VIEWED QUARTER-3 AND CONSOLIDATED F/S (F45-3)

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht) Consolidated Statements Company's Separate Statements of Changes in Shareholders' deficit of Changes in Shareholders' deficit 1999 1998 1999 1998 Share capital Preference shares Beginning balance 70,000 70,000 70,000 70,000 Increase during period - - - - Decrease during period - - - - Ending balance 70,000 70,000 70,000 70,000 Ordinary shares Beginning balance 230,000 230,000 230,000 230,000 Increase during period - - - - Decrease during period - - - - Ending balance 230,000 230,000 230,000 230,000 Paid-in capital Premium on ordinary share Beginning balance 486,000 486,000 486,000 486,000 Increase during period - - - - Decrease during period - - - - Ending balance 486,000 486,000 486,000 486,000 Surplus on assets revaluation (Note 11) Beginning balance 929,174 929,174 834,565 834,565 Increase during period - - - - Decrease during period (409,611) - (390,850) - Ending balance 519,563 929,174 443,715 834,565 Appropriated retained earnings - legal reserve Beginning balance 56,163 56,163 48,565 48,565 Increase during period - - - - Decrease during period - - - - Ending balance 56,163 56,163 48,565 48,565 Deficit Beginning balance (1,870,569) (2,264,928) (1,862,971) (2,257,330) Increase during period - net income (loss) (666,383) 424,413 (666,383) 424,413 Decrease during period - - - - Ending balance (2,536,952) (1,840,515) (2,529,354) (1,832,917) Unrealized loss on non-current marketable securities (Note 4) Beginning balance (255,754) (257,799) (254,592) (256,636) Increase during period 102,708 12,699 101,546 12,699 Decrease during period - - - - Ending balance (153,046) (245,100) (153,046) (243,937) Total Shareholders' Deficit (1,328,272) (314,278) (1,404,120) (407,724) See notes to financial statements SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF DEFICIT FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht) Consolidated Statements of Deficit Company's Separate Statements of Deficit 1999 1998 1999 1998 Deficit Balance at the beginning of period (2,038,591) (1,915,568) (2,030,993) (1,907,970) Net income (loss) (498,361) 75,053 (498,361) 75,053 Total Deficit (2,536,952) (1,840,515) (2,529,354) (1,832,917) Appropriated retained earnings Legal reserve 56,163 56,163 48,565 48,565 Total Deficit (2,480,789) (1,784,352) (2,480,789) (1,784,352) See notes to financial statements SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF DEFICIT FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht) Consolidated Statements of Deficit Company's Separate Statements of Deficit 1999 1998 1999 1998 Deficit Balance at the beginning of period (1,890,899) (2,264,928) (1,883,301) (2,257,330) Adjustment of retained earnings of subsidiary at beginning of period not included in consolidated financial statements 20,330 - 20,330 - Net income (loss) (666,383) 424,413 (666,383) 424,413 Total Deficit (2,536,952) (1,840,515) (2,529,354) (1,832,917) Appropriated retained earnings Legal reserve 56,163 56,163 48,565 48,565 Total Deficit (2,480,789) (1,784,352) (2,480,789) (1,784,352) See notes to financial statements SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht) Consolidated Statements of Cash Flows Company's Separate Statements of Cash Flows 1999 1998 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) (498,361) 75,053 (498,361) 75,053 Adjustments to reconcile net income (loss) to net cash used in operating activities Doubtful debts (12,670) 140,852 (11,196) 135,141 Depreciation and amortization expenses 29,534 36,056 27,548 28,432 (Gain) loss on sales of short-term investments (38) 37 (38) 37 Unrealized (gain) loss in marketable securities (16,078) 37 (16,078) 37 Loss on sales of long-term investments - 65,002 - 65,002 Equity in loss of subsidiaries, associated companies and joint ventures 22,042 78,487 57,417 8,932 (Gain) loss on sales of equipment (4,434) (848) (1,381) 751 Loss on disposal of equipment 164 - 166 742 Gain on sales of condominiums - (4,348) - (4,348) Loss on devaluation of condominiums - 8,863 - 8,863 Amortization of excess of book value over cost of investment - (50,054) - (50,054) Unrealized (gain) loss on exchange 388,583 (324,342) 368,155 (277,505) Contingent cost (11,800) 8,942 (11,800) 8,942 Gain on debts restructuring - (48,247) - - Changes in operating assets and liabilities (Increase) decrease in operating assets Cash at bank pledged as collaterals (201,788) - (199,542) - Accounts receivable 235,309 271,083 182,239 305,826 Due from related parties 3,234 78,209 8,660 60,557 Retention receivables 158,639 (30,775) 158,598 (30,631) Inventories 169 55,180 - - Other current assets (5,827) (9,009) (4,524) (13,219) Loans and