NUAL FINANCIAL STATEMENTS

NOTE 6 - CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 31 are summarized as follows: CONSOLIDATED THE COMPANY 1998 1997 1998 1997 Baht Baht Baht Baht Cash in hand and at banks 878,822,655.94 43,409,119.04 855,637,819.99 42,400,691.97 Less Cash at bank pledged as collaterals (84,030,166.50) - (84,030,166.50) - 794,792,489.44 43,409,119.04 771,607,653.49 42,400,691.97 As at December 31, 1998, cash at bank amounted to Baht 84.03 million was pledged as collaterals for bank credits. NOTE 7 - ACCOUNTS RECEIVABLE Accounts receivable as at December 31 are summarized as follows: CONSOLIDATED THE COMPANY 1998 1997 1998 1997 Baht Baht Baht Baht Accounts receivable 1,118,289,479.90 1,667,088,496.38 968,264,321.41 1,549,960,702.59 Unbilled works on construction contracts 436,432,975.00 612,069,767.00 436,432,975.00 612,069,767.00 1,554,722,454.90 2,279,158,263.38 1,404,697,296.41 2,162,030,,469.59 Less Allowance for doubtful accounts (349,454,261.29) (47,746,078.11) (324,082,316.82) (44,017,534.98) Total 1,205,268,193.61 2,231,412,185.27 1,080,614,979.59 2,118,012,934.61 As at December 31, 1997, the Company has accounts receivable amounting to approximately Baht 513.27 million for which the debtors are undertaking loan negotiations with foreign financial institutions. Management believes that the debt will be settled up. Accounts receivable are analyzed by aging as follows: CONSOLIDATED THE COMPANY 1998 1997 1998 1997 Baht Baht Baht Baht Current 372,968,417.96 458,502,328.39 367,219,110.20 440,305,097.22 Overdue 1 month to 4 months 251,602,386.72 771,190,266.89 155,070,093.63 711,282,007.31 Over 4 months to 12 months 87,353,859.80 307,182,797.17 75,020,638.37 293,499,930.27 Over 12 months 406,364,815.42 130,213,103.93 370,954,479.21 104,873,667.79 Total 1,118,289,479.90 1,667,088,496.38 968,264,321.41 1,549,960,702.59 NOTE 8 - RETENTIONS RECEIVABLE Retentions receivable as at December 31 are summarized as follows: CONSOLIDATED THE COMPANY 1998 1997 1998 1997 Baht Baht Baht Baht Retentions receivable 301,443,956.76 196,795,490.89 297,368,682.36 193,004,295.56 Less Allowance for doubtful accounts (950,000.00) (950,000.00) (950,000.00) (950,000.00) Total 300,493,956.76 195,845,490.89 296,418,682.36 192,054,295.56 NOTE 9 - INVENTORIES Inventories as at December 31 are summarized as follows: CONSOLIDATED THE CONSOLIDATED THE COMPANY 1998 1997 1998 1997 Baht Baht Baht Baht Raw materials 8,675,609.87 8,675,609.87 - - Finished goods 16,448,918.76 17,715,151.98 - - Consumable materials 715,633.25 715,633.25 - - Tool and equipment for sales 168,906,845.30 225,047,415.87 - - Spare part and supplies 53,180,790.38 67,298,608.06 - - Work in process 1,104,889.33 10,450,857.12 - - 249,032,686.89 329,903,276.15 - - Less Provision for damaged goods (27,802,464.71) (19,704,137.96) - - Total 221,230,222.18 310,199,138.19 - - NOTE 10 - OTHER CURRENT ASSETS Other current assets as at December 31 are summarized as follows: CONSOLIDATED THE COMPANY 1998 1997 1998 1997 Baht Baht Baht Baht Advances to suppliers 44,359,802.37 34,352,963.69 44,359,802.37 34,352,963.69 Withholding corporate tax 129,053,933.10 - 128,870,481.49 - Others 65,038,227.13 81,984,540.14 52,608,597.01 46,816,133.23 238,451,962.60 116,337,503.83 225,838,880.87 81,169,096.92 Less Allowance for doubtful accounts (19,331,552.36) (19,331,552.36) (19,331,552.36) (19,331,552.36) Total 219,120,410.24 97,005,951.47 206,507,328.51 61,837,544.56 NOTE 11 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as at December 31 are summarized as follows: CONSOLIDATED THE COMPANY 1998 1997 1998 1997 Baht Baht Baht Baht Land 1,248,268,668.52 1,248,268,668.52 1,015,136,089.98 1,015,136,089.98 Land improvements 95,621,474.57 11,030,519.90 91,153,088.65 11,030,519.90 Buildings 167,117,536.33 100,023,562.94 146,900,002.14 57,680,793.36 Leasehold improvements 20,874,255.26 20,874,255.26 20,874,255.26 20,874,255.26 Dredges - 282,379,837.93 - - Machinery and construction equipment 574,684,144.75 542,832,129.70 400,457,936.17 384,453,416.65 Furniture and office equipment 109,531,140.86 107,042,665.16 91,358,271.40 91,119,585.04 Vehicles 115,358,341.01 106,379,818.78 86,007,615.22 79,073,605.26 Construction in progress - 255,688,308.67 - 182,902,505.49 2,331,455,561.30 2,674,519,766.86 1,851,887,258.82 1,842,270,770.94 Less Accumulated depreciation and amortization (522,212,027.01) (756,635,206.00) (402,594,512.89) (329,464,277.60) Property, Plant and Equipment - net 1,809,243,534.29 1,917,884,560.86 1,449,292,745.93 1,512,806,493.34 A part of depreciation expenses in the separate financial statements for the year 1998 and 1997 amounted to Baht 47,518,565.88 and Baht 48,573,095.10 respectively is included in the costs of construction and cost of sales and remaining part of Baht 34,015,488.23 and Baht 26,832,706.68 respectively is included in selling and administrative expenses. NOTE 12 - OTHER ASSETS Other assets as at December 31 are summarized as follows: CONSOLIDATED THE COMPANY 1998 1997 1998 1997 Baht Baht Baht Baht Loans and advances to directors and employees 20,508,491.45 28,832,283.56 16,277,757.91 20,245,897.48 