INTERNATIONAL COAL BUSINESS

The Company has invested in three joint venture coal mining projects in Indonesia, of which coals are imported for distribution to domestic customers and exported to other countries especially to the Asia region market, such as India, Japan, South Korea, Taiwan and Hong Kong, etc. Lanna (Singapore) Pte. Ltd. (LS), a subsidiary company registered in Singapore with Lanna Resources Public Co., Ltd. holding shares at 100 percent of the paid-up capital, is a holding company for investment in the coal and infrastructure businesses, having invested in three joint venture coal mining projects in Indonesia. The Company is currently under business and investment re-structuring for tax benefit purposes, having transferred each of its 55 percent shareholding in PT. Lanna Harita Indonesia and PT. Citra Harita Mineral that invested in the Coal Mining Project No. 1 and No. 2 in Indonesia, respectively, from Lanna (Singapore) Pte. Ltd. to Lanna Resources Public Co., Ltd. Accordingly, the Company has held shares directly in both subsidiary companies since 2007. Lanna Resources Public Co., Ltd. will also directly hold 65 percent of the paid-up capital in PT. Singlurus Pratama, a subsidiary company which has invested in the Coal Mining Project No. 3 in Indonesia. The sales and transfer of shares in PT. Singlurus Pratama from Lanna (Singapore) Pte. Ltd. to Lanna Resources Public Co., Ltd. is under approval process and it is expected that the investment restructuring process will be completed within year 2009. PT. Lanna Harita Indonesia (LHI), a subsidiary company registered in Indonesia with Lanna Resource Public Co., Ltd. holding shares at 55 percent of the paid-up capital, operates the Coal Mining Project No. 1 by having received the coal mining concession (Coal Contract of Work) from the Indonesian Government for coal mining operation in Samarinda district, Kutai Regency, in East Kalimantan. The concession period for coal production and distribution lasts 30 years (from 2001 to 2301), having remaining mineable reserves estimated at 15 million tons, with a production capacity of 1,500,000 tons per year. PT. Citra Harita Mineral, a subsidiary company registered in Indonesia with Lanna Resources Public Co., Ltd. holding shares at 55 percent of the paid-up capital, operates Coal Mining Project No. 2, conducting coal mining operation through cooperation agreement within the KP License concession areas of PT. Cahaya Tiara (formerly CV. Cahaya Tiara) in Samarinda district in East Kalimantan. Mining operation at this coal mine has stopped since the middle of year 2008. PT. Singlurus Pratama, a subsidiary company registered in Indonesia, with Lanna (Singapore) Pte. Ltd. holding shares at 65 percent of the paid-up capital, operates Coal Mining Project No. 3, conducting coal mining operation at Kutai Regency, East Kalimantan, having received the coal mining concession (Coal Contract of Work) from the Indonesian Government for coal production and distribution for a period of 30 years. The mineable coal reserves are estimated to be more than 25 million tons with coal production and sales commencing in the beginning of year 2009. Initial coal production capacity for the first year will be approximately 1,000,000 tons and increase to 2,000,000 tons for the following years. PT Lanna Mining Services, a subsidiary company registered in Indonesia with Lanna Resources Public Co., Ltd. holding shares directly and indirectly at 100 percent of the paid-up capital, is in a coal trading business and also assigned to develop the Coal Mining Project No. 3 above.