NSOLIDATED FINANCIAL STATEMENTS QUATER 1/2000

Ending balance 486,000 486,000 486,000 486,000 Revaluation surplus (Note 2.5) Beginning balance 571,100 929,174 571,100 834,565 Increase during period - - - - Decrease during period (266) - (266) - Ending balance 570,834 929,174 570,834 834,565 Appropriated retained earnings - legal reserve Beginning balance 56,164 56,164 48,566 48,566 Increase during period - - - - Decrease during period - - - - Ending balance 56,164 56,164 48,566 48,566 SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN DEFICIT IN SHAREHOLDERS' EQUITY "FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2000 AND 1999" ( UNAUDITED ) (Amounts in thousand Baht) Consolidated Statements of Changes Company's Separate Statements of in Deficit in Shareholders' equity Changes in Deficit in Shareholders' equity 2000 1999 2000 1999 ( Restated ) ( Restated ) Deficit Beginning balance as previously reported (2,962,042) (1,890,899) (2,954,444) (1,883,301) Cumulated effect of change in accounting policy of a subsidiary (Note 1.6) - (10,802) - (10,802) Adjustment of retained earnings of subsidiary at beginning of period not included consolidated financial statements - 20,330 - 20,330 Beginning balance as restated (2,962,042) (1,881,371) (2,954,444) (1,873,773) Increase during period - net loss (321,554) (202,172) (321,554) (202,172) Decrease during period - - - - Ending balance (3,283,596) (2,083,543) (3,275,998) (2,075,945) Unrealized loss on non-current marketable securities (Note 2.5) Beginning balance (154,874) (255,754) (154,796) (254,592) Increase during period (8,252) - (8,330) - Decrease during period 101,875 (39,675) 101,875 (40,837) Ending balance (61,251) (295,429) (61,251) (295,429) (1,931,849) (607,634) (1,931,849) (702,243) Minority interests Beginning balance 64,164 61,616 - - - Increase during period 138 26,273 - - Decrease during period - - - - Ending balance 64,302 87,889 - - Total Deficit in Shareholders' Equity (1,867,547) (519,745) (1,931,849) (702,243) SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF DEFICIT FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2000 AND 1999 ( UNAUDITED ) (Amounts in thousand Baht) Consolidated Statements of Deficit Company's Separate Statements of Deficit 2000 1999 2000 1999 ( Restated ) ( Restated ) Deficit Beginning balance as previously reported (2,962,042) (1,890,899) (2,954,444) (1,883,301) Cumulated effect of change in accounting policy of a subsidiary (Note 1.6) - (10,802) - (10,802) Adjustment of retained earnings of subsidiary at beginning of period not included consolidated financial statements - 20,330 - 20,330 Beginning balance as restated (2,962,042) (1,881,371) (2,954,444) (1,873,773) Net loss (321,554) (202,172) (321,554) (202,172) Total Deficit (3,283,596) (2,083,543) (3,275,998) (2,075,945) Appropriated retained earnings Legal reserve 56,164 56,164 48,566 48,566 Total Deficit (3,227,432) (2,027,379) (3,227,432) (2,027,379) SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2000 AND 1999 ( UNAUDITED ) ( Amounts in thousand Baht ) Consolidated Statements Company's Separate Statements of Cash Flows of Cash Flows 2000 1999 2000 1999 ( Restated ) ( Restated ) CASH FLOWS FROM OPERATING ACTIVITIES Net loss (321,554) (202,172) (321,554) (202,172) Adjustments to reconcile net loss to net cash provided by (used in) operating activities Doubtful debts 16,855 20,604 18,974 2,847 Depreciation 20,903 23,482 18,425 19,149 Deferred charges written off 1,091 3,243 982 5,794 (Gain) loss on sales of equipment 760 (673) (2,405) (304) Equity in (profit) loss of subsidiaries and associated companies and joint ventures (7,279) (2,702) 30,284 35,635 Unrealized gain in marketable securities (14,985) (2,052) (14,985) (2,052) Allowance for decline in valuation of goods (49,374) (183) - - Loss on impairment of investments 114,123 - 111,053 - Loss on sales of condominiums 357 829 357 829 Unrealized losses on exchange rate 22,967 71,781 23,530 80,251 Contingent cost 35,760 (1,038) 35,760 (1,038) Loss on non-current marketable securities - 1,162 - - - Gain on taking possession - (2,330) - - Allowance for impairment of assets 4,262 - - - Minority interest 393 15,962 - - Changes in operating assets and liabilities (Increase) decrease in operating assets Accounts receivable 51,529 (10,246) 52,594 (39,861) Due from related parties 13,706 (91,127) 2,555 2,659 Retentions receivable (13,367) 26,608 (13,367) 26,767 Inventories 74,274 44,589 - - Other