NUAL CONSOLIDATED FINANCIAL STATEMENTS

collected. Rental income on equipment is recognized when invoices are collected. Other income is recognized on the accrual basis. Expenses Recognition Costs of construction of the Company are recognized on the basis of the percentage of work completed to the total estimated costs or the actual costs. Differences between the estimated costs and the actual cost are recognized on the basis of the percentage of work completed which are recorded as construction contracts in progress. Subsidiary's service costs are recognized on the basis of actual cost. Expenses are recognized on the accrual basis. Cash and Cash equivalents Cash and cash equivalents represent cash in hand and at banks and notes receivable financial institutions with an original maturity of 3 months or less, net of cash at bank and notes receivable pledged as collaterals. Allowance for Doubtful Accounts The Company provides allowance for doubtful accounts on the basis of those amounts which may proved to be uncollectible. Inventories Inventories of its subsidiaries are stated at cost, using first-in, first-out method, net of provision for declining in value of inventories. Investments Investment in securities for the year ended December 31, 1999 are classified and stated in conformity with Accounting Standards No.40 " Accounting for Investments in Debt and Equity Instruments" as follows: Short-term investments in marketable equity securities, which held for trading, are stated at fair value. Unrealized gains or losses arising on the revaluation of trading securities are recognized in the statement of income. Short-term investments in non-marketable equity securities, which is general investment, are stated at cost. Long-term investments in marketable equity securities available for sale are stated at fair value. Unrealized gains or losses arising on the revaluation of available for sale securities are shown as a separate from shareholders' equity and recognized in the statement of income upon sale. Long-term investments in non-marketable equity securities, which is general investment, are stated at cost. The moving average method is used to determine the cost of short-term investments and long-term investments at the time of sales. Investment in securities for the year ended December 31, 1998 are stated as follows: Investments in listed securities are valued at the lower of aggregate cost or aggregate market value. The declining in value of non-current marketable securities is shown under shareholders' equity. Investments in its subsidiary and associated companies are stated at the equity method. Investments in other securities which the Company holds less than 20 percent is stated at cost net of provision for declining in value of investment. Investments in joint ventures in which percentage of Company's portion of profit exceeds 20 percent are stated at equity method in according to proportionate method for all joint venture that the Company has a power to control. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is computed by the straight-line method, based on the estimated useful lives of assets 5-20 years. Property, Plant and Equipment of subsidiaries are stated at cost. Depreciation is computed by the straight-line method on costs less approximate salvage value, based on the estimated useful lives of assets (Except dredges of which depreciation is computed by the ratio of actual production of tin concentrate to the estimated tin ore reserves and bucket bands, tumblers and bucket idlers which are based on actual production hours over their estimated useful lives) as follows: Land and land improvements - Buildings 5% Buildings, jetty and dry dock 5% Leasehold buildings improvements 5% Vehicles 10 - 20% Motor launches and tugs 10% Machinery and construction equipment 10 - 20% Mining equipment 5 - 20% Office furniture equipment and others 20% Revaluation The Company and subsidiaries recorded the asset's carrying amount, which were increased as a result of this appraisal, by crediting equity directly under the heading of revaluation surplus. Where the asset's carrying amount, has been decreased as a result of a revaluation, the expense is charged in the statement of income. A revaluation