GULF ENERGY DEVELOPMENT PUBLIC COMPANY LIMITED CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 31 DECEMBER 2017

Transcription

1 GULF ENERGY DEVELOPMENT PUBLIC COMPANY LIMITED CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS 31 DECEMBER 2017

2 Independent Auditor s Report To the shareholders and the Board of Directors of Gulf Energy Development Public Company Limited My opinion In my opinion, the consolidated of Gulf Energy Development Public Company Limited (the Company) and its subsidiaries (the Group) and the separate of the Company present fairly, in all material respects, the consolidated and separate financial position of the Group and of the Company as at 31 December 2017, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with Thai Financial Reporting Standards (TFRSs). What I have audited The consolidated and the separate comprise: the consolidated and separate statements of financial position as at 31 December 2017; the consolidated and separate statements of comprehensive income for the year then ended; the consolidated and separate statements of changes in equity for the year then ended; the consolidated and separate statements of cash flows for the year then ended; and the notes to the consolidated and separate, which include a summary of significant accounting policies. Basis for opinion I conducted my audit in accordance with Thai Standards on Auditing (TSAs). My responsibilities under those standards are further described in the Auditor s responsibilities for the audit of the consolidated and separate financial statements section of my report. I am independent of the Group and the Company in accordance with the Federation of Accounting Professions under the Royal Patronage of his Majesty the King s Code of Ethics for Professional Accountants together with the ethical requirements that are relevant to my audit of the consolidated and separate, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Key audit matters Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the consolidated and separate of the current period. I determined key audit matters as financial derivative and hedge accounting, and adjustment to electricity sales of an associate in accordance with Thai Financial Reporting Interpretations 4: Determining whether and arrangement contains a lease. These matters were addressed in the context of my audit of the consolidated and separate as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

3 Key audit matter How my audit addressed the key audit matter Financial derivative and hedge accounting. Refer to accounting policy 2.5 Financial instruments - Accounting for financial derivatives and hedge accounting and note 4 Financial risk management. The Group entered into financial derivative contract for foreign currency hedge relating to power plant construction. As at 31 December 2017, there were financial assets of Baht 3.60 million and financial liabilities of Baht million resulting from these agreements. The Group initially recognises the financial derivatives contract for foreign currency hedge at fair value on the agreement date. The change in the fair value is subsequently recognised as a separate item in other comprehensive income in the consolidated statement of comprehensive income. The Group recognises the change in fair value as construction in progress in the consolidated statement of financial position on the contract settlement date. I evaluated and performed effectiveness testing on the financial derivative contracts for foreign currency hedge by performing the following procedures: Select samples relating to the financial derivative contract, such as the hedge documentation and foreign currency forward contract. Recalculate the fair value of the financial derivative contract and test the hedge effectiveness. Confirm the ending balance from counter parties to ensure that the financial derivative contract is complete. Test the information that management used to calculate the fair value of the financial derivative contract with information from the market and assess the reason for variance against the financial institutions valuation result. I found that judgments made by management and the recognition based on hedge accounting of the foreign currency forward contract, including the fair value of the financial derivative contract, are appropriate based on the existing evidence. This matter is significant as the financial derivative contract for foreign currency hedge has a significant value, and the recognition of hedge accounting requires significant management judgment in recording the information under each agreement. Assumptions are also required to calculate the fair value of the financial derivative contract in accordance with Thai Financial Reporting Standard 13: Fair value measurement. Management must also assess the hedge effectiveness, which is the degree to which changes in the fair value or cash flows of the hedge instrument are offset by changes in the fair value or cash flows of the hedging item. The fair value measurement of the financial derivative is classified as level II information, which is information other than the price in the active market for identical assets or liabilities, which is observable for the asset or liability, either directly or indirectly. Level II information may be subject to adjustment when measuring the fair value of the financial derivative agreement.

