the Company and its related parties be based on the normal prices used in the same type of business in transactions with third parties. Goods purchased from a subsidiary are at prices fixed by the subsidary with reference to world market prices. 9. Inventories Inventories as at December 31, 2001 are as follows : Unit : Million Baht Consolidated The Company Downstream Oil Products 5,761.59 5,739.94 Gas Products 269.44 269.44 Others 46.13 46.13 Total 6,077.16 6,055.51 PTTûs inventories as stated above include legal reserve of Baht 4,463.45 million. 10. Materials and Supplies - Net Materials and supplies as at December 31, 2001 are as follows :

Spare parts, equipment and others Less Allowance for obsolescence Total

Unit : Million Baht Consolidated The Company 1,931.64 959.47 49.83 18.05 1,881.81 941.42

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PTT Public Company Limited 88

(translation) 11. Other Current Assets Other current assets as at December 31, 2001 are as follows :

Other receivables Less Allowance for doubtful accounts Other receivables - net Accounts receivable - forward foreign Exchange contracts Prepaid expenses Accrued income Value added and purchase tax Others Total

Unit : Million Baht Consolidated The Company 4,352.55 3,768.64 344.83 344.83 4,007.72 3,423.81 4,007.09 198.70 10,039.28 533.47 93.44 18,879.70

4,007.09 189.88 9,972.00 515.98 0.80 18,109.56

Accounts receivable - forward foreign exchange contracts is recognized under forward foreign exchange contracts for hedging of risk exposure arising from foreign currency exchange fluctuations, associates with the settlement of natural gas purchased from Yadana and Yetagun gas fields. 12. Income Taxes and Deferred Income Taxes The Company, subsidiaries and joint ventures paid the income tax expenses as follows : Tax rate of net income Petroleum income tax on petroleum business in Thailand Pursuant to Petroleum Income Tax Act B.E. 2514 (1971) Income tax under Revenue Code Income tax in the Union of Myanmar Income tax in the Philippines (2% of gross margin in case of net loss) Income tax in Singapore

50% 30% 30% 32% 24.50%

Income taxes in the consolidated financial statement and the company financial statement for the three month period ended December 31, 2001 are as follows :

Consolidated Petroleum income taxes Current income taxes Deferred income taxes Total petroleum income taxes expenses Income taxes under Revenue Code Current income taxes Deferred income taxes Total income taxes expenses under Revenue Code

Unit : Million Baht The Company

643.93 479.14 1,123.07

1,296.81 (73.18) 1,223.63

1,275.54 (71.40) 1,204.14

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Annual Report 89 2001

(translation)

Consolidated Income taxes in the Union of Myanmar Current income taxes Deferred income taxes Total income taxes expenses in The Union of Myanmar Income taxes in the Philippines Current income taxes Deferred income taxes Total income taxes expenses in the Philippines Income taxes in Singapore Current income taxes Deferred income taxes Total Income taxes expenses in Singapore Total income taxes expenses

Unit : Million Baht The Company

101.07 69.80 170.87

0.40 (4.13) (3.73)

1.42 0.18 1.60

2,515.44

1,204.14

Deferred income taxes in the consolidated financial statement and the company financial statement as at December 31, 2001 are as follows : Unit : Million Baht Consolidated The Company Deferred tax assets Income taxes under Revenue Code At October 1, 2001 2,049.42 1,443.63 Income taxes expenses 73.18 71.40 At December 31, 2001 2,122.60 1,515.03 Income taxes in the Philippines At October 1, 2001 20.16 Current income tax, MCIT 0.40 Income taxes expenses 3.73 At December 31, 2001 24.29 Total deferred tax assets 2,146.89 1,515.03 Deferred tax liabilities Income taxes in Myanmar At October 1, 2001 633.62 Income taxes expenses 69.05 At December 31, 2001 702.67 Petroleum income taxes At October 1, 2001 6,327.32 Income taxes expenses 479.13 At December 31, 2001 6,806.45 Income taxes in Singapore At October 1, 2001 Income taxes expenses 0.18 At December 31, 2001 0.18 Total deferred tax liabilities 7,509.30 -

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PTT Public Company Limited 90

(translation) PTT was corporatized as PTT Public Company Limited on October 1, 2001 under the Corporatization Act B.E. 2542 (1999). The Company has accounted for income taxes and deferred income taxes as described in note 3.5 and 3.15, respectively. As a result, the income tax charges for this period amounting to Baht 1,204.14 million, the current income tax amounting to Baht 1,032.37 million. Deferred income tax assets as of December 31, 2001 amounting to Baht 1,515.03 million, comprise cumulative income tax revenue as at September 30, 2001 amounting to Baht 1,443.63 million which has been adjusted to brought forward retained earnings and income tax revenue for the period amounting to Baht 71.40 million. As at December 31, 2001, the Company has deferred tax asset amounting to Baht 1,515.03 million. The company is subject to income tax pursuant to the Revenue Code, at the corporate rate of 30% of net income for the period from October 1, 2001 to December 31, 2001, subject to lower income tax rate of 25% of net income pursuant to a royal decree based on the Revenue Code çDeduction of State Revenue rateé (No. 387) B.E. 2544 (2001) for the period from 2002 to 2006 which is totaling five continuous accounting periods from the first accounting period beginning on or after the date that the Company listed on the Stock Exchange of Thailand (December 6, 2001) and will be subject to income tax at the rate of 30% of net income since the accounting period of 2007. 13. Long-Term Investments Long-term investments as at December 31, 2001 are as follows Company

% Shareholding Consolidated The Company

Investments recorded under the equity method Subsidiaries : 1 PTT Exploration and Production Public Co., Ltd. (PTTEP) 2 PTT Philippines, Inc. (PTTPI) 3 PTT International Trading Pte. Ltd. (PTTT) Associates: : Refining Sector Group 4 Thai Oil Co., Ltd. (TOCL) 5 Bangchak Petroleum Public Co., Ltd. (BCP) 6 Rayong Refinery Co., Ltd. (RRC) 7 Star Petroleum Refining Co., Ltd. (SPRC) 8 Thai Lube Base Co., Ltd. (TLB) Downstream Oil Sector Group 9 Thai Petroleum Pipeline Co., Ltd. (THAPPLINE) 10 PTT International Trading Co., Ltd. (PTTT (Cayman)) 11 FST Aviation Services Limited (FST)

Million Baht The Company Cost Equity Method Method

Consolidated Cost Equity Method Method

60.97 100.00 100.00

1,987.48 349.21 2.50

18,971.14 270.84 7.37

49.99 24.29 36.00 36.00 30.00

9,480.74 1,268.10 12,591.24 14,378.41 1,500.00

395.51 1,325.58 -

9,480.74 1,268.10 12,591.24 14,378.41 1,500.00

395.51 1,325.58 -

30.60

880.52

100.00

0.77

25.00

4,067.50 baht 1.13

3.33

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Annual Report 91 2001

(translation)

Company

% Shareholding Consolidated The Company

Petrochemical Sector Group 12 Aromatics (Thailand) Public Co., Ltd. (ATC) 13 Thai Olefins Co., Ltd. (TOC) 14 National Petrochemical Public Co., Ltd. (NPC) 15 National Fertilizer Public Co., Ltd. (NFC) 16 Thai Paraxyline Co., Ltd. (TPX) Natural Gas Sector Group 17 PTT Natural Gas Distribution Co., Ltd. (PTTNGD) Other Sector Group 18 Thai Oil Power Co., Ltd. (TOP) 19 New Links Energy Resources Limited** (New Links) Joint Ventures : Natural Gas Sector Group 20 Trans Thai-Malaysia (Thailand) Co., Ltd. (TTM (T)) 21 Trans Thai-Malaysia (Malaysia) Co., Ltd. (TTM (M)) Total investments under the equity method Investments recorded under the cost method Associates: : Downstream Oil Sector Group 22 Thai Lube Blending Co., Ltd. (TLBC) 23 PetroAsia (Thailand) Co., Ltd.* (PA (Thailand)) 24 PetroAsia (Sanshui) Co., Ltd.* (PA (Sanshui)) 25 PetroAsia (Huizhou) Co., Ltd.* (PA (Huizhou)) 26 Vietnam LPG Co., Ltd. (VLPG) 27 PTT Mart Co., Ltd.* (PTT Mart) 28 Subic Bay (the Philippines) Group* (Subic Bay JV) 29 KELOIL-PTT LPG Sdn. Bhd. (KELOIL) Other Companies : 30 Bangkok Aviation Fuel services Public Co., Ltd. (BAFS) 31 Fuel Pipeline Transportation Co., Ltd.* (FPT) 32 Intoplane Services Co., Ltd. (IPS) 33 PetroAsia (Shantou) Co., Ltd.* (PA (Shantou)) Total investment recorded under the cost method

