CONSOLIDATED FINANCIAL STATEMENTS Q1/2001-STECON

SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES REPORT AND INTERIM FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED 31 MARCH 2001 Report of Independent Auditor To The Board of Directors and Shareholders of Sino-Thai Engineering and Construction Public Company Limited I have reviewed the accompanying consolidated balance sheet of Sino-Thai Engineering and Construction Public Company Limited and subsidiaries as at 31 March 2001, the related consolidated statements of earnings, retained earnings, changes in shareholders' equity and cash flows for the three- month period then ended, and the separate financial statements of Sino-Thai Engineering and Construction Public Company Limited for the same period. These financial statements are the responsibility of the Company's management as to their correctness and the completeness of the presentation. My responsibility is to report on these financial statements based on my review. I conducted my review in accordance with the auditing standard applicable to review engagements. This standard requires that I plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of the Company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. I have not performed an audit and, accordingly, I do not express an audit opinion. Based on my review, nothing has come to my attention that causes me to believe that the accompanying financial statements are not presented fairly, in all material respects, in accordance with generally accepted accounting principles. I draw attention to the following matters in respect of the financial statements for the three-month period ended 31 March 2001 :- (a) As discussed in Note 7 to the financial statements, as at 31 March 2001, the subsidiary companies had project and land awaiting development with a book value of approximately Baht 222 million. The subsidiary companies have arranged for these assets to be revalued by an independent valuer, but such valuation has not been completed at this time. However, the management believe that the fair value of those properties does not significantly differ from their book value. (b) As discussed in Note 1.1 to the financial statements, in 1999 the Company underwent a court- ordered business rehabilitation. As part of this plan, the Company was required to restructure its loans with its lenders and this was completed in 2000. As the result, subsequently on 15 December 2000, the Central Bankruptcy Court ordered the revocation of the plan. The consolidated financial statements of Sino-Thai Engineering and Construction Public Company Limited and its subsidiaries, and the separate financial statements of Sino-Thai Engineering and Construction Public Company Limited, for the year ended 31 December 2000 were audited, in accordance with generally accepted auditing standards, by another auditor who expressed an unqualified opinion on those financial statements, but drew attention to the going concern issue and other matters under his report dated 16 February 2001. The balance sheet as at 31 December 2000, as presented herein for comparative purposes, formed an integral part of the financial statements which had been audited and reported on by that auditor. The statements of earnings, retained earnings, changes in shareholders' equity and cash flows for the three-month period ended 31 March 2000, as presented herein for comparative purposes, formed a part of the interim financial statements that were reviewed by the other auditor, who under his report dated 11 May 2000, reported that he did not believe that the financial statements under review were presented fairly, in all material respects, in conformity with generally accepted accounting principles due mainly to the uncertainty as to the Company's ability to continue its business on a going-concern at that time. Narong Puntawong Certified Public Accountant (Thailand) No. 3315 Ernst & Young Office Limited Bangkok : 9 May 2001 - 2 -