ANNUAL FINANCIAL STATEMENTS

PHATRA LEASING PUBLIC COMPANY LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 1998 (With Comparative Figures for The Year Ended September 30, 1997) AND AUDITORS REPORT EXPRESSED IN Thai Baht The Shareholders Phatra Leasing Public Company Limited We have examined the balance sheet of Phatra Leasing Public Company Limited as at September 30, 1998, and the related statements of income, changes in shareholders equity, retained earnings and cash flows for the year then ended. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such ot her auditing procedures as we considered necessary in the circumstances. The financial statements of Phatra Leasing Public Company Limited for the year ended September 30, 1997, which are presented here in for comparative purposes, were audited by other auditors whose report dated November 14, 1997 expressed an unqualified opinion on those financial statements. In our opinion, the financial statements referred to above present fairly the financial position of Phatra Leasing Public Company Limited at September 30, 1998, and the results of its operations, the changes in shareholders equity and the cash flows for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preced ing year, except for the change, with which we concur, in the method of income recognition on rental income from operating lease contracts and income from finance lease contracts as described in Note 1. PRASIT MUSIKABHANTU C.P.A. (THAILAND) Registration No. 2675 November 6, 1998 PHATRA LEASING PUBLIC COMPANY LIMITED BALANCE SHEET SEPTEMBER 30, 1998 (With Comparative Figures As At September 30, 1997) A S S E T S In Baht 1998 1997 CURRENT ASSETS Cash on hand and in banks (Note 2) 33,853,673 39,135,569 Short-term investment in promissory notes (Note 2) 40,532,862 40,140,666 Leasing receivables under operating lease contracts (Notes 2 and 3) 67,116,225 83,702,417 Less Allowance for doubtful accounts (36,085,963) (12,521,923) Leasing receivables under operating lease contracts - net 31,030,262 71,180,494 Receivables under finance lease contracts (Notes 2 and 4) 335,474,319 705,490,031 Less Allowance for doubtful accounts (83,660,867) (30,276,628) Receivables under finance lease contracts - net 251,813,452 675,213,403 Other current assets Other receivable - 48,158,418 Prepaid expenses (Note 2) 30,131,425 27,319,980 Others (Note 2) 12,167,933 27,898,547 Total Current Assets 399,529,607 929,047,077 INVESTMENTS IN SHARES - At Cost Associated company (Notes 2 and 5) 245,000 245,000 Other company 5,000,000 5,000,000 Total Investments in Shares 5,245,000 5,245,000 PROPERTY AND EQUIPMENT - Net (Note 6) 1,416,984,422 1,820,858,188 PROPERTY FORECLOSED - Net (Note 7) 54,853,064 39,785,067 OTHER ASSETS Deferred income tax - net 201,837,181 155,919,311 Other receivables - net of allowance for doubtful accounts of Baht 57,931,393 in 1998 2,430,691 - Others - net 14,388,082 10,779,536 Total Other Assets 218,655,954 166,698,847 TOTAL ASSETS 2,095,268,047 2,961,634,179 See accompanying Notes to Financial Statements. (With Mr. Prasit Musikabhantus report dated November 6, 1998) PHATRA LEASING PUBLIC COMPANY LIMITED BALANCE SHEET SEPTEMBER 30, 1998 (With Comparative Figures As At September 30, 1997) LIABILITIES AND SHAREHOLDERS EQUITY In Baht 1998 1997 CURRENT LIABILITIES Bank overdraft and loans from financial institutions (Notes 2 and 8) 243,462,283 741,760,700 Accounts payable - trade 6,405,298 6,461,814 Current portion of long - term loans (Notes 2 and 10) 412,687,398 820,900,000 Short - term loans from and payables to related companies (Notes 2 and 9) 352,845,501 383,044,671 Other current liabilities Rental income received in advance (Note 2) 9,904,766 13,178,891 Value added tax payable 7,914,087 7,976,324 Accrued interest (Note 2) 458,031 20,816,082 Income tax payable 6,810,904 - Others (Note 2) 7,734,968 5,769,728 Total Current Liabilities 1,048,223,236 1,999,908,210 LONG-TERM LOANS FROM RELATED COMPANIES (Notes 2 