Million Baht The Company Cost Equity Method Method

Consolidated Cost Equity Method Method

50.00 49.00 37.94 20.44 23.48

3,117.68 4,156.67 1,176.00 1,792.91 1,743.81

542.01 3,324.42 1,688.57

3,117.68 4,156.67 1,176.00 1,792.91 1,743.81

542.01 3,324.42 1,688.57

49.00

245.00

394.85

245.00

394.85

26.00

1,450.06

1,458.53

40.00

9,889.56

50.00

470.00

355.17

50.00

63,671.83

19,023.13

25.38 55,165.65

27,275.46

48.95

140.00

35.00 25.00 25.00 45.00 49.00

131.25 7.17 15.16 87.35 78.40

50.00 40.00

121.32 21.50

9.60 2.76 16.67 15.00

24.00 44.00 0.02 60.84 731.01

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PTT Public Company Limited 92

(translation)

Company

Investments recorded at fair value Other Companies : 34 Dhipaya Insurance Public Co., Ltd. (THIP) Less Allowance for decrease in fair value of Investment Fair value of investments - net Total long-term investment Less Provision for impairment loss Total long-term investments - net

% Shareholding Consolidated The Company

13.55

Consolidated Cost Equity Method Method

Million Baht The Company Cost Equity Method Method

312.00

91.20 220.80 64,623.64 421.48 64,202.16

91.20 220.80 19,974.94 421.48 19,553.46

91.20 220.80 56,117.46 421.48 55,695.98

91.20 220.80 28,227.27 421.48 27,805.79

* Provision for impairment loss amounting to Baht 421.48 million comprises provision loss in PTT Mart, FPT, PA (Sanshui), PA (Huizhou), PA (Shantou), Subic Bay JV and PA (Thailand) amounting to Baht 78.40, 44.00, 1.91, 0.24, 44.36, 121.32 and 131.25 million, respectively. ** New Links Energy Resources Limited holds 85.44% in PT. Medco Energi Internasional Tbk which is an Indonesian company engaged in the exploration and production of oil and gas.

Movement transactions of long-term investments are as follows

At October 1, 2001 Increase in investments Unrealized gain (loss) from investment in available-for-sale securities Share of net income in subsidiaries Share of net loss in associates and joint ventures Adjusted to share of net loss over investment in associates and joint ventures Provision for impairment loss Adjusted to retained earnings from changes in accounting policies of subsidiary Loss from foreign currency translation Reclassified to short-term investments At December 31, 2001

Unit : Million Baht Consolidated The Company 8,782.44 26,176.83 12,673.92 2,784.36 24.00 (223.95)

24.00 1,400.72 (434.40)

(1,617.42) (78.40)

(0.13) (7.00) 19,553.46

(304.98) (137.92) (7.00) 27,805.79

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Annual Report 93 2001

(translation) The changes in long term investments in the Company financial statement during the three-month period ended December 31, 2001 are made from additional investments in associates totaling Baht 2,784.36 million comprise additional investments in RRC, SPRC, and ATC amounting to Baht 556.91 million, Baht 1,166.95 million and Baht 1,060.50 million respectively. In the consolidated financial statements the investment increase amounting to Baht 9,889.56 million, resulting from PTTEP financial statement. On October 22, 2001 the cabinet has approved to discontinue the project çdevelopment of natural gas for exporté and dissolved the operations of Natural Gas Company Limited (Thai LNG), in accordance with the letter from Ministry of Finance No. Kor Ko 0209.2/25959 dated December 27, 2001. The Company, therefore, has transferred the amount of Baht 7.00 million to short-term investment, according to note 6. The Company records its investments in associates with a shareholding of at least 20% at cost and adjusted for allowance for impairment of investments since that the Company intends to dispose, or decrease its shareholding percentage in the future, including investments in associates which amounts are immaterial to the financial statements. Those associates are as follows : 1. Subic Bay (the Philippines) Group 2. PetroAsia (Thailand) Co., Ltd. 3. PetroAsia (Sanshui) Co., Ltd. 4. PetroAsia (Huizhou) Co., Ltd. 5. Vietnam LPG Co., Ltd. 6. Thai Lube Blending Co., Ltd. 7. KELOIL-PTT LPG Sdn. Bhd. 8. PTT Mart Co., Ltd. In this period, the consolidated financial statements also include the financial statements of two joint ventures. As of December 31, 2001, transactions of joint ventures included in the consolidated financial statements, according to the Companyûs proportion of 50% since the beginning of its investment, are as follows : Unit : Milion Baht Trans Thai-Malaysia Trans Thai-Malaysia (Thailand) (Malaysia) Balance sheet : Current assets 103.43 9.00 Non-current assets 405.68 Current Liabilities (153.93) (12.81) Net assets (liabilities) 355.18 (3.81) Income statement : Revenues 4.42 Expenses (119.25) (28.76) Net income (loss) (114.83) (28.76)

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PTT Public Company Limited 94

(translation) 14. Property, Plant and Equipment - Net Property, plant and equipment as at December 31, 2001 are as follows : Consolidated

Costs: At October 1, 2001 - Additions - Reclassification - Disposals - Loss from foreign currency translation At December 31, 2001

Land

Building

2,493.97 15.99 0.03 -

11,792.48 50.33 53.54 (0.19)

85,230.31 55,526.44 90.33 2,102.64 384.29 (24.95) (28.87)

2,509.99

11,896.16

(0.12) 85,679.86

Accumulated Depreciation At October 1, 2001 - Additions - Depreciation for the period - Gain (loss) from foreign currency translation - Disposals At December 31, 2001 Allowance for Impairment loss: At October 1, 2001 - Additions At December 31, 2001 Net Book Value At October 1, 2001 At December 31, 2001

Machinery Oil and Gas Construction And Properties In progress Equipment

Unit : Million Baht Other Total Assets

581.47 928.65 (514.52) -

11,508.42 167,133.09 288.99 3,476.93 (35.85) (112.51) (14.20) (68.21)

(30.86) 57,569.35

(0.17) 995.43

(0.14) (31.29) 11,747.22 170,398.01

(4,871.55) (32,562.43) (13,807.54) (6.44) (83.85) (998.78) (727.89)

(6,635.33) (57,876.85) (0.11) (6.55) (263.21) (2,073.73)

0.09 (74.66) 6.55 13.35 (4,948.85) (33,554.21) (14,610.09)

0.03 (74.54) 72.60 92.50 (6,826.02) (59,939.17)

(11.12) (11.12)

(404.10) (0.78) (404.88)

(244.96) (244.96)

2,482.85 2,498.87

6,516.83 6,542.43

52,422.92 51,880.69

41,718.90 42,959.26

581.47 995.43

(660.18) (0.78) (660.96)

4,873.09 108,596.06 4,921.20 109,797.88

The Company

Cost: At October 1, 2001 - Additions - Reclassification - Disposals At December 31, 2001

Land

Building Machinery Construction In progress And Equipment

2,493.97 0.03 2,494.00

10,855.15 83,584.15 17.03 24.24 53.54 384.29 10,925.72 83,992.68

562.57 526.69 (514.52) 574.74

Unit : Million Baht Other Total Assets

11,465.96 108,961.80 284.44 852.40 (35.85) (112.51) (14.20) (14.20) 11,700.35 109,687.49

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Annual Report 95 2001

(translation)

Building Machinery Construction In progress And Equipment

Land

Accumulated Depreciation At October 1, 2001 - Additions - Depreciation for the year - Disposals At December 31, 2001

- (4,599.54) (31,720.39) (6.44) (70.36) (977.38) 6.55 - (4,663.35) (32,704.21)

Allowance for impairment loss: At October 1, 2001 - Additions At December 31, 2001

(11.12) (11.12)

Net Book Value At October 1, 2001 At December 31, 2001

2,482.85 2,482.88

(404.10) (0.78) (404.88)

(244.96) (244.96)

