NSOLIDATED FINANCIAL STATEMENTS Q2/2542

5.6 The Company significant transactions with its related parties for the periods ended June 30, are as follows: CONSOLIDATED THE COMPANY 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Revenues from construction - 3,771 - 3,771 Revenues from services, rent and others - 11 378 937 Interest income - - 12,727 1,931 Equipment purchase - - 586 1,287 Concrete service and others - - 465 987 NOTE 6 - CASH AND CASH EQUIVALENTS Cash and cash equivalents as at June 30 are summarized as follows: CONSOLIDATED THE COMPANY 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Cash in hand and at banks 919,937 335,751 893,208 309,419 Less Cash at bank pledged as collaterals (637,878) (637,011) - Cash and cash equivalents - net 282,059 335,751 256,197 309,419 As at June 30, 1999, cash at bank in the consolidated financial statements and the company's financial statements amounted to Baht 637.88 million and Baht 637.01 million respectively, were pledged as collaterals for bank credits. NOTE 7 - TEMPORARY INVESTMENTS Temporary investments as at June 30, are summarized as follows: CONSOLIDATED Securities Trading General Investments Total 1999 1998 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Equity securities 305,956 417,553 37,675 55,500 343,631 473,053 Less Allowance for revaluation of investment (234,617) (327,434) - (4,828) (234,617) (332,262) Equity securities - net 71,339 90,119 37,675 50,672 109,014 140,791 THE COMPANY Securities Trading General Investments Total 1999 1998 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Equity securities 305,852 417,449 37,675 55,500 343,527 472,,949 Less Allowance for revaluation of investment (234,517) (327,434) - (4,828) (234,517) (332,262) Equity securities - net 71,335 90,015 37,675 50,672 109,010 140,687 NOTE 8 - ACCOUNTS RECEIVABLE Accounts receivable as at June 30 are summarized as follows: CONSOLIDATED THE COMPANY 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Accounts receivable 1,110,531 1,242,409 1,000,549 1,158,386 Unbilled works on construction contracts 430,867 541,039 430,867 541,039 1,541,398 1,783,448 1,431,416 1,699,425 Less Allowance for doubtful accounts (329,893) (59,835) (300,068) (53,767) Total 1,211,505 1,723,613 1,131,348 1,645,658 Accounts receivable are analyzed by aging as follows: CONSOLIDATED THE COMPANY 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Current 267,869 466,551 266,082 462,058 Overdue 1 month to 4 months 378,482 245,466 326,902 227,456 Over 4 months to 12 months 122,197 351,330 97,683 300,297 Over 12 months 341,983 179,062 309,882 168,575 Total 1,110,531 1,242,409 1,000,549 1,158,386 As at June 30, 1998, the Company has overdue accounts receivable amounting to approximately Baht 80.72 million. The Company has not set up provision for such accounts receivable because the management believes that the debt will be settled up. NOTE 9 - LONG-TERM LOANS In 1996 the Company obtained the US$ 80,000,000 syndicate loan from 19 banks and financial institutions and the US$ 5,000,000 loan from a foreign bank which bear interest at the rate subject to the SIBOR rate. The principals are repayable at the end of 3 years from the drawdown date and interest payable semi-annually. The lenders may request the Company to repay the loans at the end of 2 years from the drawdown date. Loan covenants include maintenance of important financial ratios to the level as set out in the agreement. In 1997 the Company cannot maintain the above mentioned financial ratios which may result in the lender calling the loan. In 1999, the subsidiary has long-term loans in the amount of Baht 147 million. Long-term loans have been reclassified to long-term loans in default because the subsidiary cannot comply with the convenants At present, the subsidiary is negotiating the restructure of its loans. In 1998 the subsidiary has current portion of long-term loans amounting to approximately Baht 24.50 million which was shown under current liabilities. NOTE 10- SURPLUS ON REVALUATION In 1996 the Company revalued its land resulting in surplus on revaluation of Baht 834.57 million as approved by the Executive Board of Directors' meeting No.12/2539 held on March 28, 1996. The Company recorded the increase in value of land as surplus on revaluation which was shown under shareholders' equity. The Company is currently in the process of land appraisal by our independent appraiser to obtain the present value. A subsidiary revalued its land resulting in surplus on revaluation of Baht 185 million as approved by the Executive Board of Directors No.4/2539 held on June 28, 1996, which was shown as surplus on revaluation under shareholders' equity in the amount of Baht 94.61 million. Afterwords, this subsidiary revalued the land on declining revaluation of Baht 36.79 million as approved by the Excutive Board of Directors' meeting No.6/2542 held on July 12,1999, and as per the reports dated June 14, 18 and 21, 1999 prepared by the independent appraiser, in which the information was compared with the market price. The subsidiary recorded the declining revaluation referred to above in the shareholders' equity. NOTE 11 - CONTINGENCIES AND COMMITMENTS The Company and subsidiaries have contingent liabilities and commitments as at June 30, 1999 as follows : Million Baht Guarantor of credit facilities of affiliated companies 143.92 Letter of guarantee issued by bank 1,836.39 Guarantor of credit facilities of related parties 244.74 Guarantor of credit facilities of other company 64.41 Claims under litigation 5.88 In addition, the Company is a guarantor of credit facilities of related parties, not included within the above, amounting to approximately Baht 309.36 million, for which there is a counter guarantee issued by another party in the form of letter guarantee issued by bank. NOTE 12 - SEGMENT INFORMATION The Company and its subsidiaries operate in three industrial segments, that are business of construction, selling and services and one geographical area, Thailand. Information by operation segments of the Company and subsidiaries for the six-month period ended June 30, 1999 is summarized as follows: Construction Sale Service Total Million Baht Million Baht Million Baht Million Baht Income 1,768.21 109.10 6.46 1,883.77 Cost (1,553.88) (102.21) (7.97) (1,664.06) Gross profit (loss) 214.33 6.89 (1.51) 219.71 NOTE 13 - RECLASSIFICATION OF ACCOUNTS Certain accounts in the financial statements for the three-month period and six-month period ended June 30, 1998 have been reclassified to conform with the presentation in the financial statements for the three-month period and six-month period ended June 30, 1999. NOTE 14 - YEAR 2000 COMPUTER ISSUES (BEING UNREVIEWED AND NOT FORMING PART OF OUR ACCOUNTANTS' REVIEW REPORT) The Year 2000 problem arises because many computerized systems use two digits rather than four to identify year. Date- sensitive systems may recognize the year 2000 as some other dates, resulting in errors when information using year 2000 dates is processed. Entities may experience the effects of year 2000 problem before, on or after January 1, 2000, and that the effects on operations and financial reporting. If not addressed and repaired properly and timely, may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. In addition, it is not possible to be certain that all aspects of the year 2000 problem affecting the entity, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. The management has already commenced its plan to improve the computerized system to resolve the year 2000 problem. The relevant expenses are insignificant. Although, the management expect to have remedied the problem by the year 2000, the operations of the Company would still remain at risk from other entities with the Company undertakes business if those entities are unable to remedy their own problems in time. ****