decrease is however charged directly against any related revaluation surplus to the extent that the decrease does not exceed the amount held in the revaluation surplus in respect of that same property, plant and equipment. The fixed assets revaluation in respect of land and dredges is based on Fair Value as determined by an independent valuer. Unamortized mining rights Mining rights for 2 right are amortized by the straight-line method over the lives of mining rights 25 years as from February 1979 and August 1979. Accounts in Foreign Currencies Transactions in foreign currencies are translated into Baht at the rates of exchange prevailing on the dates of transactions. Liabilities in foreign currencies outstanding at the balance sheet date are translated into Baht at the rate of exchange prevailing on that date, and at forward exchange rates where the Company has entered into forward exchange contracts. Gain or loss on translation is included in statements of income. Basic Earnings (Loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) for the years by the number of ordinary shares outstanding at the end of year. NOTE 4 - CHANGE IN ACCOUNTING POLICY FOR UNAMORTIZED MINING RIGHT During 1999, a subsidiary changed its accounting policy with respect to the treatment of unamortized mining development cost previously recognized as assets to be recognized as expenses in order to conform with the TAS interpretation No. 4 issued by the Institute of Certified Accountants and Auditors of Thailand. This Change in accounting policy has been accounted for retrospectively. Therefore, the comparative statements for 1998 have been restated to conform to the changed accounting policy. The effect of the change has decreased in net loss and basic losses per share for 1999 and 1998 by Baht 136,380.95 and Baht 0.01 per share, which had not been occurred previously. The cumulative effect of change in accounting policy resulted to opening deficit of the year 1999 have been increased by Baht 10,863,395.28 and the cumulative effect of change in accounting policy resulted to opening deficit of the year 1998 have been increase by Baht 10,938,465.57. NOTE 5 - CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 31 are summarized as follows: Consolidated Company's Separate Statements of Cash Flows Statements of Cash Flows 1999 1998 1999 1998 Baht Baht Baht Baht Cash in hand and at banks 1,194,872,031.33 878,822,655.94 1,171,218,735.67 855,637,819.99 Less Cash at bank pledged as collaterals (854,309,723.68) (84,030,166.50) (854,086,723.98) (84,030,166.50) Cash and cash equivalents - net 340,562,307.65 794,792,489.44 317,132,011.69 771,607,653.49 As at December 31, 1999 and 1998, cash at bank in the consolidated financial statements and the separate financial statements amounted to Baht 854.31 million and Baht 84.03 million and Baht 854.09 million and Baht 84.03 million respectively, were pledged as collaterals for credit facilities from banks. NOTE 6 - SHORT-TERM INVESTMENTS Short-term investments as at December 31, are summarized as follows: Consolidated Balance Sheets Company's Separate Balance Sheets Securities for Trading Securities for Trading 1999 1998 1999 1998 Baht Baht Baht Baht Liability securities - 2,014,909.24 - - Equity securities 305,826,407.00 408,042,483.94 305,722,007.00 407,938,083.94 Less Provision for declining invalue of investment (214,779,001.70) (325,250,148.89) (214,679,161.70) (325,150,308.89) Short-term investments - net 91,047,405.30 84,807,244.29 91,042,845.30 82,787,775.05 NOTE 7 - ACCOUNTS RECEIVABLE Accounts receivable - other as at December 31, are summarized as follows: Consolidated Balance Sheets Company's Separate Balance Sheets 1999 1998 1999 1998 Baht Baht Baht Baht Accounts receivable 934,408,602.35 1,118,289,479.90 879,588,612.58 968,264,321.41 Unbilled works on construction contracts 594,912,058.00 436,432,975.00 594,912,058.00 436,432,975.00 1,529,320,660.35 1,554,722,454.90 1,474,500,670.58 1,404,697,296.41 Less Allowance for doubtful accounts (334,200,547.97) (349,454,261.29) (317,503,395.93) (324,082,316.82) Total 1,195,120,112.38 1,205,268,193.61 1,156,997,274.65 1,080,614,979.59 Accounts receivable are analyzed by aging as follows: Consolidated Balance Sheets Company's