5,851.51 51,618.80 5,857.49 51,043.51

562.57 574.74

Unit : Million Baht Other Total Assets

(6,618.80) (42,938.73) (0.11) (6.55) (260.27) (1,308.01) 72.61 79.16 (6,806.57) (44,174.13) -

(660.18) (0.78) (660.96)

4,847.16 65,362.89 4,893.78 64,852.40

Depreciation expense for the three-month period ended December 31, 2001 amounting to Baht 2,073.73 million in the consolidated financial statements and Baht 1,308.01 million in the Company financial statements, was recorded as cost of sales in the consolidated and the company financial statements amounting to Baht 894.96 million. Other assets include vehicles, which are acquired under financial lease amounting to Baht 375.37 million, are as follows : Unit : Million Baht Consolidated The Company Cost 444.84 444.84 Less Accumulated Depreciation 69.47 69.47 Net book value 375.37 375.37 15. Intangible Assets Intangible assets as at December 31, 2001 are as follows : Unit : Million Baht The Company

Consolidated Patent Leasehold Other right/ operating Land rights rights Costs At October 1, 2001 - Additions - Disposals - Loss from foreign currency translation At December 31, 2001

Total

Patent Leasehold Other Right/ operating Land rights rights

Total

412.42 141.83 96.14

5,761.21 55.81 -

54.42 6,228.05 - 197.64 96.14

195.71 5,545.35 5.90 54.91 96.14 -

54.42 5,795.48 60.81 96.14

650.39

(1.86) 5,815.16

(1.86) 54.42 6,519.97

297.75 5,600.26

54.42 5,952.43

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PTT Public Company Limited 96

(translation) Unit : Million Baht The Company

Consolidated Patent Leasehold Other Right/ operating Land Rights Rights Accumulated Amortization: At October 1, 2001 - Amortization for the period - Disposals - Gain from foreign currency translation At December 31, 2001 Allowance for Impairment loss: At October 1, 2001 - Loss on impairment for the period At December 31, 2001 Net Book Value At October 1, 2001 At December 31, 2001

Total

Patent Leasehold Other Right/ operating Land Rights Rights

Total

(187.41) (1,393.13) (65.88) (14.69) 75.31

(11.87) (1,592.41) (142.16) (1,370.99) - (65.88) (65.88) (1.29) 59.33 (11.60) 78.96

(11.87) (1,525.02) - (65.88) (1.29) 66.07

0.41 (267.98) (1,317.41)

0.41 (13.16) (1,598.55) (219.64) (1,292.03)

(13.16) (1,524.83)

- (1,063.66)

- (42.29) - (1,105.95)

42.55 3,571.98 41.26 3,815.47

53.55 3,110.70 78.11 3,202.28

42.55 3,206.80 41.26 3,321.65

225.01 382.41

3,304.42 3,391.80

Amortization for the three-month period ended December 31, 2001 in the consolidated financial statements amounted to Baht 91.38 million and amounted to Baht 84.64 million in the Company financial statements, and recorded as cost of sales in the consolidated and the Company financial statements amounting to Baht 12.14 million. The Company had calculated and adjusted the amortization of leasehold for this period, since it was its over charged in prior periods, amounting to Baht 150.71 million in the consolidated and the Company financial statements. This causes the amortization for the period after adjustment in the consolidated and the Company financial statements amounting to Baht (59.33) million and (66.07) million, respectively. 16. Advance Payment for Gas Purchased Advance payment for gas purchased as at December 31, 2001, are as follows : Unit : Million Baht Consolidated The Company Advance payment for gas purchased in the year 1998 1,340.16 1,749.06 Advance payment for gas purchased in the year 1999 9,003.80 11,416.24 Advance payment for gas purchased in the year 2000 14,670.28 18,088.76 Advance payment for gas purchased in the year 2001 4,243.65 4,819.90 Total 29,257.89 36,073.96 The Company has paid in advance for the committed gas volume from the Yadana and the Yetagun gas field in the Union of Myanmar, irrespective of take-up in 1998, 1999, 2000 and 2001, according to established conditions in the Export Gas Sales Agreements (Take-or-Pay). The Company has right to take certain volumes of prepaid gas (Make-up) in subsequent years. Advance payment was only made for the committed gas volume from Yetagun gas field, irrespective of take-up in 2001. The intragroup transactions and balances with PTTEP for three-month period ended December 31, 2001 amounting to Baht 6,816.07 million are eliminated from the consolidated financial statements.

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Annual Report 97 2001

(translation) For this period, since the Company has already taken all committed gas volume from Yadana gas field, therefore the Company can take certain volume of prepaid gas (Make-up), as a result, the advance payment for gas purchased in the above year 1998 decreased amounting to Baht 191.80 million. 17. Other Assets Other assets as at December 31, 2001 are as follows :

Retention and refundable deposits Prepaid expenses Deferred expenses of bond and share issuance Others Total

Consolidated 120.91 505.94 49.57 5.42 681.84

Unit : Million Baht The Company 100.98 0.83 101.81

18. Short-Term Loans Short-term loans as at December 31, 2001 are as follows :

US Dollars

Unit : Million Baht Consolidated The Company Foreign Million Foreign Million Currency Baht Currency Baht (Unit : Million) (Unit : Million) 140.00 6,210.36 140.00 6,210.36

Short-term loans amounting to USD 90 million and USD 50 million, with repayment dated February 28, 2002, bear interest rate at 3.45875% (USDLIBOR 6 months - 0.07%) and at 3.45375% (USDLIBOR 6 months - 0.075%), respectively. The lenders have deducted interest expenses amounting to USD 1.54 million and USD 0.85 million, respectively, The Company which interest was deducted by lenders withdrew such loans on August 31, 2001 and has already withdrawn the balance. 19. Accrued Appropriation to The Ministry Of Finance Accrued appropriation to the Ministry of Finance as at December 31, 2001 amounting to Baht 5,111.68 million comprises the accrued appropriation from operating results of prior period amounting to Baht 5,000 million and the accrued appropriation from governmentûs portion of gain from sale of Phet Crude of prior period amounting to Baht 111.68 million, as follows : Unit : Million Baht Consolidated The Company Accrued appropriation from operating results of prior period 5,000.00 5,000.00 Accrued appropriation from governmentûs portion of gain from sale of Phet Crude of prior period 111.68 111.68 Total 5,111.68 5,111.68

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PTT Public Company Limited 98

(translation) 20. Other Current Liabilities Other current liabilities as at December 31, 2001 are as follows :

Other payables Accounts payable - forward foreign exchange contracts Advance receipt Unrealized sales tax Retention (not later than 1 year) Others Total

Consolidated 2,317.04 4,014.01 1,061.84 1,317.74 18.46 141.00 8,870.09

Unit : Million Baht The Company 1,930.82 4,014.01 1,061.84 1,317.74 18.46 14.90 8,357.77

Accounts payable - forward foreign exchange contracts are recognized under forward foreign exchange contracts. Most of accounts payable are for hedging of risk exposure arising from foreign currency exchange fluctuations, associates with the settlement of natural gas purchased from Yadana and Yetagun gas field. 21. Share of Net Loss over Investments Share of net loss over investments in associates and joint ventures as at December 31, 2001 are as follows : Company

% Shareholding Consolidated

Associates : Refining Sector Group 1 Rayong Refinery Co., Ltd. (RRC) 2 Thai Lube Base Co., Ltd. (TLB) Petrochemical Sector Group 3 Aromatics (Thailand) Public Co., Ltd. (ATC) Joint venture : Natural Gas Sector Group : 4 Trans Thai-Malaysia (Malaysia) Co., Ltd. (TTM (M)) Total Less Transfer to long-term loans to associates (according to note 8.2) Total share of net loss over investments - net

The Company

Consolidated

Unit : Million Baht The Company

Cost Method

Equity Method

Cost Method

Equity Method

36.00 30.00

12,591.24 1,500.00

(1,075.04) (1,095.10)

12,591.24 (1,075.04) 1,500.00 (1,095.10)

50.00

3,117.68

(4,736.74)

3,117.68 (4,736.74)

50.00

17,208.92 (6,906.88)

25.38 (3.73) 17,234.30 (6,910.61)

