FINANCIAL STATEMENTS AS OF 31 MARCH 1998

PHATRA LEASING PUBLIC COMPANY LIMITED INTERIM FINANCIAL STATEMENTS FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED MARCH 31, 1998 (With Comparative Figures for The Three-Month and Six-Month Periods Ended March 31, 1997) AND AUDITORS REPORT EXPRESSED IN Thai Baht The Shareholders Phatra Leasing Public Company Limited We have made a review of the balance sheet of Phatra Leasing Pub lic Company Limited as at March 31, 1998, the related statements of income, changes in shareholders equity and retained earnings f or the three-month and six-month periods then ended, in accordanc e with standards established by the Institute of Certified Accoun tants and Auditors of Thailand. The financial statements for the three-month and six-month periods ended March 31, 1997, which ar e presented for comparative purposes, were reviewed by other audi tors whose report was dated April 29, 1998 and stated the conclus ion that such auditors were not aware of any material modificatio ns that should be made to the said interim financial statements f or them to be in conformity with generally accepted accounting pr inciples. A review of interim financial statements consists principally of obtaining an understanding of the system for the preparation of interim financial statements, applying analytical review procedur es to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepte d auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modificati ons that should be made to the interim financial statements for t he three-month and six-month periods ended March 31, 1998, for th em to be in conformity with generally accepted accounting princip les. The financial statements of Phatra Leasing Public Company Limite d for the year ended September 30, 1997 were audited by other aud itors, who expressed an unqualified opinion thereon under the rep ort dated November 14, 1997. PRASIT MUSIKABHANTU C.P.A. (THAILAND) Registration No. 2675 April 24, 1998 UNAUDITED REVIEWED PHATRA LEASING PUBLIC COMPANY LIMITED BALANCE SHEET MARCH 31, 1998 (With Comparative Figures As at March 31, 1997) A S S E T S In Thousand Baht 1998 1997 CURRENT ASSETS (Note 3) Cash on hand and in banks 27,018 27,352 Short-term investment in promissory notes 35,063 - Leasing receivables under operating lease contracts - net 69,136 69,085 Receivables under finance lease contracts - net 435,251 949,786 Prepaid expenses 27,364 42,856 Other current assets 31,795 43,365 Total Current Assets 625,627 1,132,444 INVESTMENTS IN SHARES - At Cost (Note 3) Associated company 245 245 Other company 5,000 5,000 Total Investments in Shares 5,245 5,245 PROPERTY AND EQUIPMENT - Net 1,638,482 1,932,594 PROPERTY FORECLOSED Land 17,341 17,341 Others - net 22,788 9,239 Total Property Foreclosed 40,129 26,580 OTHER ASSETS Deferred income tax 170,731 168,935 Other receivable - net 31,370 47,840 Withholding tax deducted at source and others 7,740 905 Total Other Assets 209,841 217,680 TOTAL ASSETS 2,519,324 3,314,543 See accompanying Notes to Interim Financial Statements. (With Mr. Prasit Musikabhantus report dated April 24, 1998) UNAUDITED REVIEWED PHATRA LEASING PUBLIC COMPANY LIMITED BALANCE SHEET MARCH 31, 1998 (With Comparative Figures As at March 31, 1997) LIABILITIES AND SHAREHOLDERS EQUITY In Thousand Baht 1998 1997 CURRENT LIABILITIES (Note 3) Bank overdrafts and loans from financial institutions 384,095 412,951 Accounts payable - trade 23,329 34,934 Current portion of long-term loans 820,900 - Loan from and payables to related companies 337,579 518,837 Rental income received in advance 11,047 13,148 Accrued interest payable 16,168 20,207 Income tax payable - 41,831 Accrued expenses and other current liabilities 9,844 13,559 Total Current Liabilities 1,602,962 1,055,467 LONG-TERM LOANS Related company (Note 3) 100,000 100,000 Other companies - 1,280,625 ADVANCES RECEIVED