SET Announcements

Report of Year 2000 Compliance Project THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED Business: Energy Head Office: 38 Srinakarin Road, Prawet, Bangkok 10260 Telephone: 301-2700 Facsimile: 301-2859 Report on the status of the Year 2000 Compliance Project, the first report (as of June 30, 1998). Year 2000 Compliance Project I. PROJECT EXECUTION Bangchak has been addressing the Year 2000 problem since the first quarter of 1997 as summarized in the following table: Status 1. Over all Project Management 1.1 Establish a Y2K committee chaired by Completed the Senior Executive Vice President. 1.2 Assign managers and team members directly Completed responsible for Y2K project. 1.3 Implementing the Y2K awareness program. In progress 1.4 Planning and scheduling the overall Y2K In progress project including the controlled plan to achieve the overall objective. 2. Risk Analysis and Impact Assessment Risk analysis, impact assessment, implementation planning,implementation, and validation of all possible equipment are divided into 3 groups according to the nature of the problem. A. IT GROUP A1. APPLICATION SOFTWARE A2. DATABASE A3. NETWORK SYSTEM A4. OPERATING SYSTEM A5. HARDWARE B. NON-IT GROUP B1. REFINERY SYSTEM B2. TERMINAL SYSTEM B3. OTHERS C. SUPPLY CHAIN C1. LOGISTICS C2. MARKETING/OTHERS 2.1 Risk analysis and impact assessment method A. IT Group : Vendor inquiry, test by BCP Completed B. Non-IT Group : Vendor inquiry Completed C. Supply Chain : Questionnaire In progress 2.2 Steps for risk analysis and impact assessment Completed o Inventory list o Risk analysis o Impact assessment (Critical or Non-critical) 2.3 RESULT OF RISK ANALYSIS AND IMPACT ASSESSMENT Y2K COMPLIANCE IMPACT ASSESSMENT YES NO CRITICAL NON CRITICAL A.IT GROUP A1 APPLICATION SOFTWARE - MARKETING & SALES / / - ACCOUNTING / FINANCIAL / / - OIL RECORD / / - HUMAN RESOURCE / / - OTHERS (SMALL SYSTEMS) 14 / A2 DATABASE - ENTERPRISE / / - WORKGROUP / PC / / A3 NETWORK - COMMUNICATION / - SWITCHING / - TELEPHONE / A4 OPERATING SYSTEM - MINI / / - WORKSTATION / / - PC 400 29 / A5 HARDWARE - MINI / / - WORKSTATION / / - PC 400 29 / B.NON-IT GROUP B1 REFINERY / B2 TERMINAL / / B3 OTHERS / / C.SUPPLY CHAIN ---------------------- IN PROGRESS --------------------- REMARKS CRITICAL ITEMS REQUIRE TESTING NUMBER INDICATES QUANTITY 3. Implementation Plan Completed 3.1 Bangchak schedules to have all the critical items (essential to the company's business operations) to be 100% renovated and tested by the end of 1998. The non-critical items are to be completed by the first half of 1999. 3.2 Bangchak already devises a plan for the critical items as shown in the attached document. 3.3 Expense for addressing the Y2K problem is estimated at 49 million baht which consist of 42 million baht for new Accounting / Financial system and 7 million baht for other systems. 4. Implementation and Validation In progress A. IT Group This is the most important group and requires tremendous resources. Currently, the core systems for the business operations, e. g., Accounting / Financial system, are nearly completed. More than 50% works of sales and marketing are completed. For other systems, the work is in progress. B. Non-IT Group From the risk analysis and impact assessment, most of the system is complied with the Y2K. However, the whole refinery system will be tested during the scheduled shut down in the forth quarter 1998. C. Supply Chain Collecting feedback from business partners. 5. Contingency Plan In progress Bangchak has already devised the structure of the contingency plans. The detailed plan is being drafted in parallel with the renovating and validation. II. PROGRESS As of the end of the second quarter, the project progress is 65% as shown below. Weighting, % Actual (Overall Plan) Progress, % 1. Overall Project Management 5 4 2. Risk Analysis and Impact Assessment 17 14 3. Implementation 60 43 4. Validation 12 2 5. Contingency Plan 6 2 100 65 III. SITUATION ANALYSIS AND MANAGEMENT VIEW Bangchak has started addressing the Y2K problem since the first quarter of 1997, until now the progress is as planned. However, the Stock Exchange of Thailand has recently required all listed companies to complete the implementation by December 1998. Consequently, Bangchak has revised the master plan to accommodate the new target date and estimated to have the issues for all critical items completely addresses by the end of 1998. For the business partners (supply chain), Bangchak still has the risk since those companies might not be able to resolve the problem in a timely manner. However, the impact will be minimal to the business activities of Bangchak. TRANSLATION Certificate of Acknowledgement The Bangchak Petroleum Public Company Limited Referring to the Stock Exchange of Thailand's letter dated July 7, 1998, pertaining to the Year 2000 problem awareness, Bangchak has submitted the letter to its board members during the meeting on August 24, 1998. By signing this certificate, each member has acknowledged the information in the SET letter, and accepted as their responsibility in providing the information concerning the Year 2000 problem to the shareholders and general investors. No. Name Position Signature 1 Mr. Vuthichai Pongprasit Chairman 2 Admiral. Kumnung Thiensiri Director 3 Mr. Chirayu Isarangkun na-Ayuthaya Director 4 Mr. Prasert Bunsumpun Director 5 Mr. Piyasvasti Amranand Director 6 Mr. Pichai Chunhavajira Director 7 Mr. Wanchai Thanittiraporn Director 8 Mr. Somchai Richupan Director 9 Mr. Anan Nadtasomboon Director 10 Mr. Sophon Suphapong Director and Secretary to the Board of Directors By .................... (Mr. Vuthichai Pongprasit) Chairman The Bangchak Petroleum Public Company Limited Date 24 August 1998 TRANSLATION Certificate of Correctness Report of Year 2000 Compliance Project FORM 57 (Y2K) The Bangchak Petroleum Public Company Limited by Board of Directors (hereinafter called "the Company") have examined the statement in the report concerning to this Y2K Compliance Project (hereinafter called "the Project") and certify that all are completed, accurate, true, and do not make others misunderstand, or lack the information in significance that may damage to shareholders, or stock exchange investors To be the evidence, all documents which have been certified by the Company, we empowered Mrs Saisunee Sangnimnuan (hereinafter called "the Attorney") to have the authorized signature to sign in all documents concerning to the Project. All documents, without Attorny signature, shall not be deemed as a part hereof. Name Position Signature 1 Mr. Vuthichai Pongprasit Chairman 2 Admiral. Kumnung Thiensiri Director 3 Mr. Chirayu Isarangkun na-Ayuthaya Director 4 Mr. Prasert Bunsumpun Director 5 Mr. Piyasvasti Amranand Director 6 Mr. Pichai Chunhavajira Director 7 Mr. Wanchai Thanittiraporn Director 8 Mr. Somchai Richupan Director 9 Mr. Anan Nadtasomboon Director 10 Mr. Sophon Suphapong Director and Secretary to the Board of Directors Name Position Signature Attorney Mrs. Saisunee Sangnimnuan Manager