4,736.74 2,170.14

4,736.74 2,173.87

Provision for share of net loss over investments in associates and joint ventures for the three-month period ended December 31, 2001 are as follows : Unit : Million Baht Consolidated The Company As at October 1, 2001 8,041.09 8,041.09 - Additional provision 483.21 486.94 - Decrease from investment increased during the period (1,617.42) (1,617.42) - Decrease from transfer to loans to associates (long-term) (4,736.74) (4,736.74) As at December 31, 2001 2,170.14 2,173.87

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Annual Report 99 2001

(translation) 22. Long-Term Loans Long-term loans as at December 31, 2001 are as follows : Consolidated Foreign Million Currency Baht (Unit : Million) Local loans guaranteed by the Ministry of Finance Loans from Government Savings Bank Fixed interest rate, due in 2006 PTT Bonds Due in 2002-2020 Local loans not guaranteed by the Ministry of Finance Loans from Government Savings Bank Fixed interest rate, due in 2003-2007 PTT Bonds Due in 2002-2009 Foreign loans guaranteed by the Ministry of Finance Loans US Dollars : Fixed interest rate, due in 2004-2015 Floating interest rate, due in 2012-2013 Japanese yen : Loans, fixed interest rate, due in 2013 Bond Japanese yen : Fixed interest rate, due in 2004 Foreign loans not guaranteed by the Ministry of Finance US Dollars : Floating interest rate, due in 2002 Total Less Current portion of long-term loans Total long-term loans

The Company Foreign Million Currency Baht (Unit : Million)

3,000.00

67,677.48 70,677.48

8,000.00

9,472.00 17,472.00

130.42

5,785.52

130.42

5,785.52

182.32

8,087.46

182.32

8,087.46

4,870.85

1,651.55

4,870.85

1,651.55

30,000.00

10,172.07 25,696.60

30,000.00

10,172.07 25,696.60

50.00

2,217.98 116,064.06

113,846.08

(9,034.80) 107,029.26

(6,816.82) 107,029.26

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PTT Public Company Limited 100

(translation) Maturity of long-term loans Maturity of long-term loans as at December 31, 2001 are as follows : Consolidated

Not later than 1 year Later than 1 year - 2 years Later than 2 years - 5 years Later than 5 years Total

Unit : Million Baht The Company

Foreign Local Total Foreign Local Total Currency Currency Currency Currency 3,034.80 6,000.00 9,034.80 816.82 6,000.00 6,816.82 849.18 7,919.48 8,768.66 849.18 7,919.48 8,768.66 16,007.18 18,830.00 34,837.18 16,007.18 18,830.00 34,837.18 8,023.42 55,400.00 63,423.42 8,023.42 55,400.00 63,423.42 27,914.58 88,149.48 116,064.06 25,696.60 88,149.48 113,846.08

23. Liabilities from Finance Leases Liabilities from finance leases as at December 31, 2001 are as follows : Unit : Million Baht Consolidated The Company Liabilities from finance leases - Not later than 1 year 122.46 122.46 - Later than 1 year and not later than 5 years 319.50 319.50 Future finance charges on finance leases (48.32) (48.32) Present value of liabilities under finance leases 393.64 393.64 Present value of liabilities from finance leases - Current (Not later than 1 year) 92.75 92.75 - Non-current (Later than 1 year and not later than 5 years) 300.89 300.89 Total 393.64 393.64 24. Bonds Bonds as at December 31, 2001 are as follows : Consolidated Unsubordinated bonds Unsecured unsubordinated bonds Less Current (Not later than 1 year) Total

Million US Dollars 393.28 393.28

Million Baht 17,440.40 4,000.00 (4,000.00) 17,440.40

PTTEP issued 230 unsecured unsubordinated bonds with a face value of Yen 100 million each, totaling Yen 23 billion. The bonds bear interest at the rate of 3.35% per annum and have a redemption period of 10 years (i.e. to be redeemed on September 19, 2007). On the date of the bond issuance, PTTEP entered into a swap agreement with a foreign bank to swap Yen for U.S. Dollars 193.28 million. Under this agreement, interest is charged at the rate of 7.86% per annum and payable every 6 months on March 19 and September 19 of each year. PTTEP issued 4,000,000 unsecured unsubordinated debentures with a face value of Baht 1,000 each, totaling Baht 4,000 million. The debentures bear interest at the rate of 6.50% per annum, payable every 6 months on August 1 and February 1 of each year, and mature in 3 years, to be redeemed on February 1, 2002 which PTTEP has already paid.

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Annual Report

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101 2001

(translation) PTTEP guaranteed 200,000 unsubordinated bonds which has issued by PTTEP International Limited with a face value of USD 1,000 each, totaling USD 200 million. The bonds bear interest at a rate of 7.625% per annum, payable every six months on April 1 and October 1 of each year, and have a maturity period of 10 years, to be redeemed on October 1, 2006. 25. Other Liabilities Other liabilities as at December 31, 2001 are as follows :

Retention (not later than 1 year) Provision for loss on lawsuit Others Total

Consolidated 74.62 998.35 134.79 1,207.76

Unit : Million Baht The Company 74.62 998.35 16.46 1,089.43

26. Pension Fund and Provident Fund As at October 1, 2001, the Pension Fundûs brought forward balance was Baht 5.81 million. For the three-month period ended December 31, 2001, the Company has contributed at the rate of 10% of salaries of staffs under the Pension Fund amounting to Baht 0.14 million, pension paid for staffûs retirement amounting to Baht 0.66 million and the Company made additional contribution, according to note 3.16, amounting to Baht 0.46 million which was recognized as expenses in the statement of income. Therefore, the ending balance of pension fund was stated at Baht 5.75 million, and presented as non-current liabilities in the balance sheet, according to obligations due on the same date. For the Provident Fund, the monthly contributions by the Company and its subsidiaries were recognized as expenses in the statement of income at the specified rate as set out in Note 3.16. 27. Share Capital, Share premium, Legal Reserve and Reserve for Self-Insurance Fund 27.1 Share capital PTT was corporatized as PTT Public Company Limited under the Corporatization Act B.E. 2542 (1999). On Corporatization all businesses, right, debts, liabilities, assets and equity, as well as all staffs were transferred to the Company. The existing ownerûs equity was partial established as registered capital of Baht 20,000.00 million with 2,000 million ordinary shares of par value Baht 10 fully paid, and the balances would be assigned to other items in shareholdersû equity appropriately, with respect to the resolutions of the corporatization committee which was approved by the Cabinet as at September 25, 2001, as well as in accordance with the letter No. Nor Ror 0205/10871 and Section 13(1) and 19(3) of the Corporatization Act B.E. 2542 (1999). On October 1, 2001, the Company was registered as a public company by transferring ownerûs equity in the financial statements of PTT as at September 30, 2001 amounting to Baht 33,630.32 million together with unrealized loss from investment in available-for-sale securities amounting to Baht 115.20 million and loss from foreign currency translation amounting to Baht 46.91 million,

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PTT Public Company Limited 102

(translation) the total amount of Baht 162.11 million was deducted from such ownerûs equity of PTT, therefore, total net equity was transferred to the Company amounting to Baht 33,792.43 million, which was appropriated as registered capital of baht 20,000 million as described above, to be wholly owned by the Ministry of Finance (çThe MOFé), appropriated as reserve for self-insurance fund of Baht 627.70 million as described in note 27.4 and appropriated as legal reserve at 10% of registered capital as at October 1, 2001 amounting to Baht 2,000 million as described in note 27.3, and the balance from all those above appropriation was recorded as unappropriated retained earnings amounting to Baht 11,164.73 million as at October 1, 2001. On October 2, 2001, the Company has registered the increased share capital 850 million ordinary shares of par value Baht 10, therefore the total registered capital 2,850 million ordinary shares totaling valued Baht 28,500 million. The Company has sold 47,245,725 ordinary shares of par value Baht 10 to its employees and the Registered Provident Fund of PTT Public Company Limited and Affiliates, which total amount of Baht 472.46 million was paid in full. On November 15, 2001, the Company has sold up to 750 million ordinary shares through an international offering and Thai offering at the offering price of Baht 35 per share, therefore, made of share premium amounting to Baht 18,750 million, which was fully paid together with the registered share capital amounting to Baht 7,500 million. Then the total issue and fully paid-up capital valued Baht 27,972.46 million with 2,797,245,725 ordinary shares. 27.2 Share premium The company has sold the increased share of 750 million ordinary shares at the offering price of Baht 35 per share as described in note 27.1. Such share premium amounting to Baht 18,750 million that was deducted by share issuance expenses amounting to Baht 757.17 million would make the balance of share premium as of December 31, 2001, amounting to Baht 17,992.83 million. 27.3 Legal reserve The Company appropriated legal reserve amounting to Baht 2,000 million as described in note 27.1 and also appropriated additional reserve at the rate of 10% of the increase in registered share capital amounting to Baht 850 million, this will make legal reserve as at December 31, 2001, amounting to Baht 2,850 million, which is equal to 10% of registered capital. This is in accordance with the Limited Public Company Act, B.E. 2535 (1992) which determined the Company to appropriate its annual net income to legal reserve not less than 5% of its annual net income until the reserve fund reach 10% of the registered share capital. 27.4 Reserve for self-insurance fund The company appropriated reserve for self-insurance fund amounting to Baht 627.70 million as described in note 27.1. During the period, the company appropriated net income from the operation results of the self-insurance fund which included in total net income of the Company amounting to Baht 34.90 million the reserve for self-insurance fund, therefore, the balance as at December 31, 2001 was amounting to Baht 662.60 million.