4 Key audit matter How my audit addressed the key audit matter Adjustment to electricity sales of an associate in accordance with Thai Financial Reporting Interpretations 4: Determining whether an arrangement contains a lease. According to accounting policy No. 2.3 Group Accounting - Investment in subsidiaries and associates and in joint arrangements, and Note 14.2 Investment in an associate, the Group holds registered ordinary shares representing 40% of the authorised share capital of Gulf JP Company Limited, which is an associate. This investment was recognised using the equity method. The Group recognised net profit after tax of the associate for the year ended 31 December 2017 of Baht 3, million and net assets of the associate in proportion to the Group s shareholding of Baht 20, million. Gulf JP Company Limited is a limited company and prepares its in accordance with Thai Financial Reporting Standard for Non-Publicly Accountable Entities (TFRS for NPAEs). To record its share of profit from Gulf JP Company Limited in the consolidated, the Group has to make adjustments based on its accounting policies and in accordance with the relevant Thai Financial Reporting Standards before the Group records the equity from investment based on the of the associate. The significant adjustments of the associate, which impact the consolidated, are adjustments to the revenue from electricity sales of certain power plants which they sell solely to the Electricity Generating Authority of Thailand, and portions of accounts receivable from electricity sales of an associate in accordance with Thai Financial Reporting Interpretations 4: Determining whether an arrangement contains a lease. The adjustments are as follows: Gulf JP Company Limited is a significant associate of the Group and is audited by another auditor. I planned the overall audit of the Group and communicated with another auditor about this matter. I also performed the following audit procedures: Review working papers and ask about identified audit risks, audit procedures and audited results. Review the adjustments due to differences in accounting standards, especially Thai Financial Reporting Interpretation Standard 4: Determining whether an arrangement contains a lease. Assess the auditor s results to determine whether there are sufficient and appropriate audit working papers. The associate s auditor performed the following audit procedures for the revenue process: Test the control over the revenue process, including control over revenue recognition in accordance with Power Purchase Agreement. Perform analytical procedures on significant changes in gross profit percentage and sales transactions. Test cut-off of revenue from electricity sales. Test the adjustment items related to electricity sales and the account receivable identified as a long-term lease agreement. I found that the adjustment items related to revenue and the account receivable from electricity sales identified as a long-term lease agreement are appropriate and comply with the Group s accounting policies. transfer assets under a finance lease to finance lease receivable measured at the present value of the minimum lease payment. record unearned finance income, which is the difference between the total receivable and the present value of the receivable. recognise lease income over the term of the lease using the net investment method, which reflects a constant rate of return. This matter is significant as the adjustment items are significant and complex. I undertook procedures to make sure the associate applied the accounting policies in accordance with Thai Financial Reporting Standards, as adopted by the Group.

5 Other information The directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated and separate and my auditor s report thereon. The annual report is expected to be made available to me after the date of this auditor's report. My opinion on the consolidated and separate does not cover the other information and I will not express any form of assurance conclusion thereon. In connection with my audit of the consolidated and separate, my responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate or my knowledge obtained in the audit, or otherwise appears to be materially misstated. When I read the annual report, if I conclude that there is a material misstatement therein, I am required to communicate the matter to the audit committee. Responsibilities of the directors for the consolidated and separate The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with TFRSs, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate that are free from material misstatement, whether due to fraud or error. In preparing the consolidated and separate, the directors are responsible for assessing the Group and the Company s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and the Company or to cease operations, or has no realistic alternative but to do so. The audit committee assists the directors in discharging their responsibilities for overseeing the Group and the Company s financial reporting process. Auditor s responsibilities for the audit of the consolidated and separate My objectives are to obtain reasonable assurance about whether the consolidated and separate as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with TSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements. As part of an audit in accordance with TSAs, I exercise professional judgment and maintain professional scepticism throughout the audit. I also: Identify and assess the risks of material misstatement of the consolidated and separate, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group and the Company s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

6 Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group and the Company s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor s report to the related disclosures in the consolidated and separate or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor s report. However, future events or conditions may cause the Group and the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated and separate, including the disclosures, and whether the consolidated and separate represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion. I communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide the audit committee with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. From the matters communicated with the audit committee, I determine those matters that were of most significance in the audit of the consolidated and separate of the current period and are therefore the key audit matters. I describe these matters in my auditor s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. PricewaterhouseCoopers ABAS Ltd. Somchai Jinnovart Certified Public Accountant (Thailand) No Bangkok 26 February 2018

7 Statements of Financial Position As at 31 December 2017 Assets Consolidated Separate Notes Baht Baht Baht Baht Current assets Cash and cash equivalents 9 20,222,174,961 2,765,570,440 14,747,550, ,675,847 Deposits at a financial institution used as collateral 10 90,000, Current portion of financial derivative assets 3,578,847 36,772, Trade accounts receivable ,659,512, , Trade accounts receivable from related parties 11.2, 13-35,000, ,368, ,400,000 Current portion of amount due from related parties , ,500 Other accounts receivable 235,963 1,623, ,776 1,673,884 Prepaid expenses 118,024, ,631,104 7,260,154 3,440,889 Short-term loans to related parties 13-39,590, ,290,000 Current portion of advance payments under service agreements 98,813, Current portion of advance payments to related parties ,982, ,188,768 Current portion of interest receivable from related parties 13-8,356, ,806 18,889,142 Spare parts 854, Available-for-sale investments ,801,728 1,184,651, ,054, ,069,920 Refundable value added tax 1,764,390,383 1,187,520,866 5,701,930 - Other current assets 163,408, ,469,506 48,722,545 10,260,260 Total current assets 24,943,796,158 5,514,100,841 15,400,008,271 1,247,101,210 Director Date The notes to the consolidated on pages 18 to 113 are an integral part of these. 6

