ANNUAL FINANCIAL STATEMENTS 1999 BY PL

1999 1998 Receivables under finance lease contracts (including portion due within one year from September 30, 1999 amounting to Baht 98,022,268) 211,131,806 364,239,963 Less Unearned interest income (including portion due within one year from September 30, 1999 amounting to Baht 6,330,333) ( 11,467,889) ( 28,765,644) Net 199,663,917 335,474,319 The 53 receivables under finance lease contracts which may be uncollectible as at September 30, 1999, categorized by aging schedules, were as follows: In Thousand Baht Over 3 months to 6 months 7,069 Over 6 months to 12 months 35,680 Over 12 months 46,846 Total 89,595 - 6 - The Company provided allowance for doubtful accounts covering receivables under finance lease contracts equal to the estimated losses that may be incurred in the collection of receivables amounted to approximately Baht 84.3 million. 5. INVESTMENT IN ASSOCIATED COMPANY - At Cost In Baht Percentage of Company's Name Business Relation Holding (%) Investment Dividend Associated Company Sarathi Co., Ltd. Car driving service Shareholder 49 245,000 - 6. PROPERTY AND EQUIPMENT - At Cost In Baht 1999 1998 Assets held for lease under operating lease contracts (mainly transportation equipment) (Note 12) 1,989,414,993 2,382,690,723 Office condominium (including land) 113,211,596 113,211,596 Furniture, fixtures and office equipment 16,562,384 16,987,544 Transportation equipment 24,562,019 17,986,553 Assets held for future lease and assets in transit for future lease 12,857,553 4,304,545 Total 2,156,608,545 2,535,180,961 Less : accumulated depreciation ( 975,486,386) (1,103,641,783) allowance for decline in value of assets held for lease ( 10,663,855) ( 14,554,756) Property and Equipment - Net 1,170,458,304 1,416,984,422 Depreciation charges for the years ended September 30, 1999 and 1998 amounted to approximately Baht 424.4 million and Baht 534.8 million, respectively. - 7 - 7. PROPERTY FORECLOSED In Baht 1999 1998 Land 40,430,855 40,430,855 Transportation equipment 26,783,477 24,239,233 Condominium 5,227,066 5,227,066 Total 72,441,398 69,897,154 Less : accumulated depreciation (19,269,325) (15,044,090) allowance for decline in value ( 3,800,000) - Net 49,372,073 54,853,064 Depreciation charges for the years ended September 30, 1999 and 1998 amounted to approximately Baht 6.2 million and Baht 8.8 million, respectively. 8. BANK OVERDRAFT AND LOANS FROM FINANCIAL INSTITUTION In Baht 1999 1998 Bank overdraft 2,948,198 495,754 Note payable 60,000,000 - Loan from bank - 242,966,529 Total 62,948,198 243,462,283 As at September 30, 1999, the Company has overdraft line and other credit facilities with a related local bank totalling Baht 1,250 million, which bear interest at the rates specified in the agreements. 9. SHORT-TERM LOANS FROM AND PAYABLES TO RELATED COMPANIES In Baht 1999 1998 Short-term loans 284,000,000 254,000,000 Insurance premium payable 7,920,063 3,705,124 Accrued interest on short-term loans 1,730,308 1,047,226 Accrued interest on long-term loans - 4,093,151 Total 293,650,371 262,845,501 - 8 - As at September 30, 1999, the Company has credit facilities with two related insurance companies totalling Baht 500 million which bear interest at market rate. The above short-term loans are avaled by various local banks. 10. LONG-TERM LOANS FROM RELATED COMPANIES In Baht 1999 1998 Loan from bank 568,616,730 803,447,398 Loan from an insurance company 10,000,000 100,000,000 Total 578,616,730 903,447,398 Less portion due within one year (342,080,218) (502,687,398) Net 236,536,512 400,760,000 The Company entered into loan and credit facilities agreement with a related local bank. The loan bears interest at the rate specified in the agreement and is repayable in installments at the amounts indicated in the agreement. The loan agreement contains certain conditions and restrictions which include, among others, maintaining certain financial ratios, etc.. Loan from a related insurance company (Note 9) amounted to Baht 100 million in 1998 (avaled by two local banks). The loan was scheduled to be repaid during December 1998 to November 1999 and bears interest at market rate. During the year 1999, the Company repaid the loan amounting to Baht 90 million by obtaining the short-term loan from such insurance company at the same amount (Note 9). As at September 30, 1999 the outstanding balance of loan amounted to Baht 10 million (avaled by a local bank) will be repayable in November 1999. 