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Annual Report

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103 2001

(translation) 28. Earnings Per Share The Company has earnings per share of Baht 1.30. The basic earnings per share calculated in accordance with note 3.17. The weighted average number of paid-up ordinary shares and held by third party during the period amounting to 2,265,171,311 ordinary shares. 29. Sales Sales for the three-month period ended December 31, 2001 are as follows : Unit : Million Baht Consolidated The Company Oil products 54,289.21 53,081.59 Natural gas products 33,778.17 33,719.96 Compensation for LPG 769.84 769.84 Less Petroleum royalties (719.39) Total 88,117.83 87,571.39 Sales for the three-month period ended December 31, 2001 included sales to the Government and the State Enterprise in the consolidated and the Company financial statements amounting to Baht 16,699.73 million and Baht 16,627.29 million, respectively. Sales for natural gas products includes revenue from natural gas pipeline amounting to Baht 3,847.07 million in the consolidated financial statements and amounting to Baht 3,684.61 million in the Company financial statements. 30. Other Income Other income for the three-month period ended December 31, 2001 are as follows : Unit : Million Baht Consolidated The Company Bank interest income 208.44 26.94 Interest income from short-term investment 41.10 41.10 Interest income form loans 128.38 128.38 Interest income from overdue accounts 27.95 26.21 Transportation income 160.72 160.72 Penalty income 30.21 30.21 Gain from insurance claims 1.03 1.03 Compensation for loan interest of advance payment for gas purchased 97.79 97.79 Others 311.70 312.39 Total 1,007.32 824.77 31. Gains on Exchange Rate Gains on exchange rate for the three-month period ended December 31, 2001 are as follows :

Gain on exchange rate from loan repayment Gain on exchange rate from loan conversion at the end of period Loss on exchange rate from other transactions Total

Unit : Million Baht Consolidated The Company 258.37 258.37 1,396.43 (276.95) 1,377.85

1,320.63 (106.69) 1,472.31

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PTT Public Company Limited 104

(translation) 32. Mutual Separation Plan : MSP On April 26, 2001 the Board of Directors approved the second opening of the Mutual Separation Plan (MSP), under the Ministry of Financeûs regulation. The period of operation is September 1, 2001 to February 1, 2002, and the total number of employees joining this project is 65. The estimated early retirement payment and compensation amounting to Baht 108.00 million. The compensation is paid in compliance with the regulations of the State Enterprise Relationship Committee (SERC). Such expenses were regarded as part of staff costs for the year 2001. 33. Reforestation Under the Board of Directorsû approval on February 23, 1994, the Company has participated in the Reforestation Campaign in Commemoration of the Royal Jubilee of His Majesty the Kingûs Ascension to the Throne. The project is estimated to call for not more than Baht 3 billion of forestation covering an area of 1 million rai. An annual budget of Baht 600 million has been allocated for 5 years commencing from 1994. The Company has its own administration committee to manage the project and maintain the areas for a period of not less than 5 years. On September 16, 1998, the Board of Directors approved the extension of the projectûs period to a second stage of 6 years (1999-2004) using the budget as approved for the first stage of Baht 3 billion. The budget covers expenses for the principal project (reforestation and maintenance) and the support project (forest survival). The objective is to create public awareness among the regional people and youth so that they help towards the long-term commitments to protect the forest resources. The Company has completed 920,000 rai of the reforestation, covering areas in 44 provinces. Up to December 31, 2001, PTT Public Co., Ltd.ûs total expenses were Baht 2,445.41 million, including expenses for the three-month period ended December 31, 2001 amounting to Baht 52.57 million. These expenses have been shown in selling and administrative expenses in the statement of income. 34. Trading Operation of Phet Crude The Cabinet meeting as at February 16, 1988 approved Petroleum Authority of Thailand (PTT) to purchase/sell crude in Thailand instead of the Government by deducting operating expense from this sale before appropriation to the Ministry of Finance (MOF). Most purchase/sale crude in Thailand are from Sirikit (Phet Crude). On October 1, 2001, PTT was corporatized to PTT Public Company Limited, the Company entered into income tax system as general private company. For the three-month period ended December 31, 2001, purchase and sale of Phet Crude amounting to Baht 1,361.02 million and Baht 1,413.56 million, respectively. The portion of gain from Phet Crude amounting to Baht 52.54 million which included in net income from normal operation for tax payment. If the Company calculated the above operation expense, Baht 31.40 million, before remitting to MOF, the portion of gain from Phet Crude to the Government is Baht 21.14 million. 35. Segmented Financial Information The reporting segments of financial information relating to business sector groups in the consolidated financial statements for the three-month period ended December, 2001, are as follows:

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Annual Report

○

105 2001

(translation) Consolidated Oil

Net sales - third parties - related parties Petroleum royalties Net sales Segment operation Interest expenses Tax expense Share of net income (loss) Of associates Provision for share of net Income (loss) of associates Minority interest Net income (loss) Segment assets Investment in associates Deferred income taxes Segment liabilities Capital expenditure Depreciation Amortization Loss on impairment of assets Non-cash expenses (exclude depreciation, amortization and loss on impairment of assets)

59,478.15 7,264.78 66,742.93 128.19 (0.01) 2.13 (0.10)

Natural Exploration Gas and Production petroleum 29,258.59 100.48 0.18 6,270.97 - (719.39) 29,258.77 5,652.06 1,327.38 3,966.63 (37.51) (431.63) - (1,313.43) -

70.69

Unit : Million Baht Head Elimination Total Office expenses and others - 88,837.22 - (13,535.93) - (719.39) - (13,535.93) 88,117.83 4,105.95 9,528.15 (1,988.20) (2,457.35) (1,204.14) (2,515.44) (294.53)

(223.94)

- (483.20) (483.20) - (894.78) (894.78) 130.21 1,289.87 2,292.26 (758.90) 2,953.44 58,031.71 115,753.62 65,756.09 60,474.65 (30,504.29) 269,515.66 4.10 - 11,348.08 8,201.27 19,553.45 24.29 607.57 1,515.03 2,146.89 19,847.46 27,632.66 22,935.44 17,424.24 (10,903.51) 77,236.29 174.89 897.27 44,813.95 178.52 46,064.63 340.45 906.67 763.64 62.99 2,073.75 (79.80) 14.72 3.08 2.67 (59.33) 61.32 78.40 139.72 127.56 (2.90) 2,580.08 (1,640.26) 1,064.64

Head Office expenses and others comprise general and administrative expenses associated with central operations and share of net loss from the operations of associates in the Refining and Petrochemical Sector Group. 36. Joint Ventures Joint Ventures of PTTEP Project Unocal 3 E5 E 5 North S1 Bongkot Pailin (B12/27) Arthit

Operator Companyûs interest (%) Unocal Thailand Ltd. 5 Exxon Mobil Exploration and Production Korat Inc. 20 Amerada Hess (Thailand) Co., Ltd. 20 Thai Shell Exploration and Production Co., Ltd. 25 PTT Exploration and Production Public Company Limited 44.4445 Unocal Thailand Ltd. 45 PTT Exploration and Production Public Company Limited 80

○ ○ ○ ○ ○ ○ ○

○

PTT Public Company Limited 106

(translation) Joint Ventures of PTTEP International Limited Project Yetagun W 7/38 Yadana B 13/38 JDA (B-17 and C-19)

Operator Companyûs interest (%) Premier Petroleum Myanmar Limited 14.1667 Kerr-McGee (Thailand) Limited 15 TOTALFINAELF Exploration and Production Myanmar 25.50 PTTEP International Limited 44.4445 Carigali - PTTEPI Operating Company Sendirian Berhad

Joint Ventures of PTTEP Kim Long Vietnam Project B and 48/95

Operator Unocal Vietnam Exploration, Ltd.

