We have audited the statements of financial position as at December 31, 1998 and 1997, and the related statements of revenues and expenditure for the years then ended of Rama IX Art Museum Foundation. These financial statements are the responsibility of the Foundation's management as to their correctness and completeness of the presentation. Our responsibility is to express and opinion on these financial statements based on our audits.

Except as discussed in the third and fourth paragraphs, we conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material 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 statrment presentation. We believe that our audits provide a reasonable basis for our opinion.

We were not present at the physical stock taking of supplies as at December 31, 1998 and 1997, of which the value was Baht 3.40 million and Baht 3.55 million, repectively because we were not appointed auditors of the Foundation at that time. We were unable to satisfy ourselves as of the quantities of the supplies by means of other auditing procedures because the volume of accounting transactions would not be commensurate with the expense to reconcile the related transactions.

As discussed in Note 3.4 to the financial statements, value of donated art works estimated by the individual artists as at December 31, 1998 and 1997 was Baht 13.59 million and Baht 13.77 million, respectively. We were unable to satisfy ourselves as of the value of the art works by means of other auditing procedure because there was no market price for comparison.

In our opinion, except for the effect of adjustment on the financial statements for 1998 and 1997, which might have been determined to be necessary had we been able to audit the quantities of supplied as dicusses in the third paragraph and the value of donated art works as dicussed in the fourth paragraph, the aforementioned financial statements present fairly, in all material respects, the financial position of Rama IX Art Museum Foundation as at December 31, 1998 and 1997, and the income and expenditure for the years then ended in conformity with generally accepted accounting principles

Bangkok
May 17, 1999

Toemsakdi Krishnamra
Certified Public Accountant
DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.

1. To honor His Majesty King Bhumibol Adulyadej, the Supreme Artist, in commemoration of the 50th anniversary of HM the King's accession to the throne.
2. To be responsible for the building and management of a modern art museum to be named in the honor of HM the King.
3. To manage the permanent collection and endowments of the museum.
4. To promote and support the development of the Thai contemporary art.
5. To organize a quality art publishing house concentrating in conventional publications and electronic educational aids for further understanding of Thai contemporary arts and to support and develop artistical knowledge.
6. To stimulate more grants and fundings for young artists in order to encourage the creation of quality works.
7. To encourage local and international artistic and cultural collaborations.

2. Funds Raising Method

The Foundation was established with the initial funds of 200,000 baht, donated by Khun Tarrin Nimmanahaeminda. The Foundation may raise additional funds through

1. Government or state enterprise support
2. Foreign / domestic organizations or individual support
3. Endowments or other transaction without any legal obligation
4. Interest and dividend on assets of the Foundation
5. Donated funds for the uses of facilities of the Foundation or services provided by the Foundation
6. Proceeds from other activities arranged under the approval of the Board of Directors

3. Major Accounting Policy

1. Revenues and expenses recognition

Revenues and expenses are recognized on an accrual basis, except for revenues from donation, which are recognized on cash basis.

2. Materials and objects in inventory are shown at average cost.

3. Equipment is shown at cost

The Foundation uses a straight-line method to calculate depreciation of equipment.

Exhibition equipment 5 years
Office equipment 5 years

For office equipment, which was transferred from the Golden Jubilee Art Celebration, calculation is based on its remaining life.

4. Art Collection

Art works are transferred from the Golden Jubilee Art Celebration (Note 7) as well as are donated by artists. Value of donated art works is estimated by artists.

4. Materials and objects in inventory

Materials and objects in inventory consist of

5. Equipment

Equipment consists of

6. Long-term borrowings

Long-term borrowings consist of

The above mentioned borrowings are provided by the Office of the National Culture Commission to support the production of 200 sets of Art in the Reign of Rama IX Books in the Golden Jubilee Art Celebration. There is no interest charge for the period of one year from March 1, 1997 to February 28, 1998. Failing to meet debt repayment schedule will result in a penalty charge of 15% per annum of the overdue amount.

Such borrowings are under personal guaranty of members of the Board of Directors. Borrower has the rights to call back part or the whole amount of loan before its maturity. Debt repayment must be made within 30 days of receiving notice from borrower.

In 1998, the Foundation did not repay debt on due for 2 million baht.

7. The transfer of assets from the Golden Jubilee Art Celebration

The Board of Directors of the Rama IX Art Museum Foundation had a resolution on December 3, 1996, for the Foundation to accept the transfer of assets from the Golden Jubilee Art Celebration. The transfer was proceeded in 1997 for the following items:

1. 171 objects of donated art works valuing, estimated by artists, to 11,568,498 million baht
2. Rights to exhibit 1,090 objects of arts from the Golden Jubilee Art Exhibition
3. Film slide and rights over 4,000 objects of art from 400 artists
4. 2,700 negative and pictures of the Golden Jubilee Art Celebration

The Foundation cannot estimate the value of transferred items in 2 and 4. The Foundation also received from transfer about 200 units of documents and catalogues.

8. Expenses on the transfer of assets from the Golden Jubilee Art Celebration

The Board of Directors of the Rama IX Art Museum Foundation had a resolution on January 15, 1997, to redeem all expenses of the Golden Jubilee Art Celebration as follows :

9. Computer remedy plan for the year 2000 ("unaudited" and not included in the auditor's report)

Since operation of the Foundation does not significantly depend on computer system, the Foundation is not exposed to Y2K risk.

The Foundation is subjected to risk that other counter parties are not able to handle the Y2K problem in time. However, the Foundation expects that such problem will be solved and the Y2K problem will not significantly impact operation of the Foundation.