Separate Balance Sheets 1999 1998 1999 1998 Baht Baht Baht Baht Current 194,719,520.69 372,968,417.96 188,781,323.95 367,219,110.20 Overdue 1 month to 4 months 321,921,080.80 251,602,386.72 308,425,000.69 155,070,093.63 Over 4 months to 12 months 57,877,437.46 87,353,859.80 54,575,675.98 75,020,638.37 Over 12 months 359,890,563.40 406,364,815.42 327,806,611.96 370,954,479.21 Total 934,408,602.35 1,118,289,479.90 879,588,612.58 968,264,321.41 The overdue accounts receivable, as mention above, the Company and subsidiaries are following up on the collection of these debts. The Company's management has provided adequately for allowance for doubtful accounts in accordance with accounting policy. NOTE 8- RETENTIONS RECEIVABLE Retentions receivable as at December 31 are summarized as follows: Consolidated Balance Sheets Company's Separate Balance Sheets 1999 1998 1999 1998 Baht Baht Baht Baht Retentions receivable 105,605,439.76 301,443,956.76 105,605,439.76 297,368,682.36 Less Allowance for doubtful accounts (4,560,784.22) (950,000.00) (4,560,784.22) (950,000.00) Total 101,044,655.54 300,493,956.76 101,044,655.54 296,418,682.36 NOTE 9 - INVENTORIES Inventories as at December 31 are summarized as follows: Consolidated Balance Sheets 1999 1998 Baht Baht Raw materials 3,144,744.95 8,675,609.87 Finished goods - 16,448,918.76 Consumable materials - 715,633.25 Tool and equipment for sales 113,016,814.34 168,906,845.30 Spare part and supplies 49,568,129.54 53,180,790.38 Work in process 4,251,076.88 1,104,889.33 169,980,765.71 249,032,686.89 Less Provision for diminution in value of inventories (113,712,474.73) (27,802,464.71) Total 56,268,290.98 221,230,222.18 On June 8, 1999, a domestic bank sent a letter to a subsidiary to return the machinery since the above subsidiary has not performed payment for goods to the bank. The value of such machinary as at December 31, 1999 is Baht 37.11 million. NOTE 10 - OTHER CURRENT ASSETS Other current assets as at December 31 are summarized as follows: Consolidated Balance Sheets Company's Separate Balance Sheets 1999 1998 1999 1998 Baht Baht Baht Baht Advances to suppliers 53,071,443.89 44,359,802.37 42,039,594.28 44,359,802.37 Withholding tax 203,847,603.81 414,810,690.54 199,360,846.25 411,881,005.43 Others 46,729,144.87 64,754,488.34 60,917,811.08 52,608,597.01 303,648,192.57 523,924,981.25 302,318,251.61 508,849,404.81 Less Allowance for doubtful accounts (39,086,086.43) (19,331,552.36) (47,465,975.56) (19,331,552.36) Total 264,562,106.14 504,593,428.89 254,852,276.05 489,517,852.45 NOTE 11 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment in the Company's separate financial statements at December 31, 1999 are summarized as follows: (Amounts : Baht (Amounts : Baht) Change of Cost Value Revaluation Description Beginning Increase Sale on Ending Balance Purchase Sale/Disposal (Decrease) Subsidiary Balance Land Cost 180,570,618.41 - - - - 180,570,618.41 Revalued increment cost 834,565,471.57 - - (390,850,562.50) - 443,714,909.07 Land improvements 91,153,088.65 - - - - 91,153,088.65 Building 146,900,002.14 - - - - 146,900,002.14 Leasehold building improvements 20,874,255.26 - - - - 20,874,255.26 Machinery and construction equipment 400,457,936.17 11,429,695.20 (49,139,589.79) - - 362,748,041.58 Mining equipment - - - - - - Furniture Office equipment 91,358,271.40 6,187,452.12 (17,047,015.10) - - 80,498,708.42 Vehicles 86,007,615.22 35,874,503.68 (5,394,920.21) - - 116,487,198.69 Construction in progress - 9,236,721.09 - - - 9,236,721.09 Property, Plant and Equipment - net 1,851,887,258.82 62,728,372.09 (71,581,525.10) (390,850,562.50) - 1,452,183,543.31 (Amounts : Baht) Change of Accumulated Depreciation Net book value Beginning Balance Provision Description Accumulated for decline Impairment Sale/ Sale on Ending Beginning Ending depreciation in value of assets Depreciation Disposal Subsidiary Balance Balance Balance Land Cost - - - - - - - 180,570,618.41 180,570,618.41 Revalued increment cost - - - - - - - 834,565,471.57 443,714,909.07 Land improvements - - - - - - - 91,153,088.65 91,153,088.65 Building 28,822,000.37 - - 7,344,999.77 - - 36,167,000.14 118,078,001.77 110,733,002.00 Leasehold building improvements 12,866,950.02 - - 1,406,605.66 - - 14,273,555.68 