11. EMPLOYEES' PROVIDENT FUND The Company established a contributory employees' provident fund for its employees in accordance with the terms and conditions prescribed in the Ministerial Regulation No. 162 (B.E. 2526) issued under the Revenue Code Governing Provident Funds. Membership is voluntary upon attaining permanent status. The Company contributes to the fund monthly at a certain percentage of the employees basic salaries. - 9 - On June 26, 1990, the provident fund was registered with the Ministry of Finance as a juristic entity under the provisions of the Provident Fund Act B.E. 2530. The Ministry of Finance also approved the transfer of the cumulative amount of the contributory employees' provident fund under the Ministerial Regulation No. 162 (B.E. 2526) to the registered fund. The fund is managed by a Fund Manager in accordance with the terms and conditions prescribed in the Ministerial Regulation No. 2 (B.E. 2532) issued under the Provident Fund Act. B.E. 2530. Total contributions by the Company for the years ended September 30, 1999 and 1998 amounted to Baht 1,367,038 and Baht 1,324,132, respectively. 12. ASSETS HELD FOR LEASE As at September 30, 1999 and 1998, the Company had a schedule by years of minimum future rentals for the next five years of assets held for operating lease as follows: In Thousand Baht Year ending September 30 1999 1998 1999 - 639,374 2000 520,840 386,554 2001 320,500 180,559 2002 188,655 58,707 2003 76,259 275 2004 1,295 - Total 1,107,549 1,265,469 Under the provisions of certain lease agreements, the lessees have an option to purchase the leased assets upon the expiration of the lease terms. In this connection, the lessees are required to pay the sums in advance as guarantee for exercising the purchase option. As at September 30, 1999 and 1998, unguaranteed residual value of assets held for lease under finance lease contracts amounted to approximately Baht 23.7 million and Baht 38.2 million, respectively. - 10 - 13. RESERVE FUND This represents the reserve which the Company has appropriated under the provisions of the Limited Public Company Act which require the Company to appropriate at least 5% of its annual net income after deduction of the deficit brought forward (if any) as reserve fund until the reserve reaches 10% of authorized share capital. The reserve is not available for dividend distribution. 14. INCOME TAX No income tax is payable for the year 1999 because the Company had net taxable loss. 15. CONTINGENT LIABILITY As at September 30, 1999, the Company was contingently liable for letters of guarantee issued by a local bank amounting to approximately Baht 0.07 million. 16. RECLASSIFICATION OF ACCOUNTS Certain accounts in the 1998 financial statements were reclassified to conform with the 1999 financial statement presentation. 17. SEGMENT FINANCIAL INFORMATION The Company does not present the segment financial information in the financial statements since the Company engages in only the business on leasing assets under lease agreements. 18. UNCERTAINTIES OF ECONOMIC SITUATION The operations of the Company have been affected, and may continue to be affected for the foreseeable future, by the adverse economic conditions in Thailand and in the Asia Pacific region, including the volatile foreign exchange rates, slowdown in economic growth and the general deterioration of the economies of countries in the Asia Pacific region. Further, it is not possible to determine the future effect that a continuation of the economic crisis may have on the Company's liquidity and earnings. The accompanying financial statements do not include any adjustment that might result from these uncertainties. - 11 - 19. COMPUTER REMEDIATION PLAN FOR THE YEAR 2000 ("UNAUDITED") As at September 30, 1999, the Company had completed the installation of the computer system in connection with the storage and data processing in order to deal with the effect of the Year 2000. The cost of the project is approximately Baht 0.6 million, which is recorded in the period incurred. The Company, however, still faces risks that other companies with whom the Company does business may be unsuccessful in their computer remedy projects within the time limit. However, the Company expects that the impact, if any, will not be significant to the Company's operations. 20. BASIS OF FINANCIAL STATEMENT PRESENTATION The Company maintains its official accounting records in Thai Baht and prepares its statutory financial statements in the Thai language in conformity with financial accounting standards in Thailand. Certain accounting principles applied by the Company that conform with financial accounting standards and accounting principles in Thailand may not conform with generally accepted accounting principles in other countries. Accordingly, these financial statements are not designed for those who are not informed about Thailand accounting principles and practices. For the convenience of the reader, the accompanying financial statements have been translated into English from the statutory Thai language financial statements which are issued for domestic reporting purposes.