advances to directors and employees (1,192) 11,561 (1,882) 12,082 Other assets (60,824) 1,930 (60,258) 1,541 Increase (decrease) in operating liabilities Accounts payable (148,593) (261,049) (140,534) (284,091) Due to related parties 8,192 21,384 (782) (16,722) Advances received on contracts (28,778) (121,839) (28,978) (47,766) Other current liabilities 134,488 75,784 132,628 62,834 Other liabilities (590) (28) (589) (28) Minority interests 402 (3,314) - - Net Cash Provided by (Used in) operating activities (10,217) 74,607 (40,532) 50,408 See notes to financial statements (Amounts in thousand Baht) Consolidated Statements of Cash Flows Company's Separate Statements of Cash Flows 1999 1998 1999 1998 CASH FLOWS FROM INVESTING ACTIVITIES (Increase) decrease in short-term investments (24) - (24) - Decrease in note receivable - financial institutes 2,845 41,110 - - Cash from sale of short-term investments 168 2 168 2 Increase in short-term loans to related parties (23,630) - (29,234) - (Increase) decrease in investments (20,528) (9,865) (23,188) 26,255 Cash from sale of long-term investments - 38,500 - 38,500 Decrease in loans to related parties 1,754 225,358 1,754 254,465 Cash payment on purchase of equipment (17,676) (34,766) (16,807) (25,026) Cash from sale of equipment 6,467 4,909 3,413 948 Decrease in condominiums - 8,147 - 8,147 Increase in advance payments on condominium - (2,330) - (2,330) Net Cash Provided by (Used in) investing activities (50,624) 271,065 (63,918) 300,961 CASH FLOW FROM FINANCING ACTIVITIES Increase (decrease) in bank overdrafts and loans from financial institutes 4,053 (38,650) 8,308 (47,125) Net Cash Provided by (Used in) financing activities 4,053 (38,650) 8,308 (47,125) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (56,788) 307,022 (96,142) 304,244 CASH AND CASH EQUIVALENTS AS AT BEGINNING OF PERIOD (Notes 4 and 6) 282,059 335,751 256,197 309,419 CASH AND CASH EQUIVALENTS AS AT END OF PERIOD (Notes 4 and 6) 225,271 642,773 160,055 613,663 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: Cash paid during the period Interest expense 7,708 213,787 3,137 206,197 Income tax 15,999 31,962 15,389 31,918 See notes to financial statements SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in thousand Baht) Consolidated Statements of Cash Flows Company's Separate Statements of Cash Flows 1999 1998 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) (666,383) 424,413 (666,383) 424,413 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities Doubtful debts (22,573) 153,782 (31,612) 144,891 Depreciation and amortization expenses 82,845 84,124 76,805 78,574 Loss on sales of short-term investments 95,047 18,974 95,047 18,974 Unrealized gain in marketable securities (106,711) (35,444) (106,711) (35,444) Loss on sales of long-term investments 73,398 88,152 73,398 88,152 Equity in (profit) loss of subsidiaries, associated companies and joint ventures 6,068 53,990 83,969 (27,458) Allowance for decline in long-term investment 1,162 10,000 - 10,000 (Gain) loss on sales of equipment (4,800) (4,762) (1,043) (226) Loss on disposal of equipment 1,336 1,628 1,342 1,628 Loss on sales of condominiums 703 13,456 703 13,456 (Gain) loss on devaluation of condominiums (1,125) 8,863 (1,125) 8,863 Amortization of excess of book value over cost of investment - (53,495) - (53,495) Unrealized (gain) loss on exchange 390,885 (736,780) 377,968 (722,798) Contingent cost (58,809) 52,459 (51,890) 52,459 Gain on sale of damaged goods and reposesses (2,990) - - - Gain of debts restructuring - (48,247) - - Changes in operating assets and liabilities (Increase) decrease in operating assets Cash at bank pledged as collaterals (755,636) - (752,523) - Accounts receivable 251,205 803,340 164,340 771,123 Due from related parties (5,636) (25,864) (6,688) (4,735) Retention receivables 170,311 (48,960) 170,319 (48,744) Inventories 58,022 41,520 - - Other current assets (41,641) (134,891) (46,712) (136,032) Loans and advances to directors and employees (3,106) 10,564 (1,896) 10,004 Other assets (108,189) 26,116 (109,320) (1,943) Increase (decrease) in operating liabilities Accounts payable (213,310) (328,346) (164,984) (318,259) Due to related parties 7,403 (5,862) (2,244) (33,180) Advance received on contracts 27,721 (265,512) 27,765 (159,037) Other current liabilities 326,388 42,516 308,652 25,899 Other liabilities (9,743) (32,193) (9,743) (262) Minority interests 14,352 (30,031) - - Net Cash Provided by (Used in) operating activities (493,806) 83,510 (572,566) 106,823 See notes to financial statements (Amounts in thousand Baht) Consolidated Statements of Cash Flows Company's Separate Statements of Cash Flows 1999 1998 1999 1998 CASH FLOWS FROM INVESTING