8 Statements of Financial Position As at 31 December 2017 Assets (continued) Consolidated Separate Notes Baht Baht Baht Baht Non-current assets Deposits at a financial institution used as collateral 10 86,974, ,500, Financial derivative assets 17,936 33,839, Amount due from related parties ,867,010 37,358,975 Prepaid expenses 9,414,990 22,099, Refundable value added tax 9,686, Advance payments to related parties ,005, ,113,802 Long-term loans to related parties 13 37,485,000-2,075,282,017 2,037,797,017 Interest receivable from related parties , ,832, ,896,925 Available-for-sale investments 12 1,984,969,036 1,968,444, Investment in subsidiaries, net ,891,714,033 2,080,565,292 Investment in an associate ,435,620,951 18,501,651,068 17,687,559,481 17,687,559,481 Investment in joint venture ,983,444-6,002,493 - Land deposit, net 4,996,125 23,148, Advance payments for land and power plant construction 1,817,779,230 2,846,196, Advance payments under service agreements 190,123,284 92,998, Investment property, net 15 97,595, ,610,681 29,704,500 44,719,594 Property, plant and equipment, net 16 50,547,133,540 29,912,930,743 1,928,779 1,063,748 Intangible assets, net 17 22,409,086 15,700, , ,196 Deferred financing fee 129,286, ,203, Deferred tax assets ,171, ,831,569 24,292,755 12,383,553 Other non-current assets 10,967,085 9,344,177 8,619,189 5,421,750 Total non-current assets 75,708,145,881 54,301,499,859 26,031,327,426 22,184,466,333 Total assets 100,651,942,039 59,815,600,700 41,431,335,697 23,431,567,543 The notes to the consolidated on pages 18 to 113 are an integral part of these. 7

9 Statements of Financial Position As at 31 December 2017 Liabilities and equity Consolidated Separate Notes Baht Baht Baht Baht Current liabilities Current portion of financial derivative liabilities 60,005, ,045, Trade accounts payable 504,913, Other accounts payable 285,787,437 48,701,896 67,423,039 7,687,758 Amount due to related parties 13 6,305, ,424 5,345, ,424 Share subscription payable ,255,450 3,255,450 Accounts payable for power plant construction 2,206,722,121 1,485,676, Interest payable 56,291, ,047,178 64,174, ,624,110 Short-term loans from financial institutions ,000, Short-term loans - 279,300, Current portion of long-term loans from financial institutions, net 20 2,460,245, ,010, Current portion of debentures, net 21-6,991,641,102-6,991,641,102 Current portion of bills of exchange 22-1,991,190,934-1,991,190,934 Accrued expenses 746,966, ,447, ,083, ,491,083 Corporate income tax payable - 26,816,970-25,619,415 Other current liabilities 147,725,487 66,006,399 10,803,941 14,676,849 Total current liabilities 7,046,961,387 12,007,006, ,086,573 9,362,309,125 Non-current liabilities Financial derivative liabilities 7,022,807 66,257, Long-term loans from financial institutions, net 20 47,914,009,587 34,397,950, ,323, ,325,114 Debentures, net 21 5,983,541,521 5,983,541,521 5,983,541,521 5,983,541,521 Bills of exchange 22-3,484,380,881-3,484,380,881 Retention 47,997,330 13,546, Provision for decommissioning costs ,074,716 6,977, Deferred tax liabilities ,207 10,537, Employee benefit obligations ,973,567 63,012,983 92,254,367 63,012,983 Total non-current liabilities 54,256,729,735 44,026,204,914 7,064,119,674 10,525,260,499 Total liabilities 61,303,691,122 56,033,211,300 7,417,206,247 19,887,569,624 The notes to the consolidated on pages 18 to 113 are an integral part of these. 8

