REPORT ON GAIN (LOSS) ON FOREIGN EXCHANGE RATE

Sino - Thai Engineering and Construction Public Company Limited Report on Gain (Loss) on Foreign Exchange Rate For the Quarter Ended March 31, 1999 (000 Baht) Gain (Loss) on Foreign Exchange Consolidated The Company Only (Three Month) Jan-Mar 99 Jan-Mar 99 Realized (15,790) (2,244) Unrealized (71,781) (80,251) (000 Baht) Gain (Loss) on Foreign Exchange Consolidated The Company Only July 2, 1997 - Mar. 31, 1999 July 2, 1997 - Mar. 31, 1999 Realized (62,294) (5,296) Unrealized (1,094,952) (1,039,683) 1. Accounting Policy in recording gain (loss) on foreign exchange. The company and its subsidiaries record total amount of gain (loss) on foreign exchange rate in the statement of income. 2. Policy to manage foreign exchange risk. The company has income from construction mostly in Thai Baht currency. In case, the company has to import materials and equipment and pay in foreign currencies, the company has policy to hedge on foreign currencies by buying forward to cover our exposure. For current US$ loan, the company also plans to fix forward rate at the satisfactory level of spot rate plus reasonable premium. However, timing of hedging deal has to match with loan repayment schedule. In order to protect foreign exchange loss in the future, the company has encouraged our customers to pay the company in foreign currencies for the portion of material or equipment that need to be imported. The policy to manage foreign exchange risk is also implemented at our subsidiaries. 3. Information on foreign currencies loan For the Company, Loan Reference rate Maturity Conditions and term US$ 8 mil. SIBOR + 1% 1 month Roll over monthly Short term loan (monthly) US$ 80 mil. SIBOR + 1% Oct. 16, 1999 Lenders have put option on Syndication loan (semi - annual) Oct.16, 1998 US$ 5 mil. SIBOR + 1% Nov. 12, 1999 Lenders have put option on Bilateral loan (monthly) Nov. 12, 1998 The lenders for the syndication loan of US$ 80 million and the bilateral loan of US$ 5.0 million exercised put option according to the loan agreement as mentioned above. The company is in the process of loan restructuring with the lenders. Best regards. Mr. Anutin Charnvirakul Director Sino - Thai Engineering and Construction Public Company Limited. May 12, 1999 The Board of Director Sino-Thai Engineering and Construction Public Company Limited 29th-30th Floor, Sino-Thai Tower Sukhumvit Soi 21, Asoke Road Bangkok 10110, Thailand Dear Sirs, The Recording of the Loss on Foreign Currency Exchange We have made a review of the loss on foreign currency exchange shown in the financial statements of Sino-Thai Engineering and Construction Public Company Limited for the three month ended March 31, 1999, as requested in letter dated May 11,1999. The loss on foreign currency exchange agrees with the company's accounting records and has been computed in conformity with the Company's accounting policy. Yours faithfully, (Nirand Lilamethwat) Certified Public Accountant