Companyûs interest (%) 10

Joint Ventures of PTTEP Southwest Vietnam Project 52/97

Operator Companyûs interest (%) Unocal Southwest Vietnam Exploration & Production, Ltd. 10

The change of joint ventures proportion in 2001 PTTEP has signed the joint ventures contract in E5 North project of Petroleum Concession no. 2/2522/17 with Amerada Hess (Thailand) Co., Ltd., PTTEP holds 20% in this project. PTTEP International Limited has agreed to transfer the right of the concession in all 46 Block to Lundin Vietnam Limited, Petronas Carigali Overseas Sendirian Berhad and Petro Vietnam Exploration and Production Limited and also return Block 50 and 51 to Petro Vietnam Exploration and Production limited. PTTEP International Limited has returned Block M 8 to the government of the Union of Myanmar. 37. Disclosure of Financial Instruments 37.1 Foreign currency risk The Company made forward foreign exchange contract to pay for purchase of natural gas from Yadana and Yetagun amounting to USD 74.70 million or equivalent to Baht 3,308.69 million and repaid in January 2002. The forward foreign exchange contract for loan repayment of Euro Commercial Paper (ECP) amounting to USD 16.00 million or equivalent to approximately Baht 705.32 million and repaid in February 2002. PTTEP made currency swap agreements and forward foreign exchange contract according to note 24. 37.2 Interest rate risk On September 28, 1994 the Company had entered into the loan agreement with The Meiji Mutual Life Insurance Company / The Industrial Bank of Japan Limited totaling Yen 6,913.80 million bears interest at fixed rate of 4.70% per annum. On August 15, 1994 the Company also had made currency and interest rate swap to hedge risk exposure from Yen fluctuation by entering into ISDA:

○ ○ ○ ○ ○ ○ ○

Annual Report

○

107 2001

(translation) Interest Rate and Currency Exchange Agreement in USD equivalent to USD 69 million bears interest at the fixed rate of 7.50% per annum. The effective date of this loan was the withdrawal date on October 12, 1994. PTTEP made interest rate swap agreements to hedge this interest rate risk, as discussed in note 24. 37.3 Oil price risk The Company enters into oil price trading contracts ranging in duration from one to six months. As at December 31, 2001, the oil volume of oil price trading contracts amounting to 1.20 million barrels. The fair value is amounting to Baht 19.06 million as described in note 37.4. 37.4 Fair value of financial instruments Most financial assets and financial liabilities of the Company and PTTEP are reclassified in short-term. The Fair value of financial assets and financial liabilities approximate the carrying amount. The fair value of long-term loan is calculated using discounted cash flows based on the discount rate with similar borrowing condition to loan outstanding at end of period. Forward foreign exchange contracts, currency and interest swap including forward downstream oil contracts present the fair value as quoted market rate as follows : Unit: Million Baht Carrying amount Fair value Long-term loan 107,029.26 113,867.70 Forward foreign exchange contract (6.92) 3.83 Currency and interest exchange contract (743.09) (732.34) Forward downstream oil contract 19.06 PTTEP calculated fair value of bond with fixed rate of interest by using the discounted cash flow based on the discount rate with similar borrowing condition. The cross currency interest and principal swaps have been based on quoted market rate as follows : Unit: Million Baht Carrying amount Fair value Unsecured and Unsubordinated Yen 23 billion 7,873.03 8,478.83 Unsecured and Unsubordinated USD 200 million 9,040.60 9,885.61 Cross currency interest and principal swaps : income (loss) (870.13) (892.14) 38. Declared Dividend The company has estimated dividends to declare to shareholderûs equity in 2001 in accordance with the Board of Directorsû approval as at October 25, 2001 and has already informed in the Companyûs prospectus of issued and fully paid-up capital amounting to 2,797,245,725 shares with a par value of Baht 2.00, totaling dividend declared of Baht 5,594.49 million which has already accounted for accrued dividend declared in full.

○ ○ ○ ○ ○ ○ ○

○

PTT Public Company Limited 108

(translation) 39. Commitments and Contingent Liabilities 39.1 At the end of the year 2000, the contractor of Ratchaburi - Wang Noi Natural Gas Pipeline construction project has claimed for additional construction cost amounting to approximately U.S. Dollars 26.36 million, equivalent to approximately Baht 1,169.32 million (U.S. Dollar 1 equals to Baht 44.3597). The Company and the project consultant have agreed that the additional construction cost should be approximately Baht 832.21 million. The Company has already recorded such amount as accrued expenses. However, the exact amount of additional construction cost is still in the reconsideration process among the Company, the project consultant and the contractor. 39.2 A foreign contractor has a dispute with the Company and has filed a complaint with the arbitrator of the International Chamber of Commerce (ICC) with regard to a construction contract for onshore parallel pipeline laying from Rayong - Bangpakong - Wang Noi. Damage and legal costs amounting to approximately U.S. Dollars 61 million have been claimed. Currently, the Company has filed with the arbitrator to reserve the right relating to the damage costs and has disputed that the damage cost should not exceed U.S. Dollars 22.01 million or equivalent to Baht 976.36 million (U.S. Dollar 1 equals to Baht 44.3597) together with interest should not exceed U.S. Dollars 3,556.75 per day, which equals to Baht 157,776 per day (U.S. Dollar 1 equals to Baht 44.3597) and not more than Baht 24,253 per day. The Company has already recorded provision for such amount damage, cost and interest, totaling Baht 998.35 million which is presented under other liabilities caption as set out in Note 25. However, the final award regarding the amount of damage is still in the arbitratorûs consideration process. Nevertheless, the Company as the plaintiff has filed against the same foreign contractor as a defendant in the civil court for the delay of work submission which caused the Company damages amounting to Baht 4,274 million. The case is in the process of taking evidence. 39.3 Commitments to associates are as follows : The Company has commitments to provide an adequate financial support to an associate including working capital based on Shareholdersû Support Agreement amounting to USD 148.05 million as at December 31, 2001. The Company supports the whole amount to the associate by lending subordinated loan in Baht amounting to Baht 5,754.06 million and the Company recognized interest in loss in excess of investments amounting to Baht 4,736.74 million as described in note 8.2 and 21. Moreover, the Company has commitments to provide a commercial line by extending the terms of payment of its purchase of raw materials and/or extending credit for its finished products including contingency support amounting to USD 90 million. As at December 31, 2001, the commercial credit line has been used amounting to USD 14.62 million. The Company still has commitments to the associate at the balance of USD 75.38 million or equivalent to Baht 3,343.83 million. (USD 1 equals to Baht 44.3597)

