11. FINANCIAL STATUS AND OPERATING RESULT

    1.  FINANCIAL STATEMENTS

Summary of Auditor’s report

  Miss Wanraya Puttasatiean of AMC Co.,Ltd. was appointed as the auditor
  of the Company, its subsidiary and the Company’s consolidated
  financial statements for the year ended December 31, 2001

  Miss Somboon Supasiripinyo of KPMG Phoomchai Audit Ltd. was appointed
  as the auditor of the Company, its subsidiary and the Company’s
  consolidated financial statements for the year ended December 31,2002
  and December 31,2003.

  The summary of auditor’s report for 2001, 2002 and 2003 are as below;

2001. The auditor expressed his opinion in the auditor’s report on a
      qualified basis.

  The company recorded the undelivered sales of Baht 520 million and
  cost of Baht 488 million to a foreign related company in the 2001
  consolidated and company financial statements. As of December 31,2001,
  the company still supervised inventory sold and goods was kept in the
  company’s warehouse. The company has not yet received such merchandise
  repayment. However, the management confirmed that the ownership of
  goods was transferred to the buyer according to the purchase and sale
  agreement dated December 31,2001. The company’s legal counselor gave
  an opinion that the ownership of goods was transferred to the buyer at
  the agreement date despite of undelivered goods.

2002. The auditor expressed his opinion in the auditor’s report on a
      qualified basis.

I did not audit the financial statements of the Company’s foreign
associated companies as at December 31,2001. Therefore I did not audit
the balance brought forward relating to the provision for diminution in
the value of investments in associated companies as disclosed in note
13. This was audited by another auditor.

2003. The auditor do not expressed, an opinion because of the
      uncertainly on the validity of the going concern assumption.

Financial Statement and Ratio Analysis

[TABLE]

[TABLE]

  --------------- ---------------- ------------------ -------------- ---------- -------- ------------ ------------ ---------- ---------- --------- ---------- ---- -------- ------------ ------------ ---------- ----------
  Capetronic                                                                                                                                                                                                     
  International                                                                                                                                                                                                  
  (Thailand)                                                                                                                                                                                                     
  Public Company                                                                                                                                                                                                 
  Limited and                                                                                                                                                                                                    
  subsidiary                                                                                                                                                                                                     

  Income                                                                                                                                                                                                         
  Statement for                                                                                                                                                                                                  
  year                                                                                                                                                                                                           

                                                                                                                                                                                                                 

  (Unit :                                                                                                                                                                                                        
  Million)                                                                                                                                                                                                       

                                                      Consolidated                                                                       Company                                                                 
                                                                                                                                         Only                                                                    

                                                      2001                      2002                  2003                               2001                      2002                  2003                    

                                                      Amount         %          Amount   %            Amount       %                     Amount               %    Amount   %            Amount       %          

  Revenues                                                                                                                                                                                                       

                  Sales of                                           5,429.62   96.88    158.86       242.02       79.57      62.50                5,429.62        96.88    158.86       242.02       79.57      62.50
                  finished goods                                                                                                                                                                                 
                  and raw                                                                                                                                                                                        
                  materials                                                                                                                                                                                      

                  Goods return                                                  0.00     (110.58)     (168.46)                0.00                                 0.00     (110.58)     (168.46)                0.00

                  Revenue from sub                                              0.00                  0.00         23.79      18.69                                0.00                  0.00         23.79      18.69
                  contracts                                                                                                                                                                                      

                  Compensation                                       174.78     3.12     17.36        26.45        23.96      18.82                174.77          3.12     17.36        26.45        23.96      18.82
                  income from                                                                                                                                                                                    
                  inventories                                                                                                                                                                                    

                  Total Revenues                                     5,604.40   100.00   65.64        100.00       127.32     100.00               5,604.39        100.00   65.64        100.00       127.32     100.00

  Expenses from                                                                                                                                                                                                  
  operations                                                                                                                                                                                                     

                  Cost of Sales                                      5,128.39   91.51    164.07       249.95       110.70     86.95                5,128.39        91.51    164.07       249.95       110.70     86.95
                  and sub                                                                                                                                                                                        
                  contracts                                                                                                                                                                                      

                  cost of Goods                                      0.00       0.00     (117.91)     (179.63)                0.00                 0.00            0.00     (117.91)     (179.63)                0.00
                  returned                                                                                                                                                                                       

                  Fixed Overhead                                     176.69     3.15     128.55       195.84       89.89      70.60                177.62          3.17     128.55       195.84       89.89      70.60
                  cost and                                                                                                                                                                                       
                  research &                                                                                                                                                                                     
                  development exp.                                                                                                                                                                               

                  General and                                        250.99     4.48     197.18       300.40       113.04     88.78                250.00          4.46     197.18       300.40       112.88     88.66
                  administrative                                                                                                                                                                                 
                  expenses                                                                                                                                                                                       

                  Directors'                                         0.60       0.01     0.72         1.10         0.72       0.57                 0.60            0.01     0.72         1.10         0.72       0.57
                  remuneration                                                                                                                                                                                   

                  Expenses before                                    5,556.67   99.15    372.61       567.66       314.35     246.90               5,556.61        99.15    372.61       567.66       314.19     246.77
                  Interest                                                                                                                                                                                       
                  Expenses                                                                                                                                                                                       

