NSOLIDATED FINANCIAL STATEMENTS QUATER 1/2000

statements and Baht 1,931.85 million and Baht 1,703.57 million, respectively in the separate financial statements. The financial statements have been prepared on going concern basis, which assumes that the Company will continue in existence. The validity of this assumption is dependent upon the Company's ability to meet its financial requirements, and the success of future operations. If the Company were unable to continue in existence, adjustments would have to be made to reduce the value of assets to their recoverable amounts, to provide for any additional liabilities that might arise and to consider the classification of those assets and liabilities. The Company and a subsidiary in 2000 and 1999 have failed to repay loans and interest and have not performed financial ratio condition under loan agreement that entitles the banks to accelerate the maturity of all amount outstanding immediately due and payable. On August 20, 1998 and September 4, 1998, the lenders informed to the Company to repay the whole amount before due date in according to the loan agreement. The Company has appointed a financial consultant to prepare a financial restructuring plan. In 1999, a subsidiary's total liabilities exceeded total assets and a subsidiary has incurred a net loss from operations for many years and its total current liabilities exceeded total current assets. The above subsidiary has been informed by a letter from the Stock Exchange of Thailand reference No. Bor Jor/Mor 1921/2540 dated December 17, 1997, regarding to withdrawal from listed company because of a significant decrease in operating assets since it has ceased its operations on tin ore mining. The Company has been still in the process of rehabilitation. On April 8, 1998, a subsidiary has entered into a contract with a financial institution to be a financial consultant in order to perform the rehabilitation plan due to withdraw from listed company from stock exchange in Thailand, requring consulting fee of Baht 67,500 per quarter until this plan to be finalized. The subsidiary is performing the resolution of the project in order to reach the plan On December 17, 1999, creditors and the Company submitted their petition for rehabilitation plan for the company to the Central Bankruptcy Court and on January 17, 2000 the Court ruled that the Company must be rehabilitated by appointing ,Mr. Anutin Charnvirakul and Mr. Chavarat Charnvirakul as the planner by requesting of creditors and the Company. Therefore, the Company must follow the rehabilitation process as specified in the Bankruptcy law. 1.5 Summary of significant accounting policy Revenue Recognition Revenue from construction of the parent company are recognized on the basis of the percentage-of- completion method as estimated by the Company's engineers. Differences between income recognized on the basis of the percentage-of-completion method and billing income are recorded as accounts receivable. Subsidiary's revenue from sales are recognized when significant risk on ownership or rewards is transferred to the buyer. Service income are recognized on the basis of the percentage-of-completion method and invoices are collected. Rental income on equipments is recognized when invoices are collected. Other income are 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 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 or when the securities are impaired in the value. 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 period ended March 31, 1999 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 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 life 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: 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 appraiser. 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 Loss per Share Basic loss per share is computed by dividing net loss for the period by the number of ordinary shares outstanding at the end of the period. 1.6 Change in accounting policy for deffered charge on 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 1999 has 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 the three-month period ended March 31, 1999 by Baht 266,569.29 and Baht 0.02 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 10,802,084.62. In the period 2000, the Company restated its financial statements of the year 1999 from recording a group of related companies as Sino-Thai Construction Service Company Limited and Sino-Thai Resources Development Public Company Limited to be Sino-Thai Construction Service Company Limited, Sino-Thai Resources Development Public Company Limited and the Sino-Thai Joint Venture. In restating the financial statements, the Company had to restate the preceding consolidated financial statements for the purpose of comparability. The result of the change caused the total assets increased by Baht 177,957.33 and total liabilities also increased in the same amount. NOTE 2 SUPPLEMENTAL INFORMATION 2.1 Transactions with related parties The Company has significant transactions with its persons and related parties which concerned certain director and shareholder of the Company, their sharing and directorships in the related parties. The basis of transactions occurring between the Company and its related parties is similar to the basis of transactions undertaken with nonrelated parties and included in financial statements. The outstanding balance occurred between the Company and related parties as at March 31, 2000 and December 31, 1999 are as follows: The significant accounting transactions concerned related parties for the