INANCIAL STATEMENTS QUARTER 3

30, 1999 31, 1998 Domestic accounts receivable 5,863 8,965 Foreign accounts receivable 74,412 73,071 Domestic post-dated cheques 418 1,357 Foreign post-dated cheques 2,985 - 83,678 83,393 Less Allowance for doubtful accounts (3,968) (3,717) Trade accounts and notes receivable-net 79,710 79,676 As at September 30, 1999 and December 31, 1998, the company has overdued accounts receivable 16 and 11 accounts which are aging as follows : In Thousand Baht As at September As at December 30, 1999 31, 1998 Over 3 months to 6 months 7 1,379 Over 6 months to 12 months 503 1,704 Over 12 months 3,730 2,980 Total 4,240 6,063 4. INVENTORIES Inventories consisted of : In Thousand Baht As at September As at December 30, 1999 31, 1998 Finished goods 18,655 15,963 Work in process 18,341 14,461 Raw materials 24,110 22,483 Supplies 9,925 6,609 Goods in transit 1,908 - Total 72,939 59,516 Less Allowance for devalue of inventories (2,963) (5,800) Inventories, net 69,976 53,716 5. INVESTMENTS Investments consisted of : In Thousand Baht As at September As at December Type of Business 30, 1999 31, 1998 Thantawan Marketing Co.,Ltd. Holding company 150 150 First Bangkok City Bank Public Company Limited Banking - - Total General investment in equity securities 150 150 Negotiable certificate of deposit 8,091 8,091 Total Investments 8,241 8,241 At September 30, 1999 and December 31, 1998, the Company had investments in equity security at cost of Baht 96,512.50 issued by the ailing financial institutions that have been supervisory controlled by the Bank of Thailand and ordered to write down capital which the Company has adjusted the related loss for diminution in value of Baht 96,444.25. At September 30, 1999 and December 31, 1998, investment in note receivable - financial institution in the amount of Baht 8,090,592.64 represent note receivable issued by the financial institution which has closed its business as its rehabilitation plan was not approved by the Financial Sector Restructuring Authority on December 8, 1997. In 1998 the Company exchanged the note to be the negotiable certificate of deposit (NCD) issued by Krung Thai Bank according to "Project of Krung Thai Bank in Accepting Exchange of Notes issued by the 42 Finance Companies". The maturity date is on December 12, 2000. Interest is receivable annually at the floating rate as announced by Krung Thai Bank. As at September 30, 1999 and December 31, 1998, the said NCD is pledged as collateral for loans granted from a bank. 6. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of : In Thousand Baht Balance per Additions Deduction Balance per Method of Estimated Book book as at book as at depreciation useful life value Dec 31'98 September (Years) September 30'99 30'99 Land and improvements 16,198 - - 16,198 Straight-line 5-20 12,789 Buildings and improvements 46,715 635 - 47,350 Straight-line 5-20 21,396 Machinery and equipment 177,231 4,694 43 181,882 Straight-line 5-10 73,306 Tools and equipment 10,762 1,446 - 12,208 Straight-line 5 3,408 Office furniture, fixtures and equipment 6,032 196 20 6,208 Straight-line 5 853 Vehicles 14,265 3 - 14,268 Straight-line 5 3,272 Construction in progress 3,456 9,316 - 12,772 12,772 Total 274,659 16,290 63 290,886 127,796 Less Accumulated depreciation (148,519) 14,620 49 (163,090) Property, plant and equipment-net 126,140 127,796 At September 30, 1999 and December 31, 1998, the company had a portion of buildings and land improvements at cost of Baht 8,474,659.75 (book value of Baht 7,377,573.24) and Baht 8,474,659.75 (book value of Baht 7,694,504.34), respectively, which are located on a related company's land without a lease agreement. 