FROM LESSEES FOR EXERCISING PURCHASE OPTION (Note 3) 104,297 136,476 Total Liabilities 1,807,259 2,572,568 SHAREHOLDERS EQUITY Share capital - common share; Baht 10 par value Authorized, issued and fully paid-up 30,000,000 shares 300,000 300,000 Premium on share capital 156,000 156,000 Retained earnings Appropriated for reserve fund 9,216 7,696 Unappropriated 246,849 278,279 Total Shareholders Equity 712,065 741,975 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 2,519,324 3,314,543 See accompanying Notes to Interim Financial Statements. (With Mr. Prasit Musikabhantus report dated April 24, 1998) UNAUDITED REVIEWED PHATRA LEASING PUBLIC COMPANY LIMITED STATEMENTS OF INCOME FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED MARCH 31, 1998 (With Comparative Figures For The Three-Month And Six -Month Peri ods Ended March 31, 1997) In Thousand Baht Three months ended Six months ended March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997 REVENUES (Note 3) Rental income from operating lease contracts 215,061 214,215 442,138 413,228 Income from finance lease contracts 13,046 26,863 33,556 59,572 Other income 26,533 13,614 35,115 16,020 Total Revenues 254,640 254,692 510,809 488,820 COSTS AND EXPENSES (Note 3) Direct rental costs 162,209 139,990 318,368 269,497 General and administrative expenses 31,619 25,914 80,002 48,470 Interest expense 55,985 58,996 117,547 115,344 Directors remuneration 216 238 288 476 Total Costs and Expenses 250,029 225,138 516,205 433,787 INCOME (LOSS) BEFORE INCOME TAX AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE 4,611 29,554 (5,396) 55,033 INCOME TAX - 10,718 - 19,728 INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 4,611 18,836 (5,396) 35,305 CUMULATIVE EFFECT OF ACCOUNTING CHANGE (Note 1) - - (19,616) - NET INCOME (LOSS) 4,611 18,836 (25,012) 35,305 UNAUDITED REVIEWED -2- In Thousand Baht Three months ended Six months ended March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997 Earnings (Loss) per Share (Baht) Income (loss) before cumulative effect of accounting change 0.15 0.63 (0.18) 1.18 Cumulative effect of accounting change - - (0.65) - Net income (loss) 0.15 0.63 (0.83) 1.18 Pro Forma Amounts Net income (loss) 4,611 16,730 (5,396) 31,599 Earnings (Loss) per Share (Baht) 0.15 0.55 (0.18) 1.05 See accompanying Notes to Interim Financial Statements. (With Mr. Prasit Musikabhantus report dated April 24, 1998) UNAUDITED REVIEWED PHATRA LEASING PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED MARCH 31, 1998 (With Comparative Figures For The Three-Month And Six -Month Peri ods Ended March 31, 1997) In Thousand Baht Three months ended Six months ended March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997 Common Share Capital Balance, beginning of period 300,000 300,000 300,000 300,000 Addition - - - - Balance, end of period 300,000 300,000 300,000 300,000 Premium on Share Capital Balance, beginning of period 156,000 156,000 156,000 156,000 Addition - - - - Balance, end of period 156,000 156,000 156,000 156,000 Retained Earnings Appropriated Reserve Fund Balance, beginning of period 9,216 7,696 9,216 7,696 Addition - - - - Balance, end of period 9,216 7,696 9,216 7,696 Unappropriated Retained Earnings Balance, beginning of period 242,238 289,443 271,861 272,974 Addition (Deduction) - net income (loss) 4,611 18,836 (25,012) 35,305 Deduction Dividends (Baht 1 per share) - (30,000) - (30,000) Balance, end of period 246,849 278,279 246,849 278,279 TOTAL SHAREHOLDERS EQUITY 712,065 741,975 712,065 741,975 See accompanying Notes to Interim Financial Statements. (With Mr. Prasit Musikabhantus report dated April 24, 1998) UNAUDITED REVIEWED PHATRA LEASING PUBLIC COMPANY LIMITED STATEMENTS OF RETAINED EARNINGS FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED MARCH 31, 1998 (With Comparative Figures For The Three-Month And Six -Month Peri ods Ended March 31, 