26 March 1999
ANNUAL FINANCIAL STATEMENTS
FINANCIAL STATEMENTS AND AUDITORS' REPORT
SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED
AND SUBSIDIARIES
DECEMBER 31, 1998 AND 1997
Auditors' Report
To the Shareholders of Sino-Thai Engineering and Construction Public Company Limited:
We have audited the consolidated balance sheet of Sino-Thai Engineering and Construction
Public Company Limited and subsidiaries as at December 31, 1998, and the related consolidated statements of
income, changes in shareholders' equity deficit, retained earnings (deficit) and cash flows for the year then ended and
the separate financial statements of Sino-Thai Engineering and Construction Public Company Limited for the year
then ended. The Company's management are responsible for the correctness and completeness of information
presented in these financial statements. Our responsibility is to report on these financial statements based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining , on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our report.
For the year ended December 31, 1998, the Company's current liabilities exceeded current assets
amounting to approximately Baht 2,918.02 million and total liabilities exceeded total assets amounting to
approximately Baht 468.76 million. The Company has default the loan contract due to the unability to maintain the
financial ratio. Accordingly ,the lender may has a right to call in debts immediately. At present, the Company is
negotiating the restructure of its loans. The operations of the Company have been affected and may continue to be
influenced for the foreseeable future by the economic conditions in Thailand and the Asia Pacific Region in general.
These factors will probably cause a doubt that the Company will have a problem to continue as a going concern. The
financial statements are prepared in accordance with generally accepted accounting principles and on a going
concern basis, therefore, it does not include any adjustment relating to recoverability and classification of recorded
assets amount or the amounts and classification of liabilities that may be necessary should the Company be unable to
continue in existence.
The financial statement of Sino-Thai Resources Development Public Company Limited and Siam
Dimension Stone Company Limited which are included in the consolidated financial statements for the year ended
December 31, 1998, were audited by ourselves in our report dated February 18, 1999, we do not express about the
entity's ability to continue as a going concern.
Because of the results of the uncertainty of the Company to continue as a going concern as
described in the third and fourth paragraphs, which might have a significant effect on the financial position, results of
operations and cash flows, we do not express an opinion on the financial statements of Sino-Thai Engineering and
Construction Public Company Limited and subsidiaries and the separate financial statements of Sino-Thai
Engineering and Construction Public Company Limited for the year ended December 31,1998.
The financial statements of Sino-Thai Engineering and Construction Public Company Linited and
subsidiaries and the separate financial statements of Sino-Thai Engineering and Construction Public Company
Limited for the year ended December 31, 1997, shown for comparative purposes, were audited by ourselves. In our
audit report dated February 20, 1998 we express a qualified opinion on those financial statements except for the
effects on the financial statement the Company has not set up a provision for such accounts receivable amounting to
approximately Baht 513.27 million and subject to the effects of any adjustment on the financial statement had we
been able to audit, the financial statements of the subsidiary and associated companies, as might have been required
had the outcome of the uncertainty about the Company's ability to continue as a going concern. Presently, Those
uncertainties are still existing.
Nirand Lilamethwat
Certified Public Accountant
Registration Number 2316
KPMG Audit (Thailand) Limited
Bangkok, February 22, 1999
The accompanying financial statements 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. The standards, procedures and practices to audit such financial statements are
those generally accepted and applied in Thailand.
SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS AS AT DECEMBER 31, 1998 AND 1997
(Amounts in Baht) CONSOLIDATED THE COMPANY
ASSETS 1998 1997 1998 1997
CURRENT ASSETS
Cash in hand and at banks (Notes 4 and 6) 878,822,655.94 43,409,119.04 855,637,819.99 42,400,691.97
Short-term investment
Notes receivable - financial institutes 2,014,909.24 41,620,763.07 - -
Investment in listed securities (Note 4) 120,467,345.94 105,053,376.13 120,462,785.94 104,975,076.13
Total Short-Term Investment 122,482,255.18 146,674,139.20 120,462,785.94 104,975,076.13
Accounts receivable - net (Notes 4 and 7) 1,205,268,193.61 2,231,412,185.27 1,080,614,979.59 2,118,012,934.61
Due from related parties - net (Notes 4 and 5) 67,420,200.54 65,896,147.37 76,108,451.68 56,824,627.15
Short-term loans to related parties (Note 5.4) 33,363,792.69 - 198,534,192.69 -
Retentions receivable - net (Notes 4 and 8) 300,493,956.76 195,845,490.89 296,418,682.36 192,054,295.56
Inventories - net (Notes 4 and 9) 221,230,222.18 310,199,138.19 - -
Other current assets - net (Notes 4 and 10)
Advances to suppliers 42,813,872.37 32,807,033.69 42,813,872.37 32,807,033.69
Withholding corporate tax 129,053,933.10 - 128,870,481.49 -
Others 47,252,604.77 64,198,917.78 34,822,974.65 29,030,510.87
Total Other Current Assets 219,120,410.24 97,005,951.47 206,507,328.51 61,837,544.56
Total Current Assets 3,048,201,687.14 3,090,442,171.43 2,834,284,240.76 2,576,105,169.98
INVESTMENTS AND LOANS (Notes 4 and 5)
Joint ventures 7,837,461.49 670,000,000.00 7,837,461.49 670,000,000.00
Related parties 325,352,262.80 512,988,653.78 441,642,425.94 631,025,820.41
Other parties 272,508,923.00 366,169,867.38 238,308,923.00 297,619,840.53
Total Investments and Loans 605,698,647.29 1,549,158,521.16 687,788,810.43 1,598,645,660.94
EXCESS OF COST OVER BOOK VALUE OF INVESTMENT (Note 2) 72,766,885.98 83,406,336.66 - -
PROPERTY, PLANT AND EQUIPMENT - NET
(Notes 4 and 11) 1,809,243,534.29 1,917,884,560.86 1,449,292,745.93 1,512,806,493.34
OTHER ASSETS - NET (Notes 4 and 12)
Loans and advances to directors and employees 14,422,872.35 24,302,691.41 10,192,138.81 15,716,305.33
Condominiums 93,624,699.81 113,286,331.09 93,624,699.81 113,286,331.09
Advance payments on condominiums - 53,944,655.45 - 53,944,655.45
Withholding corporate tax 285,756,757.44 283,718,076.60 283,010,523.94 283,718,076.60
Others 71,545,610.78 75,320,919.49 45,410,517.76 40,763,177.39
Total Other Assets 465,349,940.38 550,572,674.04 432,237,880.32 507,428,545.86
Total Assets 6,001,260,695.08 7,191,464,264.15 5,403,603,677.44 6,194,985,870.12
_________________________________ _________________________________
Director Director
See notes to financial statements
SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES
BALANCE SHEETS AS AT DECEMBER 31, 1998 AND 1997
(Amounts in Baht) CONSOLIDATED THE COMPANY
LIABILITIES AND SHAREHOLDERS' EQUITY DEFICIT 1998 1997 1998 1997
CURRENT LIABILITIES
Bank overdrafts and loans from
financial institutes (Note 4) 956,126,178.37 1,295,109,272.50 812,805,744.11 900,203,021.55
Accounts payable 1,141,761,462.00 1,304,030,818.04 1,043,810,772.01 1,160,465,489.07
Due to related parties (Note 5) 4,161,936.26 39,827,920.37 5,318,731.51 53,241,676.65
Current portion of long-term loans (Note 14) - 9,750,000.00 - -
Current portion of hire purchase creditors 23,232,578.52 22,619,120.68 23,232,578.52 22,619,120.68
Long-term loans in default (Note 14) 3,282,650,000.00 - 3,135,650,000.00 -
Advance received on contracts 317,162,098.48 557,993,996.15 315,245,591.89 448,053,771.04
Other current liabilities
Accrued interest payable 248,102,876.75 73,810,339.67 225,283,713.65 73,810,339.67
Deferred value added tax 69,586,451.91 101,568,759.43 66,290,927.55 101,568,759.43
Provision for contingent cost 71,289,018.81 30,742,202.00 64,370,930.47 30,742,202.00
Others 71,014,525.86 58,193,378.77 60,296,130.88 46,064,983.45
Total Other Current Liabilities 459,992,873.33 264,314,679.87 416,241,702.55 252,186,284.55
Total Current Liabilities 6,185,087,126.96 3,493,645,807.61 5,752,305,120.59 2,836,769,363.54
PROVISION FOR VALUATION OF
INVESTMENT (Note 13) - 31,931,326.25 - -
LONG-TERM LOANS (Note 14) - 4,149,510,000.00 - 4,042,260,000.00
OTHER LIABILITIES
Allowance for decline in investment 74,574,412.09 38,886,726.85 74,574,412.09 38,886,726.85
Hire purchase creditors 41,892,889.40 65,125,467.92 41,892,889.40 65,125,467.92