10 Statements of Financial Position As at 31 December 2017 Liabilities and equity (continued) Consolidated Separate Notes Baht Baht Baht Baht Equity Share capital 25 Authorised share capital 2,133,300,000 ordinary shares at a par value of Baht 5 each (2016: 310,000,000 ordinary shares at a par value of Baht 10 each 10,666,500,000 3,100,000,000 10,666,500,000 3,100,000,000 Issued and paid-up share capital 2,133,300,000 ordinary shares at paid-up of Baht 5 each (2016: 40,000,000 ordinary shares at paid-up of Baht 10 each and 270,000,000 ordinary shares of Baht 8.87 each) 10,666,500,000 2,795,000,000 10,666,500,000 2,795,000,000 Share premium 20,889,295,058-20,889,295,058 - Surplus from business combination under common control (316,239,277) (316,239,277) - - Appropriated retained earnings - legal reserve 26 86,512,524-86,512,524 - Unappropriated retained earnings (deficits) 1,935,038,462 (1,409,182,780) 2,371,169, ,121,743 Changes in proportion of investment in subsidiaries 1,432,424,227 1,479,602, Other components of equity 28 (128,716,475) (228,123,404) 652, ,176 Total equity attributable to owners of the parent 34,564,814,519 2,321,056,623 34,014,129,450 3,543,997,919 Non-controlling interests 14.1, 27 4,783,436,398 1,461,332, Total equity 39,348,250,917 3,782,389,400 34,014,129,450 3,543,997,919 Total liabilities and equity 100,651,942,039 59,815,600,700 41,431,335,697 23,431,567,543 The notes to the consolidated on pages 18 to 113 are an integral part of these. 9

11 Statements of Comprehensive Income Consolidated Separate Notes Baht Baht Baht Baht Revenue from sales 4,078,442,878 5,294, Revenue from management fee 272,000, ,693,406 1,028,291,923 1,208,373,406 Cost of sales (3,096,903,263) (2,594,587) - - Cost of management fee (189,343,313) (232,468,309) (326,158,466) (476,277,463) Gross profit 1,064,196,302 5,924, ,133, ,095,943 Other income 29 42,818,453 18,349,590 43,628,872 40,907,241 Interest income 44,708,899 19,722, ,970, ,215,666 Dividend income 109,434, ,038,544 2,059,462,625 45,514,358 Gain (loss) on exchange rate, net 994,874,225 (32,018,839) 29,973 33,921 Administrative expenses (957,387,760) (593,657,546) (480,029,108) (177,005,394) Finance costs 32 (1,427,678,494) (792,291,951) (747,626,733) (461,366,628) Share of net profit from an associate and a joint venture 14.2, ,981,664,320 1,436,567, Profit before corporate 3,852,630, ,634,304 1,723,569, ,395,107 income tax benefits (expenses) Corporate income tax benefits (expenses) 30 54,293,935 46,961,092 6,680,702 (61,614,358) Profit for the year 3,906,924, ,595,396 1,730,250, ,780,749 Other comprehensive income (expenses), net of corporate income taxes Items that will not be reclassified to profit or loss Actuarial losses (20,689,859) - (20,689,859) - Items that will be reclassified to profit or loss, net of corporate income taxes Change in value of available-for-sale investments 33,445,106 (22,315,717) 4,787,596 2,455,936 Reclassification adjustments to profit and loss of available-for-sale investments (18,436,697) (5,775,160) (5,011,742) (1,579,760) Change in value of cash flow hedges 12,555,383 (362,325,426) - - Reclassification adjustments to profit and loss of cash flow hedges 142,509,239 (16,783,237) - - Currency translation differences 103,382 (89,525) - - Share of other comprehensive income (expenses) of an associate accounted for using the equity method 8,200,515 (13,907,869) - - Other comprehensive income (expenses) for the year, net of corporate income taxes 157,687,069 (421,196,934) (20,914,005) 876,176 Total comprehensive income (expenses) for the year 4,064,611,641 (200,601,538) 1,709,336, ,656,925 The notes to the consolidated on pages 18 to 113 are an integral part of these. 10

12 Consolidated Statements of Comprehensive Income Consolidated Separate Note Baht Baht Baht Baht Profit attributable to: Owners of the parent 3,451,423, ,558,586 1,730,250, ,780,749 Non-controlling interests 455,500,947 (196,963,190) - - 3,906,924, ,595,396 1,730,250, ,780,749 Total comprehensive income (expenses) attributable to: Owners of the parent 3,530,140, ,275,386 1,709,336, ,656,925 Non-controlling interests 534,470,946 (351,876,924) - - 4,064,611,641 (200,601,538) 1,709,336, ,656,925 Earnings per share for the owners of the parent Basic earnings per share The notes to the consolidated on pages 18 to 113 are an integral part of these. 11