                  Loss before                                        47.73      0.85     (306.97)     (467.66)     (187.03)   (146.90)             47.78           0.85     (306.97)     (467.66)     (186.87)   (146.77)
                  Interest                                                                                                                                                                                       
                  Expenses                                                                                                                                                                                       

                  Interest                                           0.00       0.00     (82.23)      (125.27)                0.00                 0.00            0.00     (82.23)      (125.27)                0.00
                  Expenses                                                                                                                                                                                       

                  Loss after                                         47.73      0.85     (389.20)     (592.93)     (187.03)   (146.90)             47.78           0.85     (389.20)     (592.93)     (186.87)   (146.77)
                  Interest                                                                                                                                                                                       
                  Expenses                                                                                                                                                                                       

                  Share of Loss                                      (89.65)    (1.60)   2,017.71     3,073.90                0.00                 (89.70)         (1.60)   2,017.71     3,073.90                0.00
                  from subsidiary                                                                                                                                                                                
                  and associated                                                                                                                                                                                 

                  Extraordinary                                                 0.00     (2,398.22)   (3,653.60)   26.46      20.78                                0.00     (2,398.22)   (3,653.60)   26.46      20.78
                  Items                                                                                                                                                                                          

                  Net Loss                                           (41.92)    (0.75)   (769.71)     (1,172.62)   (160.57)   (126.12)             (41.92)         (0.75)   (769.71)     (1,172.62)   (160.41)   (125.99)

                                                                                                                                                                                                                 

                  Basic Loss Per                                     (0.04)              (0.55)                    (0.11)                          (0.04)                   (0.55)                    (0.11)     
                  Share                                                                                                                                                                                          

                  Weighted average                                   1,188.78            1,400.94                  1,400.94                        1,188.78                 1,400.94                  1,400.94   
                  number of                                                                                                                                                                                      
                  ordinary shares                                                                                                                                                                                
                  (million)                                                                                                                                                                                      
  --------------- ---------------- ------------------ -------------- ---------- -------- ------------ ------------ ---------- ---------- --------- ---------- ---- -------- ------------ ------------ ---------- ----------

[TABLE]

[TABLE]

  --------------- --------------- ---------------------- ------ ------------- --------- ------------ --------- --------- --------- ------------ ---------
  Capetronic                                                                                                                                    
  International                                                                                                                                 
  (Thailand)                                                                                                                                    
  Public Company                                                                                                                                
  Limited                                                                                                                                       

  and its                                                                                                                                       
  subsidiary                                                                                                                                    
  company                                                                                                                                       

  Ratio                                                                                                                                         

  for the year                                                                                                                                  

  Unit : Million                                                                                                                                

                                                                Consolidate                                    Company                          
                                                                                                               Only                             

                                                                2001          2002      2003                   2001      2002      2003         

  Liquidity Ratio                                                                                                                               

                  Current Ratio                                 (Times)       3.03      1.62         0.91                3.03      1.63         0.91

                  Quick Ratio                                   (Times)       2.97      0.73         0.43                2.97      0.73         0.43

                  Cash Flow                                     (Times)       (0.56)    (0.74)       (0.80)              (0.57)    (0.74)       (0.81)
                  Liquidity Ratio                                                                                                               

                  A/R Turnover                                  (Times)       3.58      0.08         5.32                3.58      0.08         5.32
                  (Avg)                                                                                                                         

                  Average                                       (Days)        101       4,500        68                  101       4,500        68
                  Collection                                                                                                                    
                  Period (Avg)                                                                                                                  

                  Inventory                                     (Times)       6.88      3.16         1.23                6.88      3.16         1.23
                  Turnover (Avg)                                                                                                                

                  Inventory                                     (Days)        52        114          293                 52        114          293
                  Turnover Period                                                                                                               
                  (Avg)                                                                                                                         

                  A/P Turnover                                  (Times)       4.02      1.86         8.06                4.02      1.86         8.06
                  (Avg)                                                                                                                         

                  A/P Payment                                   (Days)        90        194          45                  90        194          45
                  Period                                                                                                                        

                  Cash Cycle                                    (Days)        63        4,420        316                 63        4,420        316

  Profitability                                                                                                                                 
  Ratio                                                                                                                                         

                  Gross Margin                                  (%)           5.55      (3.28)       (39.12)             5.55      (3.28)       (39.12)

                  Net Profit                                    (%)           (0.75)    (1,172.62)   (1.26)              (5.32)    (1,172.62)   (1.26)

                  Return to                                     (%)           (88.03)   (107.54)     (59.56)             (88.03)   (107.54)     (59.50)
                  Shareholders'                                                                                                                 
                  Equity                                                                                                                        

  Efficiency                                                                                                                                    
  Ratio                                                                                                                                         

                  Return on                                     (%)           (11.46)   (30.82)      (37.70)             (11.46)   (30.82)      (37.67)
                  Assets                                                                                                                        

                  Assets Turnover                               (Times)       2.15      0.03         0.30                2.15      0.03         0.30

  Financial                                                                                                                                     
  Policy Ratio                                                                                                                                  

                  Debt to Equity                                (Times)       6.36      0.37         0.97                6.36      0.37         0.97

                  Interest                                      (Times)       0.00      (3.73)       0.00                0.00      (3.73)       0.00
                  Coverage                                                                                                                      

                  Dividend Payout                               (%)           0.00      0.00         0.00                0.00      0.00         0.00
  --------------- --------------- ---------------------- ------ ------------- --------- ------------ --------- --------- --------- ------------ ---------