Others 3,094,229.60 3,283,617.60 3,592,979.60 3,283,617.60
Total Other Liabilities 119,561,531.09 107,295,812.37 120,060,281.09 107,295,812.37
Total Liabilities 6,304,648,658.05 7,782,382,946.23 5,872,365,401.68 6,986,325,175.91
EXCESS OF BOOK VALUE OVER COST
OF INVESTMENT (Note 2) - 53,495,381.37 - 53,495,381.37
MINORITY INTERESTS 71,927,710.23 106,974,572.67 - -
SHAREHOLDERS' EQUITY DEFICIT
Share capital, Baht 10 par value
Authorized shares capital
Preference shares 7,000,000 shares 70,000,000.00 70,000,000.00 70,000,000.00 70,000,000.00
Ordinary shares 68,000,000 shares 680,000,000.00 680,000,000.00 680,000,000.00 680,000,000.00
Issued and fully paid
Preference shares 7,000,000 shares 70,000,000.00 70,000,000.00 70,000,000.00 70,000,000.00
Ordinary shares 23,000,000 shares 230,000,000.00 230,000,000.00 230,000,000.00 230,000,000.00
Paid-in capital
Premium on share capital 486,000,000.00 486,000,000.00 486,000,000.00 486,000,000.00
Surplus on revaluation 929,173,784.53 929,173,784.53 834,565,471.57 834,565,471.57
Retained earnings (Deficit)
Appropriated - legal reserve 56,163,648.79 56,163,648.79 48,565,466.52 48,565,466.52
Unappropriated (1,890,898,995.30) (2,264,928,114.52) (1,883,300,813.03) (2,257,329,932.25)
Loss on non-current marketable securities (Note 4) (255,754,111.22) (257,797,954.92) (254,591,849.30) (256,635,693.00)
Total Shareholders' Equity Deficit (375,315,673.20) (751,388,636.12) (468,761,724.24) (844,834,687.16)
Total Liabilities and Shareholders' Equity Deficit 6,001,260,695.08 7,191,464,264.15 5,403,603,677.44 6,194,985,870.12
_________________________________ _________________________________
Director Director
See notes to financial statements
SINO-THAI ENGINEERING AND CONSTRUCTION PUBLIC COMPANY LIMITED AND SUBSIDIARIES
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
(Amounts in Baht) CONSOLIDATED THE COMPANY
1998 1997 1998 1997
REVENUES (Notes 4 and 5.6)
Revenues from construction and sales 5,063,753,612.07 6,093,920,428.15 4,595,765,884.17 5,474,879,437.84
Other income
Gain on exchange rate 1,024,930,182.00 - 954,865,249.66 -
Excess of book value over cost of investment
written off (Note 15) 53,495,381.37 6,883,074.40 53,495,381.37 6,883,074.40
Others 179,468,977.75 79,406,456.82 167,748,587.58 55,709,707.78
Total Revenues 6,321,648,153.19 6,180,209,959.37 5,771,875,102.78 5,537,472,220.02
EXPENSES (Notes 4 and 5)
Costs of construction and cost of sales 4,716,328,551.94 5,478,104,668.80 4,345,441,181.42 4,942,969,114.33
Selling and administrative expenses 332,270,532.64 611,188,435.39 261,244,430.81 340,644,275.34
Doubtful accounts 344,015,037.18 12,988,990.31 323,248,923.78 8,759,818.14
Company 's share of loss from its investments in
subsidiaries and associated companies
and joint ventures 106,770,878.99 89,254,669.90 5,453,430.78 345,631,777.75
Loss on current marketable securities 97,536,194.37 364,235,480.51 94,536,194.37 364,235,480.51
Directors' remuneration 599,500.00 2,630,000.00 480,000.00 2,440,000.00
Interest expense 415,099,304.92 411,983,523.38 375,948,195.60 379,168,566.04
Total Expenses 6,012,620,000.04 6,970,385,768.29 5,406,352,356.76 6,383,849,032.11
Net income (loss) before minority interests
and income tax 309,028,153.15 (790,175,808.92) 365,522,746.02 (846,376,812.09)
Minority interests in subsidiaries' net loss 8,247,909.54 64,662,665.14 - -
Net income (loss) before income tax and loss on
currency exchange under managed float system 317,276,062.69 (725,513,143.78) 365,522,746.02 (846,376,812.09)
Income tax - - - -
Net income (loss) before loss on currency
exchange under managed float system 317,276,062.69 (725,513,143.78) 365,522,746.02 (846,376,812.09)
Loss on currency exchange under managed
float system (Notes 4 and 16) - (2,094,604,600.59) - (1,917,349,186.86)
Extraordinary items : Gain of debts
restructuring (Note 17) 56,753,056.53 56,391,745.42 8,506,373.20 -
Net income (loss) 374,029,119.22 (2,763,725,998.95) 374,029,119.22 (2,763,725,998.95)
Earnings (Loss) per share (Baht) (Note 4)
Net income (loss) before loss on currency
exchange under managed float system 10.58 (24.18) 12.18 (28.21)
Loss on currency exchange under
managed float system - (69.82) - (63.91)
Extraordinary items : Gain of debts restructuring 1.89 1.88 0.29 -
Net income (loss) 12.47 (92.12) 12.47 (92.12)
See notes to financial statements
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