13 Statements of Changes in Equity Consolidated Baht Attributable to owners of the parent Other components of equity Retained earning Other comprehensive income (expenses) Surplus from Share of other business Appropriated Unappropriated comprehensive Issued and combination retained retained Changes in proportion Currency Available- income Total other Nonpaid-up under earnings - earnings of investment translation for-sale Cash flow (expenses) components Total owners controlling Notes share capital Share premium common control legal reserve (deficits) in subsidiaries Actuarial losses differences investments hedges of an associate of equity of the parent interests Total equity Opening balance as at 1 January ,380,000,000 - (316,239,277) - (1,826,741,366) 1,417,367,297-67,571 (70,458,709) 105,113,776 3,437,158 38,159,796 1,692,546, ,437,005 2,494,983,455 Issuance of new ordinary shares ,080, ,080,000 Call for additional paid-up 25, ,000, ,000, ,584, ,584,828 Surplus from changes in proportion of investment in subsidiaries ,234, ,234,787 58,281, ,516,000 Dividend paid of subsidiaries (173,345) (173,345) Total comprehensive income (expenses) for the year ,558, (89,525) (28,090,877) (224,194,929) (13,907,869) (266,283,200) 151,275,386 (351,876,924) (200,601,538) Closing balance as at 31 December ,795,000,000 - (316,239,277) - (1,409,182,780) 1,479,602,084 - (21,954) (98,549,586) (119,081,153) (10,470,711) (228,123,404) 2,321,056,623 1,461,332,777 3,782,389,400 Opening balance as at 1 January ,795,000,000 - (316,239,277) - (1,409,182,780) 1,479,602,084 - (21,954) (98,549,586) (119,081,153) (10,470,711) (228,123,404) 2,321,056,623 1,461,332,777 3,782,389,400 Issuance of new ordinary shares 25 7,566,500, ,566,500,000 1,100,479,700 8,666,979,700 Call for additional paid-up 25, ,000, ,000,000 1,640,158,109 1,945,158,109 Share premium 25-20,889,295, ,889,295,058-20,889,295,058 Legal reserve ,512,524 (86,512,524) Surplus (discount) from changes in proportion of investment in subsidiaries (47,177,857) (47,177,857) 47,177,842 (15) Transfer actuarial losses (20,689,859) - 20,689, ,689, Dividend paid of subsidiaries (182,976) (182,976) Total comprehensive income (expenses) for the year ,451,423,625 - (20,689,859) 103,382 14,876,161 76,226,871 8,200,515 78,717,070 3,530,140, ,470,946 4,064,611,641 Closing balance as at 31 December ,666,500,000 20,889,295,058 (316,239,277) 86,512,524 1,935,038,462 1,432,424,227-81,428 (83,673,425) (42,854,282) (2,270,196) (128,716,475) 34,564,814,519 4,783,436,398 39,348,250,917 The notes to the consolidated on pages 18 to 113 are an integral part of these. 12

14 Statements of Changes in Equity Separate Baht Attributable to owners of the parent Other components of equity Retained earning Other comprehensive income (expenses) Appropriated Issued and retained Unappropriated Available- Total other paid-up earnings - retained for-sale components Notes share capital Share premium legal reserve earnings Actuarial losses investments of equity Total equity Opening balance as at 1 January ,380,000, ,340, ,846,340,994 Call for additional paid-up ,000, ,000,000 Total comprehensive income for the year ,780, , , ,656,925 Closing balance as at 31 December ,795,000, ,121, , ,176 3,543,997,919 Opening balance as at 1 January ,795,000, ,121, , ,176 3,543,997,919 Issuance of new ordinary shares 25 7,566,500, ,566,500,000 Call for additional paid-up ,000, ,000,000 Share premium 25-20,889,295, ,889,295,058 Legal reserve ,512,524 (86,512,524) Transfer actuarial losses (20,689,859) 20,689,859-20,689,859 - Total comprehensive income (expenses) for the year ,730,250,478 (20,689,859) (224,146) (20,914,005) 1,709,336,473 Closing balance as at 31 December ,666,500,000 20,889,295,058 86,512,524 2,371,169, , ,030 34,014,129,450 The notes to the consolidated on pages 18 to 113 are an integral part of these. 13