7. ADVANCE PAYMENTS FOR ASSETS ACQUISITION The company was attempting to purchase the land and building from the related company. At September 30, 1999 and December 31, 1998 advance payments for assets acquisition represent advance payments according to an agreement to purchase the land and building with the related company on December 29, 1997 at a price of Baht 41 million. The company paid 50% of the price in the amount of Baht 20.5 million on date of signing of the agreement by issuing note receivable in the amount of Baht 20,232,717.81 issued by a financial institution which has closed its business as its rehabilitation plan was not approved by the financial sector restructuring authority on December 8, 1997. On January 22, 1998 and September 30, 1998, the extraordinary meetings of shareholders did not approve to purchase the said land and building. Therefore the company has notified for cancellation of the to buy and to sell agreement and refund the advance payments of Baht 20.5 million as its letter dated February 12, 1998. At present the advance payment has not been refunded and the company is in the process of negotiation with the related company. However there is no evidence to specify the timing for reaching an agreement or receiving a refund of the advance payment. 8. DEPOSIT FOR MACHINE ACQUISITION The Company has entered into a machine acquisition agreement with a local company totalling Baht 61.75 million (exclusive VAT) on March 5, 1999. As at September 30, 1999, the company has paid 30% of the price in the amount of Baht 18.53 million (exclusive VAT), which was shown under "Other Assets" in the balance sheets. Under the term of the agreement, the seller shall deliver some machine which is not less than 30% of total value of machine within June 16, 1999. Consequently, the Company approved to delay the delivery totalling 2 times by the seller will deliver within September 16, 1999 and December 20, 1999, respectively, because the seller informed that it is abnormal after assembly of machine. Therefore the seller can not deliver in the present. The Company must pay 50% of the price in the amount of Baht 30.9 million when delivery completed and 20% of the price in the amount of Baht 12.4 million within 30 days after the date of installation and completed test-run of the machine. While the seller cannot deliver the machine, it should pay back the deposit to the company. 9. SEGMENT INFORMATION Thantawan Industry Public Company Limited manufactures plastic products which divided into three main products : straw products, HD.PE bag products and LD.PE bag products. Products purchased for sales are groups as others. The results of its operations for the three- month and nine-month periods ended September 30, 1999 and 1998 are summarized as follows: For the three-month periods ended September 30, 1999 and 1998 In Thousand Baht HD. PE bag LD.PE bag 1999 1998 Straw products products products Others Total Total Sales-export : 1999 26,054 48,858 83,374 2,586 160,872 : 1998 43,353 56,148 97,444 4,041 200,986 Sales-local : 1999 5,103 2,002 1,365 55 8,525 : 1998 3,986 720 88 77 4,871 Total : 1999 31,157 50,860 84,739 2,641 169,397 : 1998 47,339 56,868 97,532 4,118 205,857 In Thousand Baht HD. PE bag LD.PE bag 1999 1998 Straw products products products Others Total Total Operating profit : 1999 6,420 267 19,773 563 27,023 : 1998 14,503 11,483 37,243 742 63,971 Other income 7,292 3,697 General corporate expense (17,149) (21,667) Interest expense (237) (104) Income tax (5,329) (14,477) Net income 11,600 31,420 For the nine-month periods ended September 30, 1999 and 1998 In Thousand Baht HD. PE bag LD.PE bag 1999 1998 Straw products products products Others Total Total Sales-export : 1999 87,666 125,018 237,455 8,267 458,406 : 1998 146,801 184,387 308,943 10,395 650,526 Sales-local : 1999 19,447 4,224 2,613 226 26,510 : 1998 12,713 3,634 900 230 17,477 Total : 1999 107,113 129,242 240,068 8,493 484,916 : 1998 159,514 188,021 309,843 10,625 668,003 Operating profit : 1999 23,832 8,395 55,665 1,733 89,625 : 1998 53,007 34,887 101,728 2,294 191,916 Other income 11,395 5,188 General corporate expense (47,263) (47,366) Interest expense (306) (1,106) Income tax (15,856) (45,225) Net income 37,595 103,407 As at September 30, 1999 and 1998, property, plant and equipment, net of accumulated deprecation are summarized as follows In Thousand Baht Straw products HD PE bag LD.PE bag 1999 1998 products Products Total Total Assets used by products : 1999 15,800 41,579 56,800 114,179 : 1998 18,262 41,337 57,564 117,163 General assets used 13,617 12,169 Total property, plant and equipment' net 127,796 129,332 10. APPROPRIATIONS OF EARNINGS On April 23, 1999, the Ordinary General Meeting of Shareholders approved the proposed dividend payable from the net income of the year 1998 of Baht 1.75 per share on 8 million shares totaling Baht 14 million and the appropriation legal reserve for the year 1998 in the amount of Baht 2,344,267.61. On April 23, 1998, the Ordinary General Meeting of Shareholders approved the proposed dividend payable from the net income of the year 1997 of Baht 1.25 per share on 8 million shares totaling Baht 10 million and the appropriation of 5% net income for the year 1997 to legal reserve in the amount of Baht 1,631,520.32. 