○ ○ ○ ○ ○ ○ ○

Annual Report

○

109 2001

(translation) The Company has commitments to provide financial support to two associates under Shareholdersû Support Agreement amounting to USD 24.23 million or equivalent to approximately Baht 1,075.04 million (USD 1 equals to Baht 44.3597). The Company recognized interest in loss in excess of investments amounting to Baht 1,075.04 million as described in note 21. For the commitment to an associate amounting to USD 44.92 million or equivalent to approximately Baht 1,992.64 million. (USD 1 equals to 44.3597) The Company was approved to increase in the share capital of an associate together with other shareholders in accordance with the cabinet resolution on October 12, 2000 which the Companyûs interest is approximately USD 32.42 million or equivalent to approximately Baht 1,438.14 million (USD 1 equals to Baht 44.3597). The Company recognized interest in loss in excess of investments amounting to Baht 1,095.10 million as described in note 21. The Company has commitments to an associate to provide a commercial credit line by extending the terms of payment of its purchase of raw materials and /or extending credit for its finished products amounting to USD 50 million and also provide contingency support amounting to USD 50 million. As at December 31, 2001, the commercial credit line has been used amounting to USD 38.40 million. The Company still has commitments to this associate at the balance of USD 61.60 million or equivalent to Baht 2,732.56 million. (USD 1 equals to Baht 44.3597) On September 27, 2001, the Board of Directors concluded to increase the share capital by USD 70 million or equivalent to approximately Baht 3,220 million. The above increased Capital Settlement Plan approved the Board of Directors as at January 24, 2002. 39.4 PTTEP is the guarantor of 200,000 guaranteed unsubordinated bonds of U.S. Dollars 1,000 each, totaling U.S. Dollars 200 million issued by PTTEP International Limited. The bonds bear interest at the rate of 7.625% per annum and have a period to maturity of 10 years, to be redeemed on October 1, 2006. 39.5 As at December 31, 2001, PTTEP has contingent liabilities which are letters of guarantee amounting to Baht 40.86 million. 40. Subsequent Events On January 29, 2002 PTTEP incorporated 2 subsidiaries, PTTEP Hoan Vu Co., Ltd. (PTTEP HV) and PTTEP Hoang Long Co., Ltd. (PTTEP HL) under Cayman Islands law. Each company is registered with 50,000 shares at 1 USD per share each, totaling USD 50,000. They are wholly owned by PTTEPO. On February 13, 2002 PTTEP HV and PTTEP HL signed a Farmout Agreement with SOCO Vietnam Ltd. (an affiliate of SOCO International Plc., an upstream oil and gas company listed in London Stock Exchange) to participate in exploration projects Block 9-2 and 16-1, located offshore southeast of Vung Tau City, Vietnam with 25% and 15% interest respectively. The agreement will become fully effective upon receiving approvals from Petrovietnam and the Vietnamese government.

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PTT Public Company Limited 110

(translation) 41. Additional Information (Unaudited) The Company has presented consolidated financial statements and Company financial statements for the 3 months period ended December 31, 2001 without comparative financial information because it was the first accounting period for the Company after privatization from the çPetroleum Authority of Thailandé and registered to çPTT Public Company Limitedé. On October 1, 2001, the Company has presented the Consolidated Financial Statements and the Company Financial Statements for the years ended December 31, 2001 and 2000 for additional information for the users of these financial statements as followings :

Balance Sheet

Assets Current Assets Cash on hand and at banks Short-term investments Accounts and notes receivabletrade-net Amounts due from, advances and short-term loans to related parties Inventories Materials and supplies-net Other current assets Total Current Assets Deferred Income Taxes Advance and Loans to Related Partise Long-Term Investments Property, Plant and Equipment-Net Intangible Assets Advance Payment for Gas Purchased Other Assets Total Assets Liabilities and Shareholderûs Equity Current Liabilities Bank overdraft and loans from Banks Accounts Payable-trade Amounts due to related parties Short-term loans Current portion of long-term loans

For the years then ended December 31, 2001 and 2000 Unit : Million Baht Consolidated The Company 2001 2000 2001 2000

10,863.33 43,116.42

6,318.65 17,153.62

8,021.39 30,520.97

5,824.26 1,054.45

27,773.37

32,876.79

27,237.96

32,605.93

16,353.44 6,077.16 1,881.81 18,879.70 124,945.23 2,146.89 1,017.32 19,553.46 109,797.89 3,815.48 29,257.89 681.84 291,216.00

17,863.53 8,269.59 1,434.30 12,829.47 96,745.95 642.10 1,082.71 8,437.73 109,077.49 2,950.72 10,499.27 417.88 229,853.85

16,609.22 6,055.51 941.42 18,109.56 107,496.03 1,515.03 1,017.32 27,805.79 64,852.40 3,321.65 36,073.96 101.81 242,183.99

17,865.89 8,248.65 867.33 12,271.22 78,737.73 1,082.71 20,933.41 67,969.63 2,671.03 13,357.10 110.78 184,862.39

18.49 26,498.56 4,556.56 6,210.36

366.38 19,285.21 6,664.89 -

18.49 24,622.89 8,727.35 6,210.36

366.38 18,444.84 9,333.80 -

9,034.80

10,027.63

6,816.82

6,917.36

○ ○ ○ ○ ○ ○ ○

Annual Report

○

111 2001

(translation)

Balance Sheet (Continue)

Current portion of long-term liabilities from finance lease Current portion of bond Income tax payable Accrued apporpriation to the Ministry of Finance Accrued Dividend Accrued expenses Other current liabilities Total Current Liabilities Deferred Income Taxes Long-Term Loans Liabilities from Finance Leases Bonds Share of Net Loss over Investments Deposits on LPG Cylinders Other Liabilities Pension Fund Total Liabilities Shareholdersû Equity Share capital Registered capital 2,850,000,000 ordinary shares of Baht 10 each Issued and fully paid-up capital 2,797,245,725 ordinary shares of Baht 10 each Share premium Capial contribution from the Government Retained earnings Appropriated General reserve and reserve for expansion Legal reserve Reserve for self-Insurance Fund Unappropriated Unrealized loss from investment in availablefor-sale securities

For the years then ended December 31, 2001 and 2000 Unit : Million Baht Consolidated The Company 2001 2000 2001 2000 92.75 4,000.00 4,962.49

35.91 3,622.74

92.75 1,032.37

35.91 -

5,111.68 5,594.49 7,569.30 8,870.10 82,519.58 7,509.29 107,029.27 300.89 17,440.40 2,170.14 2,906.87 1,207.76 5.75 221,089.95

4,884.00 7,298.60 4,184.33 56,369.69 5,964.69 108,019.99 126.00 21,077.43 5,346.47 2,728.24 134.13 8.88 199,775.52

5,111.68 5,594.49 4,113.66 8,357.77 70,698.63 107,029.27 300.89 2,173.87 2,906.87 1,089.44 5.75 184,204.72

4,884.00 5,056.20 3,970.36 49,008.85 106,143.40 126.00 5,346.47 2,728.23 125.20 8.88 163,487.03

28,500.00

27,972.46 17,992.83

3,291.29

2,850.00

29,405.33 -

2,850.00

29,405.33 -

662.60 8,777.41

600.64 (11,671.08)

662.60 8,777.41

600.64 (11,671.08)

(91.20)

(139.20)

(91.20)

(139.20)

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○

PTT Public Company Limited 112

Balance Sheet (Continue)

Loss form foreign currency translation Equity before minority interests in subsidiaries Minority interests in subsidiaries Total Shareholderûs Equity Total Liabilities and Shareholdersû Equity

Income Statement

Revenues Sales Other income Gain on exchange rate Share of net income of subsidiaries Total Revenues Expenses Cost of sales Selling and administrative expenses Exploration expenses Depreciation and Amortization Impairment loss Directorûs remuneration Share of net loss of associates and joint ventures Provision for share of net loss of associates and joint ventures Total Expenses Income Before Interests and Income Taxes Interest expenses Income taxes Income Before Minority Interests Income of minority interests In Subsidiaries NET INCOME Earnings per share (Baht)

(translation) For the years then ended December 31, 2001 and 2000 Unit : Million Baht Consolidated The Company 2001 2000 2001 2000 (184.83)

(111.62)

(184.83)

(111.62)

57,979.27

21,375.36

57,979.27

21,375.36

12,146.78 70,126.05

8,702.97 30,078.33

57,979.27

21,375.36

291,216.00

229,853.85

242,183.99

184,862.39

For the years then ended December 31, 2001 and 2000 Unit : Million Baht Consolidated The Company 2001 2000 2001 2000 377,901.83 5,499.86 3,013.62

371,454.80 4,072.15 (2,434.10)

377,610.70 4,821.20 3,161.14

371,813.41 3,347.09 (1,462.95)

386,415.31

373,092.85

6,638.16 392,231.20

3,145.87 376,843.42

322,387.96

324,112.06

344,666.02

341,028.58

11,394.74 232.96 5,305.51 1,311.84 10.65

10,830.91 201.79 5,247.94 134.88 7.42

10,083.68 1,944.16 1,311.84 5.46

9,315.44 2,051.67 134.88 3.47

687.31

2,184.72

911.47

2,113.42

1,711.94 343,042.91

2,327.78 345,047.50

1,715.66 360,638.29

2,327.78 356,975.24

43,372.40 10,626.00 6,929.01 25,817.39

28,045.35 9,512.76 4,222.77 14,309.82

31,592.91 8,824.13 1,204.14 21,564.64

19,868.18 7,588.66 12,279.52

(4,252.75) 21,564.64 7.71

(2,030.30) 12,279.52 -

21,564.64 7.71

12,279.52 -

* Assumption : Basic earnings per share is calculated by dividing the annual net income by the weighted average number of paid-up ordinary shares in issue and held by others during the period as at December 31, 2001 (2,797,245,725 shares)