Condominiums 105,053,183.67 113,286,331.09 105,053,183.67 113,286,331.09 Advance payments on condominiums 29,179,236.07 53,944,655.45 29,179,236.07 53,944,655.45 Withholding corporate tax 286,505,517.34 283,718,076.60 283,759,283.84 283,718,076.60 Others 71,545,610.78 75,320,919.49 45,410,517.76 40,763,177.39 512,792,039.31 555,102,266.19 479,679,979.25 511,958,138.01 Less Allowance for doubtful accounts (47,442,098.93) (4,529,592.15) (47,442,098.93) (4,529,592.15) Other assets - net 465,349,940.38 550,572,674.04 432,237,880.32 507,428,545.86 NOTE 13 - PROVISION FOR VALUATION OF INVESTMENT As at December 31, 1997, the subsidiary has set up provision for decline in value of investment in its subsidiary of Baht 31.93 million in the consolidated financial statements. NOTE 14 - LONG-TERM LOANS In 1996 the parent 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. As at December 31, 1998, subsidiary company 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 company connot comply with the convenants. NOTE 15 - THE EXCESS OF BOOK VALUE OVER COST OF INVESTMENT In 1998, the Company sold out the investment in an associated company to an outsider. Due to the Company s management opinion, it is appropriate and reasonable to recognize the excess of book value over cost of investment amounting to approximately Baht 53.48 million as a revenue shown in income statement. NOTE 16 - LOSS ON CHANGE IN CURRENCY EXCHANGE SYSTEM TO A MANAGED FLOAT SYSTEM On July 2, 1997 the Ministry of Finance announced a change in the currency exchange system to the managed float system. Accordingly, the value of liabilities in foreign currencies were effected. As at December 31, 1997 the Company showed the effects of the change in the currency exchange system amounting to Baht 1,917.35 million in the statement of income of the Company. NOTE 17 - GAIN OF DEBTS RESTRUCTURING In 1998, the parent company and subsidiary have debts restructuring with a bank as per the contract dated August 26, 1998. The Company reduced bank overdraft amounting to approximately Baht 8.51 million. The subsidiary reduced loan from bank amounting to approximately Baht 121.87 million, accounts receivable and notes receivable amounting to approximately Baht 32 million and Baht 41.62 million respectively and recorded the reduced debts amounting to approximately Baht 56.76 million as gain on debts restructuring in the statements of income. In 1997 the subsidiary is under the process of debts restructuring with a bank as per the subsidiary's letter No. SDS 26/2540 date April 30, 1997 and the bank's letters No. Tor. 4-400232 dated May 7, 1997 and No. Tor. 4-400300 date May 13, 1997. The subsidiary reduced the book value amount of loan, bank overdrafts and accrued interests from Baht 99 million to Baht 43 million and recorded the reduced debts amounting to approximately Baht 56 million as gain on debts restructuring in the statement of income. The Company has already paid and redeem a mortgage for such debt since August 4, 1997. NOTE 18 - CONTINGENCIES AND COMMITMENTS The Company and subsidiaries have contingent liabilities and commitments as at December 31, 1998 as follows : Million Baht Guarantor of credit facilities of affiliated companies 136.18 Letter of guarantee issued by bank 1,576.53 Letter of credit 3.79 Guarantor of credit facilities of related parties 302.21 Guarantor of credit facilities of other company 57.38 Claims under litigation 30.50 In addition, the Company is a guarantor of credit facilities of affiliated companies, 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. As at December 31, 1998, the parent company and subsidiary have (assets) liabilities in foreign currencies which had not hedged against the value of Thai Baht as follow: Foreign Currencies Amounts French Franc 991,636.60 Austrian Schilling 15,702,565.06 Pound Stering 95,104.40 Deutsche Mark 710,875.43 US. Dollar 93,049,328.29 Yen 6,903,000.00 Italian Lire 2,866,320.00 Singapore Dollar 1,835,377.39 NOTE 19 - 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 years end December 31, 1998 is summarized as follows: Construction Sale Service Total Million Baht Million Baht Million Baht Million Baht Income 4,594.37 384.82 84.56 5,063.75 Cost (4,345.44) (298.32) (72.56) (4,716.32) Gross profit 248.93 86.50 12.00 347.43 NOTE 20 - RECLASSIFICATION OF ACCOUNTS Certain accounts in the financial statements for the year December 31, 1997 have been reclassified to conform with the presentation in the financial statements for the year ended December 31, 1998. NOTE 21 - YEAR 2000 COMPUTER ISSUES (BEING UNAUDITED AND NOT FORMING PART OF OUR AUDITORS' REPORT) The year 2000 problem arises because many computerized systems use two degits 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 commenced its plan to improve the computerized system in respect of resolving the Year 2000 compliance problem. The plan is expected to be completed within May 1999 and the expected cost of remedying the problem is insignificant. Although, the management expect to have remedied the problem by the time year 2000 occurs, 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.