11. Clarification and Financial Analysis on Operation Result.

In 2002, the Company’s operation profit accounted for 389.70 Million
Baht which increased from that of 2001 by 354.50 Million Baht or 1,007
%, largely due to the new projects sold with, low and cost purchased
from the financial institutions. Moreover, the Company concentrated on
high profitable items like Baan Lalin and Lalin Greenville projects, for
example.

As of December 31, 2002, total company assets was 2,420.50 Million Baht,
higher than that of the 2001 by 1,125.10 Million Baht or 87% largely due
to the increase of on inventories (by 752.80 Million Baht or 31% of
total assets) in accordance with the Company’s policy as far as risk
management and sales strategy are concerned. Total company liabilities
in the same period was 502.50 Million Baht, decreased by 34.60 Million
Baht or 6.5% in comparison with the 2001 largely due to some loan
clearance both short and long terms. The Equity was 1,918.10 Million
Baht increased from 2001 by 1,159.80 Million Baht or 153% mainly due to
cash received from new stocks issued (IPO), 700.00 Million Baht, all of
which contributed to the increased profit (354.50 Million Baht) as
mentioned earlier.

On the financial structure in 2002, the D/E ratio was down to 0.26
versus 0.71 as in 2001, mainly due to the decreased Liabilities but
stronger Equity mainly due to cash realized from new stocks issued to
the public (IPO) end of November 2002. However, the Company has the
policy to maintain the D/E ratio not to exceed 1.0 in order to control
financial risk.

The Equity also was much improved as the Current Asset was 5.40 when
compared with that of 2001 which was 4.02 partly due to the Company
policy to control inventory to meet the promising growth.

Regarding the business operation, the Company’s capability and
efficiency in this regard have been improved significantly. The R.O.E.
was 20.32% versus 4.65% in 2001 while R.O.A. was 16.10% versus 2.72% in
2001. Both improvements were due to the increase of net profit on new
projects sold (since the opening in 2000) with higher in both average
price and profit than those of 2001. Finally, the Company was able to
reduce the operation cost, as sales/administration cost in 2002, was
only 133.85 Million Baht or 6.94% to total revenue, which considered to
be the lowest rate when compared with the overall industry.

Regarding quality of the Assets, both housing inventories and land plots
acquired after the crisis were all in low costs. On the other hand,
these assets are all profitable items that also enable the Company to
maintain its leadership position in the industry.

AUDITOR’S REPORT 

I have audited the balance sheets of LALIN PROPERTY PUBLIC COMPANY
LIMITED as of December 31, 2002 and 2001, the statements of income, the
statements of changes in Shareholders’ equity for the years then ended
and cash flow statements for the year ended on December 31, 2002 of
LALIN PROPERTY PUBLIC COMPANY LIMITED. These financial statements are
the responsibility of the Company’s management as to their correctness
and the completeness of the presentation. My responsibility is to
express an opinion on these financial statements based on my audits.

I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of any significant 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. I believe that
my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial positions of LALIN
PROPERTY PUBLIC COMPANY LIMITED as of December 31, 2002 and 2001, the
results of its operations, changes in shareholders’ equity for the years
then ended and cash flow for the year ended on December 31, 2002, in
conformity with generally accepted accounting principles.

Without any qualified opinion, the attention is drawn as follows :

1. In accordance with the note to the financial statements no 1.1, the
company did not present the cash flow statement for the year ended on
December 31, 2001 due to the change of the accounting policy pursuant to
note no. 4. In addition, the company could not find out the accumulated
result incurred from the change of the account policy to adjust the
financial statements year 2000 so as for the comparative benefit over
the financial statements year 2001 the preparation of the cash flow
statement.

2. In accordance with the note to the financial statements no 4.1 in
2002, the Company has changed its accounting policy regarding the
revenue recognition from the prior revenue recognition in accordance
with the due installment which comply with the basis of the Revenue
Department to the revenue recognition when the construction completes
pursuant to the contract and the ownership has been transferred to the
purchasers which comply with the generally accepted accounting
principle. In respect of such accounting policy change, the Company has
to retroactive adjust the previous financial statements which were
compared as if the Company had always recognized revenues in accordance
with the new accounting policy. As a result, data for the year 2001
taken for comparison is data prepared in accordance with the new
accounting policy. The accumulated result from the change of the
accounting policy from the past to the present year which has to be
adjusted to the beginning of retained earnings (deficit) of year 2002
constitutes Baht (36.67) millions and incurred net profit for the year
ended on December 31, 2002 additionally by the same amount. Moreover,
the accumulated result from the past to the beginning year 2001 which
has to adjust to the beginning retained earning (deficit) for the year
2001 constitutes Baht (22.49) millions.

3. In accordance with the note to the financial statements no. 4.2 in
2002, the Company has changed the accounting policy relating to the
recognition of the cost of central utility from the prior which
accounted as part of property, plant and equipment and gradually
recognized as cost of goods sold and depreciated that is complied with
the basis of the Revenue Department to the recognition of the cost of
central utility as part of the cost of inventory and amortized as cost
of goods sold in proportion to the selling area that’s complied with the
generally accepted accounting principle. Having changed such accounting
policy, the Company has to retroactively adjusted the prior period
financial statements taken for comparison as it the Company has always
realized the cost of central utility in accordance with the new
accounting policy. As a result, data for the year 2001 which taken for
comparison is the data prepared in accordance with the new accounting
policy. The accumulated result from the change of the accounting policy
form the past until the beginning retained earnings (deficit) of year
2002 aggregated to Baht (17.81) millions. Moreover, the accumulated
result from the past until the beginning year 2001 required the
adjustment of the beginning retained earnings (deficit) of year 2001
amounted to Baht 5.68 millions.