current assets (43,288) (31,824) (41,924) (33,887) Other assets 30,604 4,791 30,533 2,721 SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2000 AND 1999 ( UNAUDITED ) ( Amounts in thousand Baht ) Consolidated Statements Company's Separate Statements of Cash Flows of Cash Flows 2000 1999 2000 1999 ( Restated ) ( Restated ) Increase (decrease) in operating liabilities Accounts payable (101,240) (67,387) (94,960) (32,090) Due to related parties (1,447) (665) (2,771) (1,045) Advance receipt on contracts (92,553) 75,665 (94,297) 73,096 Other current liabilities 115,995 103,165 119,270 91,667 Other liabilities 29,842 717 (2,958) 717 Net Cash Provided by (Used in) Operating Activities (111,666) (19,801) (144,904) 29,683 CASH FLOWS FROM INVESTING ACTIVITIES Increase in loans and advances to directors and employees (9,034) (3,758) (9,354) (925) (Increase) Decrease in short-term loans to related parties (14,222) (557) (11,680) 24,504 Decrease in short-term investments - 3,798 - 3,798 Increase in notes receivable-financial institution - (1,430) - - Increase in investments (8,915) (97,181) (8,915) (120,171) Purchase of property and equipment (32,779) (19,737) (32,681) (18,859) Decrease in property, plant and equipment 4,289 30,088 3,942 4,289 Cash from sale of condominiums 1,790 5,583 1,790 5,583 Net Cash Used in Investing Activities (58,871) (83,194) (56,898) (101,781) CASH FLOWS FROM FINANCING ACTIVITIES Increase (Decrease) in bank overdrafts and loans from financial institutions (41,685) 36,729 8,998 5,815 Proceeds from short-term loans from directors 100 - - - Decrease in loans to related parties - 28,280 - 28,280 Net Cash Provided by (Used in) Financing Activities (41,585) 65,009 8,998 34,095 SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2000 AND 1999 ( UNAUDITED ) (Amounts in thousand Baht) Consolidated Statements Company's Separate Statements of Cash Flows of Cash Flows 2000 1999 2000 1999 (Restated) (Restated) NET DECREASE IN CASH AND CASH EQUIVALENTS (212,122) (37,986) (192,804) (38,003) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD (Notes 1.5 and 2.2) 342,474 794,792 317,132 771,608 CASH AT BANK PLEDGED AS COLLATERALS AT BEGINNING OF PERIOD (Notes 1.5 and 2.2) 854,310 84,030 854,087 84,030 CASH AT BANK PLEDGED AS COLLATERALS AT ENDING OF PERIOD (Notes 1.5 and 2.2) (947,744) (323,359) (947,521) (307,940) CASH AND CASH EQUIVALENTS AT END OF PERIOD (Notes 1.5 and 2.2) 36,918 517,477 30,894 509,695 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: Cash paid during the period Interest expense 1,446 12,284 1,185 3,569 Income tax 9,228 22,492 9,038 21,677 SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 (UNAUDITED) NOTE 1 GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1.1 General Information Sino-Thai Engineering and Construction Public Company Limited has operated major business in general construction. The major shareholder of the Company as at March 31, 2000 is the Charnvirakul family, who held 52.27% of total fully paid shares capital. The Company is major shareholder of SinoThai Construction Services Company Limited and SinoThai Resources Development Public Company Limited. As at March 31, 2000 and December 31, 1999, the Company has staffs for 584 persons and for 645 persons, respectively and staff costs for the three-month periods ended, March 31, 2000 and 1999 are in the amount of Baht 16.91 million and Baht 19.39 million, respectively in the consolidated financial statements. As at March 31, 2000 and December 31, 1999, the Company has staffs for 556 pe rsons and 560 persons, respectively and staff costs for the three-month periods ended March 31, 2000 and 1999 are in the amount of Baht 13.73 million and Baht 13.86 million, respectively in the separate financial statements. 1.2 Economic Environment The operations of Sino-Thai Engineering and Construction Public Company Limited ("the Company") and subsidiaries may continue to be influenced by the economic conditions in Thailand and the Asia Pacific Region in general. The consolidated financial statements and the separate financial statements of the Company reflect the management's current assessment of the impact of current economic conditions on the financial position of the Company. However, actual results could differ from the management estimates. 