ACTIVITIES (Increase) decrease in short-term investments (24) (14,600) (24) (14,574) Decrease in note receivable - financial institutes 2,015 41,110 - - Cash from sale of short-term investments 7,169 7,658 7,169 7,658 (Increase) decrease in short-term loans to related parties (111,528) - 2,333 - (Increase) decrease in investments (107,069) (25,365) (135,379) 16,255 Cash from sale of long-term investments 79,270 39,100 79,270 39,100 Decrease in loans to related parties 32,494 561,682 35,966 392,280 Cash payment on purchase of equipment (33,935) (7,074) (56,412) (42,555) Cash from sale of equipment 12,888 4,699 8,145 3,067 (Increase) decrease in condominiums 4,018 (7,116) 4,018 (7,116) Cash from sale of condominiums 4,814 - 4,814 - Decrease in advance payments on condominium - 24,865 - 24,865 Net Cash Provided by (Used in) investing activities (109,888) 624,959 (50,100) 418,980 CASH FLOW FROM FINANCING ACTIVITIES Increase (decrease) in bank overdrafts and loans from financial institutes 27,851 (139,105) 11,113 45,459 Increase short-term loans from directors 6,322 - - - Increase in long-term loans - 30,000 - - Net Cash Provided by (Used in) financing activities 34,173 (109,105) 11,113 45,459 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (569,521) 599,364 (611,553) 571,262 CASH AND CASH EQUIVALENTS AS AT BEGINNING OF PERIOD (Notes 4 and 6) 794,792 43,409 771,608 42,401 CASH AND CASH EQUIVALENTS AS AT END OF PERIOD (Notes 4 and 6) 225,271 642,773 160,055 613,663 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: Cash paid during the period Interest expense 24,131 251,008 8,533 221,376 Income tax 55,720 102,782 54,136 102,729 See notes to financial statements SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS SEPTEMBER30, 1999 AND 1998 (UNAUDITED) NOTE 1 ECONOMIC ENVIRONMENT AND BASIS OF PRESENTATION Since July 1997, certain Asia Pacific countries, including Thailand, have experienced economic difficulties relating to currency devaluation and slowdown in growth. Accordingly, the Thai government sought assistance from the International Monetary Fund to alleviate the economic crisis and improve the economy over time. The financial statements of Sino-Thai Engineering and Construction Public Company Limited ("the Company") and subsidiaries for the three-month periods and nine-month periods ended September 30, 1999 and 1998 and the separate financial statements for the same periods have been presented on a going concern basis and in conformity with generally accepted accounting principles practiced in Thailand and reflect the management 's current assessment of the possible impact of this economic situation on the financial position of the Company and its subsidiaries. Actual results could differ from management's current assessments and such differences could be material. The ultimate effect that these uncertainties will have on stated values or classifications of assets and liabilities at the balance sheet date cannot presently be determined. The consolidated financial statements of the Company and subsidiaries for the three-month periods and nine- month periods ended September 30, 1999 and 1998 and the separate financial statements for each of the periods then ended, therefore, may not necessarily include all adjustments that might ultimately result from these economic conditions. The Company and its subsidiaries have incurred net loss on operation for three-month period and nine-month period ended September 30, 1999 in the amount of Baht 498.36 million and Baht 666.38 million, respectively. The consolidated financial statement and the separate financial statements of Sino-Thai Engineering and Construction Public Company Limited at September 30, 1999 have deficit in the amount of Baht 2,536.95 million and Baht 2,529.35 million, current liabilities exceeded current assets amount of Baht 3,905.71 million and Baht 3,657.37 million, total liabilities exceeded total assets in the amount Baht 1,260.02 million and Baht 1,404.12 million, respectively. The significant matters, as mention above, have caused the Company and its subsidiaries cannot performed in accordance with loan agreements concerning loan and interest payment and financial ratio which can be called back immediately. On August 20, 1998 and September 4, 1998, the lenders informed to call of such debt. The Company has appointed a financial consultant to prepare a financial restructure plan. Until the date of report, the Company is in process of proposing a restructure plan to payables. NOTE 2 - BASIS OF CONSOLIDATED FINANCIAL STATEMENTS PRESENTATION 2.1 Basis of presentation The consolidated financial statements of Sino-Thai Engineering and Construction Public Company Limited and (more)