8,007,305.24 6,600,699.58 Machinery and construction equipment 244,332,463.76 - - 40,685,489.55 (43,803,899.87) - 241,214,053.44 156,125,472.41 121,533,988.14 Mining equipment - - - - - - - - - Furniture Office equipment 74,879,116.64 - - 8,840,497.16 (16,716,635.02) - 67,002,978.78 16,479,154.76 13,495,729.64 Vehicles 41,693,982.10 - - 15,696,350.08 (2,048,485.71) - 55,341,846.47 44,313,633.12 61,145,352.22 Construction in progress - - - - - - - - 9,236,721.09 Property, Plant and Equipment - net 402,594,512.89 - - 73,973,942.22 (62,569,020.60) - 413,999,434.51 1,449,292,745.93 1,038,184,108.80 Depreciation for the years ended December 31, 1999 and 1998 in the separate financial statements are in the amount of Baht 73.97 million and Baht 81.53 million, respectively of which Baht 40.69 million and Baht 47.52 million, respectively are included under costs of construction, and Baht 33.29 million and Baht 34.02 million, respectively under selling and administrative expense. Impairment loss on land in 1999 in the amount of Baht 390.85 million net off revaluation surplus. Property, plant and equipment in the Consolidated financial statements at December 31, 1999 are summarized as follows: (Amounts : Baht) Change of Cost Value Revaluation Description Beginning Increase Sale on Ending Balance Purchase Sale/Disposal (Decrease) Subsidiary Balance Land Cost 228,196,700.95 1,022,875.00 - - (24,424,795.54) 204,794,780.41 Revalued increment cost 1,020,071,967.57 - - (423,430,852.50) - 596,641,115.07 Land improvements 91,153,088.65 - - - - 91,153,088.65 Building 151,100,002.14 - - - - 151,100,002.14 Buildings, jetty and dry dock 16,017,534.19 - - - - 16,017,534.19 Leasehold building improvements 20,874,255.26 - - - - 20,874,255.26 Motor launches and tugs Cost 295,408,863.72 - (1,736,664.58) - - 293,672,199.14 Revalued increment cost - - - 96,060,000.00 - 96,060,000.00 Machinery and construction equipment 483,472,611.91 11,429,695.20 (118,510,757.67) - - 376,391,549.44 Mining equipment 93,131,532.84 24,290.00 - - - 93,155,822.84 Furniture and Office equipment 112,079,526.78 6,477,757.27 (22,328,769.09) - - 96,228,514.96 Vehicles 102,329,315.22 37,562,529.38 (13,880,278.17) - (951,000.00) 125,060,566.43 Construction in progress - 9,236,721.09 - - - 9,236,721.09 Property, Plant and Equipment - net 2,613,835,399.23 65,753,867.94 (156,456,469.51) (327,370,852.50) (25,375,795.54) 2,170,386,149.62 (Amounts : Baht) Change of Accumulated Depreciation Net book value Beginning Balance Provisio Description Accumulated for decline Impairment Sale/ Sale on Ending Beginning Ending depreciation in value of assets Depreciation Disposal Subsidiary Balance Balance Balance Land Cost - - 4,204,768.00 - - - 4,204,768.00 228,196,700.95 200,590,012.41 Revalued increment cost - - - - - - - 1,020,071,967.57 596,641,115.07 Land improvements - - - - - - - 91,153,088.65 91,153,088.65 Building 29,079,178.33 - - 7,554,999.59 - - 36,634,177.92 122,020,823.81 114,465,824.22 Buildings, jetty and dry dock 5,140,039.32 - - 654,243.74 - - 5,794,283.06 10,877,494.87 10,223,251.13 Leasehold building improvements 12,866,950.02 - - 1,406,605.66 - - 14,273,555.68 8,007,305.24 6,600,699.58 Motor launches and tugs Cost 260,958,048.37 34,214,640.56 - 66,101.60 (1,736,659.58) - 293,502,130.95 236,174.79 170,068.19 Revalued increment cost - - - - - - - - 96,060,000.00 Machinery and construction equipment 305,733,759.62 - - 48,744,030.81 (101,952,501.02) (1,920,000.00) 250,605,289.41 177,738,852.29 125,786,260.03 Mining equipment 17,903,230.78 - - 4,298,147.44 - - 22,201,378.22 75,228,302.06 70,954,444.62 Furniture and Office equipment 84,327,585.25 - - 11,143,034.12 (21,672,719.30) - 73,797,900.07 27,751,941.53 22,430,614.89 Vehicles 54,368,432.69 - - 17,180,797.67 (10,080,456.06) (848,908.30) 60,619,866.00 47,960,882.53 64,440,700.43 Construction in progress - - - - - - - - 9,236,721.09 Property, Plant and Equipment - net 770,377,224.38 34,214,640.56 4,204,768.00 91,047,960.63 (135,442,335.96) (2,768,908.30) 761,633,349.31 1,809,243,534.29 1,408,752,800.31 Depreciation for the years ended December 31, 1999 and 1998 in the consolidated financial statements are in the amount at Baht 91.05 million and Baht 97.22 milliom, respectively of which (more)