11. ASSETS PLEDGED AS COLLATERAL Fixed deposit in the amount of Baht 1 million and part of land and constructions were pledged as collateral for liabilities and commitments with commercial bank. NCD of financial institution in the amount of Baht 8.1 million was pledged as collateral for loan with Export Import Bank of Thailand. 12. COMMITMENTS The Company has entered into land lease agreement with a related company for a period of 1 year ending December 31, 1999 with monthly rental fee is Baht 273,250. 13. CONTINGENCIES The Company had a protion of building and land improvement which are located on a related company's land without a lease agreement. In 1998 the related company charged the Company for rental fees of Baht 24.1 million for the preceding five year since 1994 to 1998. The company is in the process of negotiation with the related company and the amount of liabilities about rent for the said land is not yet finalized in this moment. The Company did not record this liability about rent for the said land upto the present. 14. YEAR 2000 PROBLEM AND COMPUTER REMEDY PLAN The Year 2000 problem arises because many computerized systems use two digits rather than four to identify the year. Date-sensitive system may recognize the year 2000 as some other dates resulting in errors when information using year 2000 dates is processed. Entities may experience the effects of Year 2000 problem before on or after January 1, 2000 and the effects to significant system failure which could affect an entity's ability to conduct normal business operations. In addition, it is not possible to be certain that all aspects of the year 2000 problem affecting the entity, including those related to the efforts of customers, suppliers or other third parties, will be fully resolved. Since August 1998, the Company commenced its plan to improve its computerized system (hardware and software) in respect of resolving the year 2000 compliance problem. As at September 30, 1999, the plan was completed except for contingency plan which is expected to be completed before December 1999. The costs of remedying the problem of Baht 190,154.50 is recognized to be expenses for the period ended September 30, 1999, and of Baht 254,157 is recognized to be capitalized to assets. Although the Company expects to remedy its year 2000 compliance problems by the time Year 2000, it still remains a risk from other entities with which the Company undertakes business if they are unable to remedy their own problems in time. The effects can not be determined presently. 15. RECLASSIFICATION OF ACCOUNTS Certain accounts in the 1998 interim financial statements were reclassified to conform with the 1999 interim financial statements presentation. 16. OTHERS a) Address and legal status The company has registered to be a limited public company under the Limited Public Company Act with the Ministry of Commerce on December 1, 1994 and its head office is located at 143-144, Moo 8, Soi Kangwal 2, Phetkasem Road, Omyai, Sampran, Nakornpratom ,Thailand. b) Nature the Company's operations The company's operations are produce and export plastic products. c) Name of parent company The parent company of the Company is Sunflower Company Limited. d) Number of employees As at September 30, 1999, the number of employees of the company is approximately 1377 persons. e) Supplemental disclosures of expense information Supplemental disclosures of expense information for the three-month and nine- month periods ended September 30, 1999 and 1998 are as follows: In Thousand Baht For the three-month period For the nine-month period ended September 30, ended September 30, 1999 1998 1999 1998 Depreciation 4,850 5,537 14,620 16,548 Amortization 1,199 1,833 3,391 2,707 Employee benefit costs 38,426 34,674 115,766 100,533 Realized gain on trading securities - unit trust 275 - 275 -