15 Statements of Cash Flows Consolidated Separate Notes Baht Baht Baht Baht Cash flows from operating activities Profit for the year before corporate income taxes 3,852,630, ,634,304 1,723,569, ,395,107 Adjustment to reconcile profit for cash generated from (used in) operations - Finance costs 32 1,427,678, ,291, ,626, ,366,628 - Interest income (44,708,899) (19,722,026) (145,970,690) (163,215,666) - Dividend income (109,434,692) (111,038,544) (2,059,462,625) (45,514,358) - Gain on disposal of investments in a subsidiary 29 (123,762) - - (7,498,775) - Gain on disposal of available-for-sale investments (23,045,872) (7,218,950) (6,264,677) (1,974,700) - Impairment loss on assets 33,167,644-21,333, Write-off bad debts ,254, Loss from write-off property, plant and equipment Depreciation and amortisation 16, ,496,632 4,533, , ,510 - Employee benefit expenses 24 12,098,261 7,848,586 3,379,061 7,848,586 - Share of net profit from an associate and a joint venture 14.2, 14.3 (3,981,664,320) (1,436,567,710) Net unrealised (gains) losses on exchange rate (869,572,262) 129,554,271 52,778 - Cash flows before changes in working capital 667,521,861 (466,683,982) 305,871, ,701,146 Changes in working capital (excluding impact from acquisition and disposal of subsidiaries) - Trade accounts receivable (1,658,598,212) 79,354, Trade accounts receivable from related parties 35,000,000 12,482,239 32,000 (166,190,000) - Amounts due from related parties - 29,975,375 (37,508,035) 14,452,869 - Other accounts receivable 1,387,805 (1,488,876) 1,487,108 (695,395) - Prepaid expenses 1,291,063 14,998,182 (3,927,934) (1,155,976) - Spare parts (854,132) Refundable value added tax (586,556,485) (860,433,594) (5,701,930) - - Other current assets 22,847,969 (27,760,896) (1,522,645) (798,984) - Advance payments under service agreements (195,938,111) Other non-current assets (1,622,908) (2,596,410) (3,197,439) (1,000) - Trade accounts payable 504,913, Other accounts payable 221,931,454 (94,046,874) 44,528,261 (5,942,673) - Amount due to related parties 6,182, ,424 5,223,379 (116,515) - Accrued expenses 244,802, ,394,600 (28,167,222) 170,925,112 - Other current liabilities 81,719,088 (13,556,708) (3,872,908) (210,213) Cash generated from (used in) operating activities (655,972,762) (1,060,240,144) 273,243, ,968,371 - Corporate income tax paid (60,678,604) (100,115,217) (57,317,378) (88,560,995) Net cash generated from (used in) operating activities (716,651,366) (1,160,355,361) 215,926, ,407,376 The notes to the consolidated on pages 18 to 113 are an integral part of these. 14

16 Statements of Cash Flows Consolidated Separate Notes Baht Baht Baht Baht Cash flows from investing activities Deposits at a financial institution used as collateral 10 (4,474,400) Proceeds from interest 46,716,706 29,536, ,610, ,639,751 Proceeds from dividend 2,168,348, ,038,544 2,059,462,625 45,514,358 Payments for available-for-sales investments 12 (6,686,608,776) (3,350,000,000) (2,137,926,373) (1,050,000,000) Proceeds from available-for-sales investments 7,069,608,776 2,610,002,186 2,172,926, ,000,000 Payments for ordinary shares paid-up in subsidiaries (3,817,717,000) (1,260,000,000) Proceeds from sales of investments in a subsidiary ,500 8,498,745 Payments for investment in an associate (14,398,559,481) - (14,398,559,481) Payments for ordinary shares paid-up in a joint venture 14.3 (5,880,000) - (5,880,000) - Advance payments to subsidiaries - - (11,004,831) (52,693,500) Proceeds from advance payments to subsidiaries ,166,923 20,000,000 Advance payments to a joint venture (242,745) - (242,745) - Proceeds from advance payments to a joint venture 866, ,745 - Proceeds from loans to subsidiaries ,200,000 - Payments on loans to subsidiaries (229,500,000) - Payments on loans to a joint venture 13 (37,485,000) - (37,485,000) (178,500,000) Proceeds from short-term loans to related parties 13 39,590,000 20,000,000 39,590,000 60,000,000 Proceeds from long-term loans to related parties - 115,000,000-75,000,000 Payments for losing control of subsidiaries, net (652,695) (37,690,905) - - Proceeds from land deposit - 53,392,500-53,392,500 Advance payments for land and power plant constructions (1,390,145,765) (2,479,998,867) - - Purchases of property, plant and equipment (16,099,319,798) (16,535,836,700) (14,860) (565,542) Payments for borrowing costs capitalised in property, plant and equipment (1,517,165,385) (866,720,937) - - Purchases of intangible assets (9,352,518) (1,409,230) - - Net cash used in investing activities (16,426,196,300) (34,731,246,048) (1,148,443,874) (15,872,273,169) The notes to the consolidated on pages 18 to 113 are an integral part of these. 15