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Annual Report

○

113 2001

Statement of Cash Flows

Cash Flows from Operating Activities Net income Adjustment to reconcile net income to net cash provided by (used in) operating activities : Depreciation, depletion and amortization Impairment loss Loss on disposal of assets Adjustment to write off Assets Provision for obsolescence of materials and supplies Share of net income of subsidiaries Share of net loss of associates and joint ventures Provision for share of net loss of associates and joint ventures Income of minority Interest in subsidiaries Losses on disposal of investment Loss (Gain) on foreign exchange Bad debt expenses Recovery from bad debts Amortization of exploration cost Amortization of bond and Share issue expenses Amortization of bond discounts Deferred income taxes Amortization of deferred interests from finance lease Dividend income Adjustment to write off leasehold rights Directorûs remuneration Net income from operating activities before changes in operating assets and liabilities

(translation) For the years then ended December 31, 2001 and 2000 Unit : Million Baht Consolidated The Company 2001 2000 2001 2000 21,564.64

12,279.52

21,564.64

12,279.52

8,793.41 1,311.83 9.09 23.97

8,092.40 134.88 555.21 12.07

5,432.05 1,311.83 12.70 23.81

4,896.13 134.88 8.84 9.11

9.37

8.68

9.37

8.68

(6,638.16)

(3,145.87)

687.31

2,184.71

911.47

2,113.42

1,711.94

2,327.78

1,715.67

2,327.78

4,252.75 (1,863.00) 596.17 125.47

2,030.30 1,940.01 4,592.87 437.16 (265.06) 119.76

(2,248.34) 556.26 -

1,940.01 3,022.96 420.47 (265.06) -

16.68 1.11 1,473.24

73.15 1.11 507.54

(71.40)

25.07 (30.43)

5.41 (33.21)

25.07 (30.43)

5.41 (33.21)

2.76 -

(2.40) 0.13

2.76 -

(2.40) 0.13

38,711.38

35,002.02

22,577.30

23,720.80

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PTT Public Company Limited 114

Statement of Cash Flows (Continue)

Changes in operating assets And liabilities : (Increase) decrease in accounts and notes receivable-trade Increase in amounts due from, advances and short-term loans to related parties (Increase) decrease in inventories Increase in materials and supplies Increase in other current assets Increase in prepaid expenses Increase in advance payment for gas purchased Increase in accrued income (Increase) decrease in other accounts receivable Increase in advances to related parties (Increase) decrease in other assets Increase in income tax payable Increase (decrease) in accrued Appropriation to the Ministry of Finance Increase in accounts payable-trade Increase (decrease) in amounts due to related parties Increase (decresae) in accrued expenses Increase in other current liabilities Increase in deposits of LPG cylinders Increase (decrease) in Pension fund Increase (decrease) in other Accounts payable Increase in other liabilities Prior year appropriation to the Ministry of Finance Net cash provided by (used in) Operating activites

(translation) For the years then ended December 31, 2001 and 2000 Unit : Million Baht Consolidated The Company 2001 2000 2001 2000

5,586.82

(8,544.08)

5,878.78

(8,462.75)

(584.85) 2,192.43 (411.57) (132.07) (145.17)

(2,447.78) (309.77) (31.85) (1,190.69) (7.93)

(838.26) 2,193.14 (39.25) (19.09) (146.27)

(2,449.83) (317.26) (2.49) (1,169.32) (6.05)

(18,530.87) (3,088.48)

(8,975.07) (3,963.21)

(22,716.86) (3,087.50)

(11,416.24) (3,994.48)

(3,980.18)

679.22

(3,894.76)

735.61

(281.61) 1,339.75

(132.33) (123.01) 1,690.43

8.16 1,032.37

(132.33) (6.79) -

(14.33) 7,271.55

126.00 7,118.94

(14.33) 6,241.31

126.00 6,811.44

(1,739.86)

1,914.60

(668.05)

3,344.19

263.32 743.80 178.64 (3.13)

1,568.73 1,672.26 271.91 0.53

(923.65) 986.08 178.64 (3.13)

896.75 1,914.37 271.91 0.53

4,826.44 843.13

(1,915.67) 7.72

4,827.31 966.50

(1,925.35) 36.29

(7,029.00) (12,695.24)

(3,897.60) (16,488.65)

(7,029.00) (17,067.86)

(3,897.60) (19,643.40)

26,016.14

18,513.37

5,509.44

4,077.40

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Annual Report

○

115 2001

(translation) Statement of Cash Flows (Continue)

Cash Flows from Investing Activities Proceeds from disposal of Property, plant and Equipment Payment of property, plant and equipment Payment of intangible assets Payment of long-term investments Cash refund from investments in other companies Increase in short-term investments Cash received from short-term investments Dividend received Net cash used in investing activities Cash Flows from Financing Activities Cash received from issuing bond Cash received from short-term loans Cash received from issuing ordinary shares Cash received from share Premium Cash received from note payable Repayment of long-term loans Repayment of bond Repayment of short-term loans Repayment of note payable Payment of liabilities from finance leases Increase (Decrease) in bank overdrafts Dividend paid Bond issue expense Net cash provided by financing activities Effects from exchange rate in cash and cash equivalents Increase in loss from foreign currency translation Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and Cash Equivalents The End of The Period Supplemental Cash Flows Information Cash Paid During The Period Interest expensed Income taxes

For the years then ended December 31, 2001 and 2000 Unit : Million Baht Consolidated The Company 2001 2000 2001 2000 4.91

1.47

4.90

1.47

(9,596.52) (332.67) (17,380.20)

(9,797.12) (346.65) (15,951.08)

(2,572.98) (110.62) (7,707.78)

(6,642.17) (170.97) (14,591.06)

28.19 (29,650.55)

4.29 13.37

28.19 (29,650.55)

4.29 13.37

201.12 618.43 (56,107.29)

180.21 (25,895.51)

201.12 1,810.92 (37,996.80)

478.34 (20,906.73)

19,000.00 9,181.63

27,300.00 7,192.19

19,000.00 9,181.63

27,300.00 7,192.19

7,972.46 17,992.83 1,700.00 (15,808.62) (3,315.00) (2,741.59) (1,700.00)

(7,593.59) (5,842.00) (9,212.07) -

7,972.46 17,992.83 1,700.00 (12,993.73) (3,315.00) (2,741.59) (1,700.00)

(5,715.64) (5,842.00) (9,212.07) -

(69.93) (347.89) (763.08) -

(15.37) 325.65 (189.84) (0.25)

(69.93) (347.89) -

(15.37) 325.65 -

31,100.81

11,964.72

34,678.78

14,032.76

(167.47)

260.76

14.48

2.88

(73.21)

(79.76)

768.98

4,763.58

2,205.90

(2,793.69)

22,698.57

17,654.24

5,824.26

8,617.95

23,467.55

22,417.82

8,030.16

5,824.26

10,269.27 3,871.64

9,794.11 2,038.49

8,549.74 -

7,974.76 -

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PTT Public Company Limited 116

Glossary of Technical Terms

○

BBL or Bbls

Barrel

Bcf

Billion cubic feet

BOE

Barrels of oil equivalent

BOED

Barrels of oil equivalent per day

btu

British Thermal Units, a universal measurement of energy.

btu : scf

British Thermal Units : standard cubic feet

B/MMbtu

Baht/Million British thermal units

JDA

Joint Development Area (Malaysia-Thailand); Block A-18, B-17 and C-19

Kboe/d

Thousand of barrels of oil equivalent per day

Kbd or KBbl/d

Thousand barrels per day

LNG

Liquefied Natural Gas

LPG

Liquefied Petroleum Gas

MMBOE

Million barrels of oil equivalent

MMSCF

Million standard cubic feet

MMbtu

Million British thermal units

MMcf/d

Million cubic feet per day

NGL

Natural Gas Liquids

tonnes

Metric tonnes. A metric ton is equal to 1,000 kilograms, or approximately 2,204.6 pounds

Volume per day

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