/S

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Trade Accounts and Notes Receivable Trade accounts and notes receivable are shown net of allowance for doubtful accounts which is an estimate of those amounts which may prove to be uncollectible based on historical collection experience and a review of the current status of existing receivables. Inventories Inventories are stated at the lower of cost or net realizable value determined on the average method. Investments Investments in listed securities are stated at the lower of aggregate cost or market. Allowance for reduction in market price due to temporary market fluctuations, if any, is treated as deduction from the shareholders+ equity. Losses from permanent decline in value of investment are reflected in the statement of income. Investments in other securities and long-term note receivable-financial institution are stated at cost. Property, Plant and Equipment Property, plant and equipment are stated at cost net of accumulated depreciation. Depreciation and amortization are computed by the straight-line method at the rates of 5% for buildings and 10-20% for equipment. Deferred Charges Deferred charges represent development expenditures for new products in the amount of Baht 2.42 million and are amortized over a period of 5 years from the date revenues from sales of those products are first earned. In addition, deferred charges include expenditures incurred in obtaining a Stock Exchange of Thailand listing in the amount of Baht 6.42 million which will be amortized over a period of 5 years from the listing date. Revenues Recognition Revenues from sales of goods are recognized at the date of delivery to customers. Accounts in foreign Currencies Accounts in foreign currencies occurred during the period are translated into Baht at the rates of exchange prevailing on the date of the transactions. Assets and liabilities in foreign currencies at the end of the period are translated into Baht at the rates of exchange prevailing at that date. Gain or loss on translation is included in the statement of income. Earnings Per Share Earnings per share is computed by dividing net income for the period by the number of shares outstanding at the end of the period. NOTE 5 - INVESTMENT IN NOTES RECEIVABLE - FINANCE COMPANIES At September 30, 1997 notes recievable - finance companies in the amount of Baht 27.5 million represent promissory notes of two finance companies which cease the operations according to the announcement of the Ministry of Finance dated August 5, 1997. NOTE 6 - OVERDUED ACCOUNTS RECEIVABLE At September 30, 1998, the Company has overdued accounts receivable as follows: (Amounts in Thousand Baht) Over 3 months to 6 months 4,372 Over 6 months to 12 months 305 Over 12 months 6,079 Total 10,756 At September 30, 1998 the Company has provided an allowance for doubtful accounts in the amount of Baht 5.5 million. NOTE 7 - INVESTMENT At September 30, 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 and recapitalize which the Company has provided an allowance for diminution in value of Baht 96,444.25 which reflected in the income statement. NOTE 8 - 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. Product purchased for sales are groups as others. The results of its operations for the nine-month period ended September 30, 1998 are summarized as follows: (Amounts in Thousand Baht) HD.PE bag LD.PE bag Straw Products Products Products Others Total Sales - export 146,801 184,387 308,943 10,395 650,526 Sales - local 12,713 3,634 900 230 17,477 Total 159,514 188,021 309,843 10,625 668,003 Operating profit 53,007 34,887 101,728 2,294 191,916 Other income 5,188 General corporate expense (47,366) Interest expense (1,106) Income tax (45,225) Net income 103,407 As at September 30, 1998 property, plant, and equipment net of accumulated depreciation and amortization are summarized as follows: (Amounts in Thousand Baht) HD. PE bag LD. PE bag Straw Products Products Products Total Assets used by products 18,262 41,337 57,564 117,163 General assets used 12,169 Total property, plant and equipment - net 129,332 NOTE 9 - YEAR 2000 COMPUTER COMPLIANCE (UNREVIEWED) In August 1998, the Company commenced its plan to improve its computerized system in respect of resolving the Year 2000 compliance problem. The plan is expected to be completed within June 1999. The expected costs of remedying the problem is approximately Baht 500,000 and these costs will be recognized in the period in which they occur. Although the Company expects to have remedied the problem by the time year 2000 occurs, the Company+s operations would still remain at risk from other entities with which the Company undertakes business if they are unable to remedy their own problems in time. It may impact on the Companys' operations and the Company cannot expect that the exposure on its operations.