three month periods ended March 31, are as follows: (Amount in Thousand Baht) Company's Separate Financial Statements 2000 1999 Revenues from services, rent and others 14 189 Interest income - 8,967 Equipment purchase 28 415 Concrete service and others - 264 Accounts receivable-related parties as at March 31, 2000 and December 31, 1999 are summarized as follows: (Amounts in Thousand Baht) Consolidated Balance Sheets Company's Separate Balance Sheets 2000 1999 2000 1999 Joint ventures Philipp Holzmann (Thai) /U.T.M. Engineering / Sino-Thai Joint Venture 39,171 39,358 39,171 39,358 Zueblin W&F Stecon Joint Venture 1,421 4,930 640 4,149 The Joint Venture of Tomen Enterprise (Bangkok) Limited/Sino-Thai Engineering and Construction Public Company Limited/ Totems Company Limited 13,807 16,032 13,807 16,032 Sino-Thai Joint Venture - 1,500 1,834 1,500 SS Joint Venture 70 70 70 70 Total 54,469 61,890 55,522 61,109 Subsidiaries Sino-Thai Construction Services Company Limited - - 21,520 18,486 Sino-Thai Resources Development Public Company Limited - - 2 1 Total - - 21,522 18,487 (Amounts in Thousand Baht) Consolidated Balance Sheets Company's Separate Balance Sheets 2000 1999 2000 1999 Associated companies STP & I Public Company Limited - 9,655 - - ACS Asia Limited 12 16 12 16 Thai Maintenance Contracting Company 167 266 167 266 Limited Total 179 9,937 179 282 Others 22,055 21,815 19,086 18,987 Total accounts receivable-related parties 76,703 93,642 96,309 98,865 Less Allowance for doubtful accounts (22,302) (23,302) (40,485) (37,254) Total Accounts receivable-related parties 54,401 70,340 55,824 61,611 Accounts receivable-related parties are analyzed by aging as follows: (Amounts in Thousand Baht) Consolidated Balance Sheets Company's Separate Balance Sheets 2000 1999 2000 1999 Overdue 1 month to 4 months 5,340 28,918 6,598 19,408 Over 4 months to 12 months 12,318 247 12,156 - Over 12 months 57,769 57,684 54,328 54,328 Total 75,427 86,849 73,082 73,736 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. Accounts payable-related parties as at March 31, 2000 and December 31, 1999 are summarized as follows: (Amounts in Thousand Baht) Consolidated Balance Sheets Company's Separate Balance Sheets 2000 1999 2000 1999 Subsidiaries Sino-Thai Construction Services Company Limited - - - 150 Sino-Thai Resources Development Public Company Limited - - 5 - Total - - 5 150 (Amounts in Thousand Baht) Consolidated Balance Sheets Company's Separate Balance Sheets 2000 1999 2000 1999 Associated companies HTR Corporation Limited 144 175 144 175 ACS Asia Limited 76 76 76 76 Total 220 251 220 251 Other related parties 2,267 3,683 10 2,606 Total 2,487 3,934 235 3,007 Short-term loans to related parties as at March 31, 2000 and December 31, 1999 are summarized as follows : 2000 Consolidated Company's Separate Policy of interest rate on loans charging Balance Sheet Balance Sheet Consolidated Company's separate (Thousand Baht) (Thousand Baht) Balance Sheet Balance Sheet Joint Ventures Philipp Holzmann (Thai)/ U.T.M. Engineering/ 15% 15% Sino-Thai Joint Venture Beginning balance 15,346 15,346 Increase in loan during period - - Decrease in loan during period (15,346) (15,346) Ending balance carried forward - - The Joint Venture of Tomen Enterprise 11% 11% (Bangkok) Limited/ Sino-Thai Engineering and Construction Public Company Limited/ Totems Company Limited Beginning balance 6,671 6,671 Increase in loan during period - - Decrease in loan during period - - Ending balance carried forward 6,671 6,671 Sino-Thai Joint Venture 9.25% Beginning balance 2,542 2,542 Increase in loan during period - - Decrease in loan during period (2542) (2,542) Ending balance carried forward - - Total 6,671 6,671 Subsidiary Sino-Thai Construction Services Company - 7.3941 - 9% Limited Beginning balance - 158,911 Increase in loan during period - 49,640 Decrease in loan during period - (20,072) Less Allowance for doubtful accounts - (188,479) Ending balance carried forward - - 2000 Consolidated Company's Separate Policy of interest rate on loans charging Balance Sheet Balance Sheet Consolidated Company's separate (Thousand Baht) (Thousand Baht) Balance Sheet Balance Sheet Associated companies MMR Asia Company Limited 15-17% 17% Beginning balance 17,112 11,612 Increase in loan during period - - Decrease in loan during period - - Less Allowance for doubtful accounts (17,112) (11,612) Ending balance carried forward - - Thai Maintenance Contracting Company Limited 10% 10% Beginning balance 5,000 5,000 Increase in loan during period - - Decrease in loan during period - - Ending balance carried forward 5,000 5,000 Total 5,000 5,000 Total short-term loans to related parties net 11,671 11,671 1999 Consolidated Company's Separate Policy of interest rate on loans charging Balance Sheet Balance Sheet Consolidated Company's separate (Thousand Baht) (Thousand Baht) Balance Sheet Balance Sheet Joint Ventures Philipp Holzmann (Thai)/ U.T.M. Engineering/ 15% 15% Sino-Thai Joint Venture Beginning balance - - Increase in loan during period 15,346 15,346 Decrease in loan during period - - Ending balance carried forward 15,346 15,346 The Joint Venture of Tomen Enterprise 11% 11% (Bangkok) Limited/Sino-Thai Engineering and Construction Public Company Limited/ Totems Company Limited Beginning balance 7,837 7,837 Increase in loan during period - - Decrease in loan during period (1,166) (1,166) Ending balance carried forward 6,671 6,671 Sino-Thai Joint Venture - 9.25% Beginning balance - - Increase in loan during period - 2,542 Decrease in loan during period - - Ending balance carried forward - 2,542 Total 22,017 24,559 1999 (more)