INANCIAL STATEMENTS THE 1ST QUARTER

1.3 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 receivable. 1.4 Inventories Inventories are stated at the lower of average cost or net realizable vaule. 1.5 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. 1.6 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, and Mould is amortized to expense over a period of 2 years. 1.7 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. 1.8 Cash and cash equivalents Cash and cash equivalents consist of cash on hand and at bank and short-term investment in promissory notes which are not due over 3 months deducted by bank overdrafts and cash at bank pledged as collateral. 1.9 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. 2. TRANSACTIONS WITH RELATED PARTIES The Company has significant transactions with related parties. The interim financial statements reflect the effect of these transactions on the basis determined by the companies concerned. Significant transactions occurred between the company and related parties for the three- month periods ended March 31, 1999 and 1998 as follows : In Thousand Baht 1999 1998 Purchase made by the company to related parties 2,589 1,528 Rental and service expenses paid to related parties 870 893 At March 31, 1999 and December 31, 1998 the outstanding balances with related parties are as follows : In Thousand Baht As at As at March 31, 1999 December 31, 1998 Investment in share of Thantawan Marketing Co.,ltd. 150 150 Advance payments for assets acquisition paid to related party Sunflower Enterprise Co.,Ltd. 20,500 20,500 Accounts payable - related parties Flower International Company Limited 1,135 713 Accrued rental expenses 7 6 3. TRADE ACCOUNTS AND NOTES RECEIVABLE Trade accounts and notes receivable consisted of : In Thousand Baht As at As at March 31, 1999 December 31, 1998 Domestic accounts receivable 4,750 8,965 Foreign accounts receivable 75,917 73,071 Post-dated cheques 3,215 1,357 83,882 83,393 Less Allowance for doubtful accounts (4,402) (3,717) Trade accounts and notes receivable-net 79,480 79,676 As at March 31, 1999 and December 31, 1998, the company has overdued accounts receivable 11 accounts which are aging as follows : In Thousand Baht As at As at March 31, 1999 December 31, 1998 Over 3 months to 6 months 1,756 1,379 Over 6 months to 12 months 1,802 1,704 Over 12 months 2,907 2,980 Total 6,465 6,063 4. INVENTORIES Inventories consisted of : In Thousand Baht As at As at March 31, 1999 December 31, 1998 Finished goods 21,300 15,963 Work in process 16,891 14,461 Raw materials 19,769 22,483 Supplies 11,357 6,609 Goods in transit 1,687 - Total 71,004 59,516 Less Allowance for devalue of inventories (5,800) (5,800) Inventories, net 65,204 53,716 5. INVESTMENTS Investments consisted of : , In Thousand Baht As at As at March 31, 1999 December 31, 1998 Type of Business Thantawan Marketing Co.,Ltd. Holding company 150 150 First Bangkok City Bank Public Company Limited Banking 96 96 246 246 Less Allowance for diminution in value of investment (96) (96) 150 150 Negotiable certificate of deposit 8,091 8,091 Investments - net 8,241 8,241 At March 31, 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 provided an allowance for diminution in value of Baht 96,444.25. At March 31, 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 March 31, 1999 and December 31, 1998, the said NCD is pledged as collateral for loans granted from EXIM 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 Mar 31'99 (Years) Mar 31'99 Land and improvements 16,198 - - 16,198 Straight-line 5-20 12,904 Buildings and improvements 46,715 222 - 46,937 Straight-line 5-20 22,386 Machinery and equipment 177,231 1,961 - 179,192 Straight-line 5-10 76,781 Tools and equipment 10,762 370 - 11,132 Straight-line 5 3,084 Office furniture, fixtures and equipment 6,032 16 - 6,048 Straight-line 5 925 Vehicles 14,265 3 - 14,268 Straight-line 5 4,306 Construction in progross 3,456 3,221 - 6,677 Straight-line 6,677 Total 274,659 5,793 - 280,452 127,063 Less Accumulated depreciation (148,519) 4,870 - (153,389) Property, plant and equipment-net 126,140 127,063 At March 31, 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 7,590,021.60) and Baht 8,474,659.75 (book value of Baht 7,694,504.34), respectively, which are located on a related companys 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 March 31, 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 June 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 19, 1999. As at March 31, 1999. The company has paid 30% of the price in the amount of Baht 20.4 million, was shown under"other assets" in the balance sheets. Under the term of the agreement, the seller shall delivery some machine which is not less than 30% of total value of machine within 90 days and shall delivery the outstanding machine within 180 days after the date of agreement. 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 15 days after the date of installation and completed test-run of the machine. While the seller cannot delivery the machine, it should pay back the deposit to the company within June 17, 1999 plus penalty for delay payment. 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 periods ended March 31, 1999 and 1998 are summarized as follows : In Thousand Baht HD. PE bag LD.PE bag 1999 1998 Straw products products products Others Total Total Sales-export : 1999 26,385 45,240 73,443 1,421 146,489 : 1998 45,977 65,544 99,462 2,542 213,525 Sales-local : 1999 8,702 969 710 88 10,469 : 1998 4,503 2,222 453 140 7,318 Total : 1999 35,087 46,209 74,153 1,509 156,958 : 1998 50,480 67,766 99,915 2,682 220,843 Operating profit : 1999 8,580 6,330 20,078 310 35,298 : 1998 18,424 14,050 34,540 817 67,831 Other income 3,951 1,433 General corporate expense (17,644) (23,364) Interest expense (5) (611) Income tax (6,894) (13,599) Net income 14,706 31,690 As at March 31, 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 16,757 44,154 52,228 113,139 : 1998 19,845 43,733 57,717 121,295 General assets used 13,924 13,704 Total property, plant and equipment' net 127,063 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 3 years. The monthly rental fee is Baht 273,250. At March 31, 1999 the Company is committed to pay future rentals amounting to approximately Baht 2.5 million. 13. CONTINGENCIES The Company has building and improvements which are located at the related companys land without a lease agreement. In 1998, The Company was charged in the amount of Baht 24.1 million for the preceding five year rental fee since 1994. The Company has not recorded liability in the financial statements because there is no agreement or other supporting evidence for this transaction. Therefore the Company may have the contingencies for the above rental charges. 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 entitys 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. In August 1998, the Company commenced its plan to improve its computerized system (hardware and software) in respect of resolving the year 2000 compliance problem. The plan is expected to be completed by August 1999. The expected costs of remedying the problem is approximately Baht 400,000 and these costs will be recognized in the period in which they occur. However no expenditure in relation to remedy prefect incurred during the period ended March 31, 1999. Although the Company expects to remedy its year 2000 compliance problems by the time Year 2000 occurs it still remains 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 Company's operations and the Company cannot expect that the exposure on its operations. 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 March 31, 1999, the number of employees of the company is approximately 1,370 persons. e) Supplemental disclosures of expense information Supplemental disclosures of expense information for the three-month periods ended March 31, 1999 and 1998 are as follows: In Thousand Baht 1999 1998 Depreciation 4,870 5,489 Amortization 1,071 435 Employee benefit costs 44,224 39,206