17 Statements of Cash Flows Consolidated Separate Notes Baht Baht Baht Baht Cash flows from financing activities Proceeds from issuing of debentures 21-13,000,000,000-13,000,000,000 Payments for debentures 21 (7,000,000,000) - (7,000,000,000) - Proceeds from short-term loans from financial institutions 19 7,887,000,000-6,000,000,000 - Payments for short-term loans from financial institutions 19 (7,315,000,000) - (6,000,000,000) - Proceeds from changes in ownership interest in indirect subsidiaries that do not result in a loss of control - 120,516, Proceeds from long-term loans from financial institutions 17,447,030,358 22,179,319,706-1,000,000,000 Proceeds from short-term loan 220,500, ,500, Payments on short-term loan (499,800,000) (425,000,000) - (425,000,000) Payments on long-term loans from financial institutions (686,915,202) (4,044,069,125) - (4,042,097,017) Payments for interest (924,223,057) (258,726,812) (326,282,738) (112,521,776) Proceeds from issuing of bills of exchange 14,554,039,982 10,982,453,677 14,554,039,982 10,982,453,677 Payments for bills of exchange (20,200,000,000) (5,600,000,000) (20,200,000,000) (5,600,000,000) Payments for other finance costs (403,674,378) (202,513,221) (289,446,033) (150,396,520) Payments for deferred financing fees (22,493,151) (107,975,498) (22,493,151) (6,500,000) Proceeds from additional paid-up capital 25 31,944,137,809 1,367,664,828 29,203,500, ,000,000 Payments for share issuance (398,926,300) - (398,926,300) - Dividend paid to non-controlling interests of a subsidiary 27 (182,976) (173,345) - - Net cash generated from financing activities 34,601,493,085 37,182,996,210 15,520,391,760 15,060,938,364 Net increase (decrease) in cash and cash equivalents 17,458,645,419 1,291,394,801 14,587,874,233 (294,927,429) Cash and cash equivalents at the beginning of the year 2,765,570,440 1,473,902, ,675, ,603,276 Profit (loss) adjustment from foreign exchange translation (2,040,898) 273, Cash and cash equivalents at the end of the year 20,222,174,961 2,765,570,440 14,747,550, ,675,847 The notes to the consolidated on pages 18 to 113 are an integral part of these. 16

18 Statements of Cash Flows Consolidated financial information Separate financial information Note Baht Baht Baht Baht Non-cash transactions Significant non-cash transactions for the years ended 31 December are as follows: Increase in construction in progress as a result of advance payment for construction 2,418,563,371 2,621,257, Increase in property, plant and equipment from payables 2,207,857,721 1,485,676,086 1,135,600 - Increase in construction in progress from retention 47,997,330 13,546, Increase in loan from sale of investment in a subsidiary 13-40,000, Increase in investment property from transfer from property, plant and equipment - 67,891, Increase in assets as a result of provision for decommissioning costs 200,337, Increase in construction in progress from amortisation of deferred financing fees 16,280,094 17,068, Accrued expenses relating to share capital issuance 43,778,642-43,778,642 - The notes to the consolidated on pages 18 to 113 are an integral part of these. 17

19 Notes to the Consolidated and Separate Financial Statements 1 General information Gulf Energy Development Public Company Limited (the Company) is a public company limited. The Company is incorporated and resided in Thailand. The address of its registered office is 87 M Thai Tower 11th Floor, All Seasons Place, Wireless Road, Lumpini, Pathumwan, Bangkok. The Company has registered for a change from a limited company to a public company limited on 25 May The Company is listed on the Stock Exchange of Thailand. For reporting purposes, the Company and its subsidiaries are referred to as the Group. The principal business operation of the Group is to generate and sell electricity, steam and cold water, and other businesses both domestic and international. These consolidated and separate were authorised for issue by the Company s management on 26 February Accounting policies The principal accounting policies applied in the preparation of these consolidated and separate financial statements are set out below: 2.1 Basis of preparation The consolidated and seperate have been prepared in accordance with Thai generally accepted accounting principles under the Accounting Act B.E. 2543, being those Thai Financial Reporting Standards issued under the Accounting Profession Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act. The consolidated and separate have been prepared under the historical cost convention except as disclosed in the accounting policies below. The preparation of in conformity with Thai generally accepted accounting principles requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated and separate are disclosed in Note 5. Comparative figures have been adjusted to conform with presentation in the current year where the effects are disclosed in Note 3. An English version of the consolidated and separate have been prepared from the statutory that are in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language statutory shall prevail. 18

