NOTE OF FINANCIAL STATEMENT FOR QUARTER 1'2000

DUSIT THANI PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR THE QUARTERS ENDED MARCH 31, 2000 AND 1999 (Unaudited) 1. ASIA-PACIFIC ECONOMIC TURMOIL Thailand and many Asia-Pacific countries continue to experience economic difficulties since 1997. The accompanying consolidated and the Companys financial statements reflect managements current assessment of the possible impact of the economic conditions on the financial position of the Company and its subsidiaries. 2. BASIS FOR PREPARATION OF THE INTERIM FINANCIAL STATEMENTS 2.1 The consolidated and the Companys financial statements for the quarters ended March 31, 2000 and 1999 are prepared by the management of the Company and are unaudited. However, in the opinion of the Company, all adjustments necessary for a fair presentation, have been reflected therein. The consolidated and the Companys financial statements have been prepared in accordance with the Regulation of the Stock Exchange of Thailand (SET) dated November 22, 1999 regarding the preparation and submission of financial statements and reports for the financial position and result of operations of the listed companies (No.1) B.E. 2542 and in accordance with generally accepted accounting principles in Thailand (GAAP). The consolidated and the Companys balance sheet as at December 31, 1999, presented herein, have been derived from the financial statements, of the Company and subsidiaries for the year then ended which have been audited. In addition, the statements of income, changes in shareholders equity, retained earnings and cash flows for the quarter ended March 31, 1999, presented herein for comparison, have also been reviewed. The consolidated and the Companys financial statements for the quarter ended March 31, 1999, cost of sales and services and selling and administrative expenses have been reclassified to conform to the classifications used in the consolidated and the Companys financial statements for the quarter ended March 31, 2000. Certain financial information which is normally included in financial statements prepared in accordance with generally accepted accounting principles, but which is not required for interim reporting purposes, has been omitted. In addition, the aforementioned consolidated and the Companys financial statements should be read in conjunction with the consolidated and the Companys financial statements and notes thereto included in the audited financial statements for the year ended December 31, 1999. /2 - 2 - 2.2 The interim consolidated financial statements include the account balances of the subsidiaries as follows: % of shareholding March 31, December 31, 2000 1999 1999 Dusit Hotels and Resorts Company Limited (formerly Dusit Resort Cha-am Company Limited) 97.33 97.09 97.32 Royal Princess Public Company Limited 79.65 79.65 79.65 Korat Thani Corporation Limited by Royal Princess Public Company Limited 68.00 68.00 68.00 Supsinthanee Company Limited by Royal Princess Public Company Limited 100.00** 60.00 77.46** Philippine Hoteliers, Inc. 85.76 85.76 85.76 Dusit Thani Delaware, Inc. - 100.00* 100.00 Dusit Thani International Company Limited 99.99 99.99* 99.99 * Not subject to a review ** Including preferred shares which have the same rights as the ordinary shares to receive dividends and vote in shareholders meeting. As at March 31, 2000, Dusit Hotels and Resorts Company Limited (formerly Dusit Resort Cha- am Company Limited) held 9,500 ordinary shares of the Company. The acquisition cost was Baht 0.22 million which was presented as investments available for sale in the consolidated balance sheet. Such investment was not deducted from shareholder equity as the amount was immaterial. All material inter-company transactions and balances have been eliminated. The financial statements for the quarter ended March 31, 2000 of Korat Thani Corporation Limited have been reviewed by another auditor of the same firm, whose report thereon stated that she can not provide any assurance on the financial statements due to the material uncertainty on the companys ability to continue as a going concern. In December 1999, the lender began legal proceedings against this company for repayment of debts. As at March 31, 2000, this company had total assets of Baht 213.93 million, liabilities of Baht 535.71 million, capital deficiency of Baht 321.78 million, and net loss of Baht 