1997) In Thousand Baht Three months ended Six months ended March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997 UNAPPROPRIATED RETAINED EARNINGS Brought forward from prior period 242,238 289,443 271,861 272,974 Net income (loss) for the period 4,611 18,836 (25,012) 35,305 Cash Dividends (Baht 1 per share) - (30,000) - (30,000) Total Unappropriated Retained Earnings, End of period 246,849 278,279 246,849 278,279 APPROPRIATED RETAINED EARNINGS Reserve fund 9,216 7,696 9,216 7,696 TOTAL RETAINED EARNINGS 256,065 285,975 256,065 285,975 See accompanying Notes to Interim Financial Statements. (With Mr. Prasit Musikabhantus report dated April 24, 1998) PHATRA LEASING PUBLIC COMPANY LIMITED NOTES TO INTERIM FINANCIAL STATEMENTS MARCH 31, 1998 AND 1997 1. ACCOUNTING CHANGES Starting from October 1, 1997, the Company changed the method o f the recognition of rental income from operating lease contracts and income from finance lease contracts for lessees who had not paid rentals for more than six months, which was previously recog nized as income on the accrual basis over the term of leases. Un der the changed method, such income is recognized on the accrual basis only for six months on the grounds of conservatism of reven ue recognition. As a result of the change, revenues for the six- month period ended March 31, 1998 reduced by approximately Baht 8 .6 million. The cumulative effect of this change up to September 30, 1997 was separately presented in the statement of income. 2. EARNINGS (LOSS) PER SHARE Earnings (loss) per share is determined by dividing the income (loss) by the number of shares outstanding at the end of the per iods. 3. TRANSACTIONS WITH RELATED COMPANIES The Company has certain transactions with its related companies . These companies are related through common shareholdings and/o r management. The effects of these transactions are reflected in the accompanying financial statements. Investment in shares of an associated company which is held for long-term purpose is valued at cost. The Company has not adjust ed the investment in shares of the associated company to the equi ty method since the effect is not material. Significant account balances with the related companies, arisin g from transactions in the normal course of business, as of March 31, 1998 and 1997 and for the three-month and six-month periods then ended were as follows: In Thousand Baht Three months ended Six months ended March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997 Cash at banks 26,898 27,158 26,898 27,158 Promissory notes 35,063 - 35,063 - Leasing receivables under operating lease contracts 1,579 2,510 1,579 2,510 Receivables under finance lease contracts - net 11,439 23,746 11,439 23,746 - 2 - In Thousand Baht Three months ended Six months ended March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997 Prepaid expenses and other current assets 23,337 31,168 23,337 31,168 Bank overdrafts and loans from financial institutions 304,058 178,112 304,058 178,112 Short-term loans from and payables to related companies 337,579 518,837 337,579 518,837 Long-term loan from related company 100,000 100,000 100,000 100,000 Accrued expenses and other current liabilities 1,521 910 1,521 910 Advances received from lessees for exercising purchase option 1,926 5,812 1,926 5,812 Rental income from operating lease contracts 37,137 32,239 69,768 49,178 Income from finance lease contracts 428 964 816 2,142 General and administrative expenses 163 157 315 360 Interest expense 24,513 14,999 39,340 38,070 4. CONTINGENT LIABILITIES As at March 31, 1998, the Company was contingently liable for l etters of guarantee issued by a local bank amounting to approxima tely Baht 0.4 million. 5. RECLASSIFICATION OF ACCOUNTS Certain accounts in the 1997 interim financial statements were reclassified to conform with the 1998 interim financial statement s presentation.