20 Notes to the Consolidated and Separate Financial Statements 2 Accounting policies (continued) 2.2 Revised financial reporting standards and related interpretations Revised financial reporting standards are effective for annual periods beginning on or after 1 January 2017, which have significant changes and are relevant to the Group. TAS 1 (revised 2016) TAS 19 (revised 2016) TAS 27 (revised 2016) TAS 28 (revised 2016) TFRS 10 (revised 2016) Presentation of Employee benefits Separate Investments in associates and joint ventures Consolidated TAS 1 (revised 2016), the amendments provide clarifications on a number of issues, including: - Materiality - an entity should not aggregate or disaggregate information in a manner that obscures useful information. Where items are material, sufficient information must be provided to explain the impact on the financial position or performance. - Disaggregation and subtotals - line items specified in TAS 1 may need to be disaggregated where they are relevant to an understanding of the entity's financial position or performance. There is also new guidance on the use of subtotals. - Notes to - the standard confirms that the notes do not need to be presented in a particular order. - Other Comprehensive Income arising from investments accounted for under the equity method - the share of other comprehensive income arising from equity-accounted investments is grouped based on whether the items will or will not subsequently be reclassified to profit or loss. Each group should then be presented as a single line item in the statement of other comprehensive income. TAS 19 (revised 2016), the amendments clarify that when determining the discount rate for post-employment benefit obligations, it is the currency that the liabilities are denominated in is more important, not the country where they arise. TAS 27 (revised 2016), the amendments allow an entity a policy choice to account for investments in subsidiaries, joint ventures and associates in its separate using the equity method as described in TAS 28 (revised 2016) in addition to measurement at cost or at fair value (when announced). The election can be made independently for each category of investment (subsidiaries, joint ventures and associates). Entities wishing to change to the equity method must do so retrospectively. TAS 28 (revised 2016), the amendments allow an entity which is not an investment entity, but has an interest in an associate or joint venture which is an investment entity, a policy choice when applying the equity method of accounting. The entity may choose to retain the fair value measurement applied by the investment entity associate or joint venture, or to unwind the fair value measurement and instead perform a consolidation at the level of the investment entity associate or joint venture. TFRS 10 (revised 2016), the amendments clarify that: 1) the exception from preparing consolidated is also available to intermediate parent entities which are subsidiaries of investment entity and 2) an investment entity should consolidate a subsidiary which is not an investment entity and whose main purpose and activity is to provide services in support of the investment entity's investment activities. The Group s management assessed and considered that the above revised standards do not have significant impact on the Group. 19

21 Notes to the Consolidated and Separate Financial Statements 2 Accounting policies (continued) 2.2 Revised financial reporting standards and related interpretations (continued) Revised financial reporting standards are effective for annual periods beginning on or after 1 January 2018, which have significant changes and are relevant to the Group. The Group has not yet adopted these revised standards. TAS 7 (revised 2017) TAS 12 (revised 2017) TFRS 12 (revised 2017) Statement of cash flows Income taxes Disclosure of interests in other entities TAS 7 (revised 2017), the amendments require additional disclosure of changes in liabilities arising from financing activities. This includes changes arising from cash and non-cash transactions. TAS 12 (revised 2017), the amendments clarify the followings which relate to deferred tax accounting when the carrying amount of an asset measured at fair value is less than its tax base: - A temporary difference exists whenever the carrying amount of an asset measured at fair value is less than its tax base at the end of the reporting period. - An entity can assume that it will recover an amount higher than the carrying amount of an asset to estimate its future taxable profit. - Where the tax law restricts the source of taxable profits against which particular types of deferred tax assets can be recovered, the recoverability of the deferred tax assets can only be assessed in combination with other deferred tax assets of the same type. - Tax deductions resulting from the reversal of deferred tax assets are excluded from the estimated future taxable profits. TFRS 12 (revised 2017), the amendments clarify that the disclosure requirements under TFRS 12 apply to interests in entities that are classified as held-for-sale in the scope of TFRS 5 (revised 2017), except for the summarised financial information. The Group s management assessed and considered that the above revised standards will not have a material impact on the Group, except for disclosure. 2.3 Group accounting - investments in subsidiaries and associates and in joint arrangements (a) Subsidiaries Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns though its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The Group applies the acquisition method to account for business combinations except for business combination under common control. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest s proportionate share of the acquiree s net assets. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date. Any gains or losses arising from such re-measured are recognised in profit or loss. Any contingent consideration to be transferred by the Group is regcognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in profit or loss. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity. 20

22 Notes to the Consolidated and Separate Financial Statements 2 Accounting policies (continued) 2.3 Group accounting - investments in subsidiaries and associates and in joint arrangements (continued) (a) Subsidiaries (continued) The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recognised as goodwill. If the total of consideration transferred, non-controlling interest recognise and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit or loss. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. (b) Transactions with non-controlling interests The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recognised in equity. Gains or losses on disposals to non-controlling interests are also recognised in equity. (c) Disposal of subsidiaries When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequent accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. (d) Associates Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. (e) Joint venture Joint arrangement is classified as joint venture whereby the Group has rights to the net assets of the arrangement. Interests in joint ventures are accounted for using the equity method. 21