and 10) 400,760,000 100,000,000 ADVANCES RECEIVED FROM LESSEES FOR EXERCISING PURCHASE OPTION (Notes 2 and 12) 79,096,792 124,648,585 Total Liabilities 1,528,080,028 2,224,556,795 SHAREHOLDERS EQUITY Share capital - common share; Baht 10 par value Authorized, issued and fully paid-up 30,000,000 shares 300,000,000 300,000,000 Premium on share capital 156,000,000 156,000,000 Retained earnings Appropriated for reserve fund (Note 13) 9,216,172 9,216,172 Unappropriated 101,971,847 271,861,212 Total Shareholders Equity 567,188,019 737,077,384 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 2,095,268,047 2,961,634,179 See accompanying Notes to Financial Statements. (With Mr. Prasit Musikabhantus report dated November 6, 1998) PHATRA LEASING PUBLIC COMPANY LIMITED STATEMENT OF INCOME FOR THE YEAR ENDED SEPTEMBER 30, 1998 (With Comparative Figures for The Year Ended September 30, 1997) In Baht 1998 1997 REVENUES Rental income from operating lease contracts (Notes 1 and 2) 848,908,332 836,697,020 Income from finance lease contracts (Notes 1 and 2) 58,898,226 101,897,258 Other income Gain on sale of assets 29,306,790 14,195,026 Gain on exchange rate - 12,933,829 Penalty income from delay payment 21,044,651 9,281,147 Others 12,866,049 15,947,553 Total Revenues 971,024,048 990,951,833 COSTS AND EXPENSES Direct rental costs 615,480,062 580,788,445 General and administrative expenses (Note 2) 262,173,229 113,539,519 Interest expense (Note 2) 224,828,555 249,600,467 Directors remuneration 432,000 916,571 Total Costs and Expenses 1,102,913,846 944,845,002 INCOME (LOSS) BEFORE INCOME TAX AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE (131,889,798) 46,106,831 INCOME TAX - 15,699,316 INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (131,889,798) 30,407,515 CUMULATIVE EFFECT OF ACCOUNTING CHANGE (Note 1) (37,999,567) - NET INCOME (LOSS) (169,889,365) 30,407,515 Earnings (Loss) per Share Income (loss) before cumulative effect of accounting change (4.40) 1.01 Cumulative effect of accounting change (1.26) - Net income (loss) (5.66) 1.01 Pro Forma Amounts Net income (loss) (131,889,798) 9,261,214 Earnings (loss) per share (4.40) 0.31 See accompanying Notes to Financial Statements. (With Mr. Prasit Musikabhantus report dated November 6, 1998) PHATRA LEASING PUBLIC COMPANY LIMITED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY FOR THE YEAR ENDED SEPTEMBER 30, 1998 (With Comparative Figures for The Year Ended September 30, 1997) In Baht 1998 1997 Common Share Capital Balance, beginning of year 300,000,000 300,000,000 Addition - - Balance, end of year 300,000,000 300,000,000 Premium on Share Capital Balance, beginning of year 156,000,000 156,000,000 Addition - - Balance, end of year 156,000,000 156,000,000 Retained Earnings Appropriated Reserve Fund (Note 13) Balance, beginning of year 9,216,172 7,695,796 Addition - 1,520,376 Balance, end of year 9,216,172 9,216,172 Unappropriated Retained Earnings Balance, beginning of year 271,861,212 272,974,073 Addition (deduction) - net income (loss) (169,889,365) 30,407,515 Deduction - dividends (Baht 1 per share for 1997) - (30,000,000) - reserve fund - (1,520,376) Balance, end of year 101,971,847 271,861,212 TOTAL SHAREHOLDERS EQUITY 567,188,019 737,077,384 See accompanying Notes to Financial Statements. (With Mr. Prasit Musikabhantus report dated November 6, 1998) PHATRA LEASING PUBLIC COMPANY LIMITED STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED SEPTEMBER 30, 1998 (With Comparative Figures for The Year Ended September 30, 1997) In Baht 1998 1997 UNAPPROPRIATED RETAINED EARNINGS: Brought Forward 271,861,212 272,974,073 Less Appropriated from previous years earnings: Dividends - (30,000,000) Reserve fund (Note 13) - (1,520,376) Net income (loss) for the year (169,889,365) 30,407,515 Total Unappropriated Retained Earnings 101,971,847 271,861,212 APPROPRIATED RETAINED EARNINGS: Reserve Fund (Note 13) 9,216,172 9,216,172 TOTAL RETAINED EARNINGS 111,188,019 281,077,384 (More)