12.28 million. /3 - 3 - The financial statements for the quarter ended March 31, 2000 of Supsinthanee Company Limited have also been reviewed by another auditor of the same firm whose report thereon stated that nothing come to her attention that causes her to believe that the financial statements are not presented fairly, in all material respects, in accordance with generally accepted accounting principles with an explanatory paragraph regarding the uncertainty on the ability of the company to continue as a going concern. Management already has plans to resolve this problem. During the year 1999, this subsidiary had increased its share capital by issuing preferred shares and has entered into debt restructuring agreement with the creditor. In addition, the subsidiary will revise its marketing plans in order to try to increase operation cash flows. As at March 31, 2000, this company had total assets of Baht 274.94 million, liabilities of Baht 343.42 million, capital deficiency of Baht 68.48 million, and net loss of Baht 36.57 million. If the two subsidiaries are unable to continue as a going concern, they may be required to realize their assets and extinguish their liabilities other than in the normal course of business and at amounts different from those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should these two subsidiaries not continue as a going concern. 2.3 The consolidated financial statements for the quarter ended March 31, 1999 included the financial statements of subsidiaries whose financial statements have not been reviewed. Total revenues of those subsidiaries can be stated as a percentage of consolidated total revenues as follows: % of % of Consolidated Shareholding Total Revenues Dusit Thani Delaware, Inc. 100.00 0.92 Dusit Thani International Company Limited 99.99 0.01 0.93 /4 - 4 - In addition, the consolidated and the Companys financial statements for the quarters ended March 31, 1999 included equity in undistributed net income (loss) of the following subsidiary and associated companies which have not been reviewed and can be stated as a percentage of net income or loss as follows: % of net income % of The Company Only Shareholding Subsidiaries Dusit Thani Delaware, Inc. 100.00 4.93 Dusit Thani International Company Limited 99.99 (0.40) 4.53 Associated Companies DPMN Industries Company Limited (directly and indirectly) 44.91 - Worldclass Rent a Car Co., Ltd. 20.00 - - Total 4.53 2.4 Balance sheet and statement of income of foreign subsidiaries are translated into Baht at the exchange rates prevailing at the balance sheet date and the average exchange rates, respectively. The exchange differences on the translation is shown as a deduction of the shareholders equity. 3. CHANGES IN ACCOUNTING POLICIES 3.1 The Company and subsidiaries use the same accounting policies and calculation method in these interim financial statements as compared with the financial statements of 1999. A number of new Accounting Standards were issued and became effective from January 1, 2000. The significant changes arising therefrom affecting the Company and subsidiaries are in respect to presentation of interim financial reporting and related party disclosures. /5 - 5 - 3.2 For the quarter ended March 31, 2000, the Company has changed its accounting procedure for the recognition of the net loss of subsidiaries which excessed the Companys investments in those subsidiaries. For the quarter ended March 31, 2000, the Company has recorded all of its share of loss of subsidiary plus the minority shareholders share of loss to the extent that they do not exceed the subsidiaries debt guaranteed by the Company. For the corresponding quarter of the previous year, the Company recorded the net loss of subsidiaries to the extent of the investment and the subsidiaries debt which is guaranteed by the Company according to the percentage of shareholding. The financial statements for the quarter ended March 31, 1999 have been adjusted to reflect the effect of the changes in accounting procedure retroactively. As a result, basic earnings per share in the consolidated and the Companys financial statements for the quarter ended March 31, 1999 decreased by Baht 0.167 and Baht 0.173, respectively, from the previously reported amount. 4. SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION 4.1 Cash and cash equivalents Baht :000 CONSOLIDATED THE COMPANY ONLY UNAUDITED UNAUDITED FOR THE QUARTER FOR THE QUARTER ENDED MARCH 31, ENDED MARCH 31, 2000 1999 2000 1999 Cash in hand and at banks 193,748 337,345 71,763 75,976 Short-term investments 589,403 288,327 548,225 251,806 Less Deposits with maturity of more than 3 months and cash at banks used as collateral (3,603) (3,447) (2,725) (2,606) 779,548 622,225 617,263 325,176 4.2 Cash paid for interest and income tax were as follows: Baht :000 CONSOLIDATED THE COMPANY ONLY UNAUDITED UNAUDITED FOR THE QUARTER FOR THE QUARTER ENDED MARCH 31, ENDED MARCH 31, 2000 1999 2000 1999 Interest 1,537 11,752 8 6,604 Income tax 3,107 231 2,596 - /6 - 6 - 4.3 For the quarters ended March 31, 2000 and 1999, non cash transactions in the interim financial statements were as follows : 4.3.1 The recording of unrealized loss on translation of the subsidiarys financial statements into Baht which was presented as a deduction in the shareholders equity in the consolidated and the Companys financial statements. 4.3.2 The recording of investments available for sale at fair value and recognizing unrealized gains on such investments in the consolidated and the Companys financial statements which were included in shareholders equity. 4.3.3 In the Companys financial statements for the quarters ended March 31, 2000 and 1999, the recognition of undistributed net loss of subsidiary in excess of the Companys investments and minority interest in the amounts of Baht 103.88 million and Baht 161.06 million, respectively, as the Company will continue to provide financial support to the subsidiary. 4.3.4 In the consolidated financial statements for the quarter ended March 31, 2000, the transfering of accrued interest payable of Baht 76.13 million, other payable of Baht 6.11 million and loan from financial institution of Baht 240.71 million, totalling Baht 322.95 million of Supsinthanee Company Limited to current portion of long-term liabilities of Baht 160.24 million and long-term liabilities of Baht 162.71 million. 4.3.5 In the Companys financial statements for the quarter ended March 31, 2000, the Company has transferred the hotel management service business to one subsidiary.According to the contract, the Company has transferred related assets totalling Baht 3.86 million and liabilities of Baht 1.67 million and the difference between assets and liabilities is recorded as cash received from sale of assets relating to the hotel management service business in the amount of Baht 2.19 million. 5. SHORT-TERM INVESTMENTS As at March 31, 2000 and December 31, 1999, short-term investments in the consolidated financial statements included fixed deposits of Baht 3.60 million and Baht 3.45 million, respectively, which are used as collateral for bank guarantees and employees loans from bank. As at March 31, 2000 and December 31, 1999, short-term investments in the Companys financial statements included fixed deposit of Baht 2.73 million and 2.61 million, respectively, which are used as collateral for bank guarantees and employees loans from bank. /7 - 7 - 6. TRADE ACCOUNTS RECEIVABLE Trade accounts receivable which were past due, are classified by aging as follows: CONSOLIDATED THE COMPANY ONLY Unaudited Unaudited March 31, December 31, March 31, December 31, 2000 1999 2000 1999 Number of accounts receivable - past due 951 1,032 517 606 Baht :000 Amount past due Less than 3 months 148,898 142,908 90,954 91,213 3-4 months 1,785 2,637 1,141 1,028 Over 4 months 19,275 17,170 10,327 9,458 Total 169,958 162,715 102,422 101,699 Allowance for doubtful accounts (20,939) (20,610) (12,846) (12,202) 7. INVESTMENTS AND LOANS Investments and loans consisted of the following : 7.1 Related parties Baht :000 CONSOLIDATED THE COMPANY ONLY Unaudited Unaudited March 31, December 31, March 31, December 31, 2000 1999 2000 1999 Related parties Investments in subsidiary and associated companies (Note 10) 217,742 218,967 922,875 929,367 Add (Lsss) Adjustments in value of investments - - (5,322) 6,645 Total 217,742 218,967 917,553 936,012 /8 - 8 - 7.2 Other investments consisted of the following : Baht :000 CONSOLIDATED THE COMPANY ONLY Unaudited Unaudited March 31, December 31, March 31, December 31, 2000 1999 2000 1999 Available for sale Equity securities Cost 43,964 43,744 5,314 5,314 Add (Less) Adjustments in value of investments (3,326) 9,197 1,996 2,552 Total 40,638 52,941 7,310 7,866 General investments Equity securities 60,470 60,470 21,000 21,000 Less Allowance for diminution in value of securities (52,986) (51,921) (21,000) (21,000) 7,484 8,549 - - Total 48,122 61,490 7,310 7,866 The aforementioned investments are classified according to the Accounting Standard No. 40 Accounting for Investment in Debt Security and Equity Security. 