1.3 Basis of Consolidaion The consolidated financial statements and the separate financial statements of the Company have been presented in accordance with the Ministerial Regulation No. 7 (B.E. 2539), under the Public Company Limited Act B.E. 2535 and in conformity with generally accepted accounting principles in Thailand, and are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Thailand. As required by Thai law and regulatory requirements, the Company's financial statements thereon have been prepared in the Thai language. They have been translated into English for the convenience of the reader. The accompanying consolidated financial statements for the three month periods ended March 31, 2000 and for the year ended December 31, 1999 consist of the financial statements of Sino-Thai Engineering and Construction Public Company Limited, collectively "the Company", and the financial statements of subsidiaries, Sino-Thai Construction Services Company Limited, Sino-Thai Resources Development Public Company Limited and Sino-Thai Joint Venture which the company has the significant role to control and/or percentage of shareholding is considered to possess the ability to exercise significant influence over subsidiary in the financial and operating policy decisions, collectively "subsidiaries". The financial information of subsidiaries have been reviewed by us except for the financial statements of Sino-Thai Joint Venture which prepared by the Company's management and have not been reviewed by auditor The Company's separate financial statements for the three-month period ended March 31, 2000 includes investments in the above subsidiaries, associated companies and joint venture, which the Company has significant influence and/or has powers to participate in the financial and operating policy decisions by using equity method. The financial information of the subsidiaries, associated companies and joint venture prepared by the Company's management and have not been reviewed by auditor. All significant intercompany transactions and balances have been eliminated in preparing the consolidated financial statements. The financial information of the Company and subsidiaries includes in the consolidated financial statements are summarized as follows: Percentage of holding As at March 31, As at December 31, 2000 1999 1999 Direct Subsidiaries Sino-Thai Construction Services Company Limited 99.99 99.99 99.99 Sino-Thai Resources Development Public Company Limited 51.16 51.16 51.16 Sino-Thai Joint Venture 100.00 - 100.00 The consolidated financial statement for the three-month period ended March 31, 2000 and for the year ended December 31, 1999 includes the financial statements of subsidiaries which have not been reviewed by auditor. Their total assets, total revenues and net income (loss) reflected in percentage of total consolidated assets, total consolidated revenues and net income (loss) in the consolidated financial statement as follows: Assets Total revenues Net income (loss) March 31, December 31, March 31, March 31, 2000 1999 2000 2000 Subsidiary Sino Thai Joint Venture 1.28 1.25 0.52 0.46 The Company's separate financial statements for the three-month periods ended March 31,2000 and 1999 included profit (loss) of associated companies and joint ventures which have been that reflected to net income (loss) prepared by the management by using equity mehtod and have not been reviewed by the auditor in the separate financial statements as follows : 2000 1999 % % Associated companies HTR Corporation Limited 2.15 2.65 DKK Sino-Thai Engineering Company Limited 2.04 0.31 ACS Asia (1996) Company Limited - 0.09 Thai Maintenance Contracting Company Limited 0.37 0.49 Joint Ventures Philipp Holzmann (Thai)/U.T.M. Engineering/ Sino-Thai Joint Venture - 3.70 Zueblin W&F Stecon Joint Venture 2.02 0.042 The Joint Venture of Tomen Enterprise (Bangkok) Limited/Sino-Thai Engineering and Construction Public Company Limited/Totems Company Limited 0.003 - 1.4 Going concern The Company and subsidiaries have incurred net loss on operation for the periods ended March 31, 2000 and 1999, in the amount of Baht 321.55 million and Baht 202.17 million, respectively, as at March 31,2000 and December 31,1999, total current liabilities exceeded total current assets amount of Baht 3,436.74 million and Baht 3,264.23 million, respectively in the consolidated financial statements and Baht 3,434.31 million and Baht 3,252.96 million, respectively in the separate financial statements. Total liabilities exceeded total assets amount of Baht 1,867.55 million and Baht 1,639.49 million, respectively in the consolidated financial (more)