8. LONG-TERM LIABILITIES CONVERTED TO CURRENT LIABILITIES ACCORDING TO CONTRACTS As at March 31, 2000 and December 31, 1999, one subsidiary, Korat Thani Corporation Limited, has not complied with the covenant in the loan agreement and in December 1999, the lender began legal proceeding against the company for repayment of debts. Accordingly, the loan in the amount of Baht 240.00 million was presented as long-term liabilities converted to current liabilities according to contracts. Such loan is collateralized by the mortgage of land and hotel building of the subsidiary and partly guaranteed by Royal Princess Public Company Limited. /9 - 9 - 9. LONG-TERM LOANS As at March 31, 2000, and December 31, 1999, long-term loans consisted of the following: Baht :000 Consolidated Interest March 31, December 31, rate p.a. 2000 1999 Loan from financial institution, accrued interest payable and accrued fee on hedging of exchange rate fuctuation by Supsinthanee Company Limited 321,144 - Accrued interest based on effective interest rate 1,808 - Loan from financial institution Repayment annually to 2000 by Royal Princess Public Company Limited MLR+0.75% 45,000 78,000 367,952 78,000 Less Current portion (205,235) (78,000) 162,717 - Long-term loans by Philippine Hoteliers, Inc. SIBOR+1.60% 75,606 112,835 Total 238,323 112,835 On March 28, 2000, one subsidiary, Supsinthanee Company Limited, entered into a debt restructuring agreement with a financial institution. Significant terms and conditions in such agreement can be summarized as follows: Outstanding debts at the date of the agreement consisted of the following: Baht :000 Principal 240,712 Accrued interest 74,324 Accrued fee on hedging of exchange rate fluctuation 6,108 Total 321,144 The amounts that Royal Princess Public Company Limited has to pay as guarantor of the loan are as follows: Baht :000 Principal 151,338 Accrued interest 5,057 Accrued fee on hedging of exchange rate fluctuation 3,840 Total 160,235 As soon as the total amount of Baht 160.23 million has been paid by Royal Princess Public Company Limited on May 31, 2000, reduction of accrued interest of Baht 37.95 million will be granted by creditor. /10 - 10 - The remaining debts that this subsidiary has to pay consist of the following : 1. Outstanding principal of Baht 89.37 million shall be repaid in 32 quarterly installments of Baht 2.79 million each, from May 31, 2000 to May 31, 2010. 2. Accrued interest and fee on hedging exchange rate fluctuation totalling Baht 33.58 million shall be repaid within a period ending May 31, 2002. Interest rate and payment dates are as follows : 1. Interest on principal of Baht 240.71 million at 8.25% p.a. for a period from March 29, 2000 to May 31, 2000 shall be repaid within a period ending May 31, 2002. 2. Interest on outstanding principal for the period from June 1, 2000 to May 31, 2010 at the rate of MLR p.a. shall be paid in 2 portions as follows: First Portion, payable monthly From June 1, 2000 to November 30, 2000 at 2% p.a. From December 1, 2000 to May 31, 2002 at 4% p.a From June 1, 2002 to May 31, 2010 at MLR p.a. Second portion, the difference between interest which have been paid and interest calculated at MLR p.a. for the period from June 1, 2000 to May 31, 2002 shall be paid over a period ending May 31, 2002. In addition, the debt restructuring agreement also specified certain conditions relating to the transfer of collateral to the public and use of the proceed thereof to repay the outstanding debt, the transfer of collateral to the creditor as a repayment of debt and restriction on dividend payment of this subsidiary. /11 - 11 - 10. TRANSACTIONS BETWEEN RELATED COMPANIES Transactions between related companies were as follows: 10.1 Investment in subsidiary, associated, and related companies March 31, 2000 Baht :000 The Company Only Companys Type of Relationship Issued and % of Cost Equity Consolidated name Business paid-up shareholding Subsidiaries 1.Dusit Hotels and Resorts Condominium Co., Ltd. (formerly Dusit and Resort Cha-am Co., Ltd.) management Subsidiary 225,000 97.33 404,118 0 0 2.Royal Princess Hotel and (more)