"UNAUDITED" "REVIEWED" - 2 - In Thousand Baht Three-Month Period Six-Month Period Ended June 30 Ended June 30 CASH FLOWS FROM INVESTING ACTIVITIES Increase in property, plant and equipment (5,826) (36,225) Proceeds from sales of fixed assets 608 608 Net Cash Used in Investing Activities (5,218) (35,617) CASH FLOWS FROM FINANCING ACTIVITIES Decrease in advances and loans to directors and employees 650 168 Decrease in loans from banks (15,000) (40,000) Payment of dividend (24,902) (41,503) Net Cash Used in Financing Activities (39,252) (81,335) NET DECREASE IN CASH AND CASH EQUIVALENTS (32,034) (12,262) Cash and Cash Equivalents, Beginning of Period 25,843 6,071 CASH AND CASH EQUIVALENTS, END OF PERIOD (6,191) (6,191) ADDITIONAL INFORMATION FOR CASH FLOWS : 1.Cash and Cash Equivalents These consisted of: Cash on hand and in banks 18,434 18,434 Bank overdrafts (24,625) (24,625) Net (6,191) (6,191) 2.Cash Paid During the Period for: Interest expense 2,791 6,176 Income tax 9,721 9,721 See accompanying Notes to Interim Financial Statements. HAAD THIP PUBLIC COMPANY LIIMITED NOTES TO INTERIM FINANCIAL STATEMENTS JUNE 30, 1998 AND 1997 1. PREPARATION FOR YEAR 2000 COMPLIANCE ("Unreviewed") The Company commenced to improve the computer system for Year 2000 issue since May 1998. As at June 30, 1998, the Company was studying the effect and planning the improvement. The Company expected that these plans will be completed and implemented in January 1999. The anticiplated cost for said plans is not material. Although, the Company can improve the computer system before the Year 2000, the Company will have risk from other contacted companies which can not solve the problem in time. However, the said effects are expected to be not substantial for the Companys operations. 2. ACCOUNTS AND NOTES RECEIVABLE - TRADE Long-outstanding balance of the accounts and notes receivable at June 30, 1998 was detailed as follows: Amount (In Million Baht) Over 3 months to 6 months 3.0 Over 6 months to 12 months 1.2 Over 12 months 2.2 Total 6.4 As at June 30, 1998, the Company provided allowance for doubtful accounts equal to the estimated losses that may be incurred in the collection of receivables which are based on a review of the current status of the existing receivables amounting to approximately Baht 1.1 million. 3. EARNINGS PER SHARE Earnings per share is determined by dividing the net income by the number of shares outstanding at the end of periods. - 2 - 4. INVESTMENT IN SHARES These consist of: In Thousand Baht 1998 1997 Listed securities 40 40 Less allowance for decline in value ( 38) ( 38) Net 2 2 Other securities 4,640 4,990 Less allowance for decline in value (1,140) (1,142) Net 3,500 3,848 Investment - Net 3,502 3,850 5. RETAINED EARNING APPROPRIATION At the ordinary meeting held on April 30, 1997, the shareholders approved the appropriation of legal reserve at 5% of 1996 net income amounting to Baht 849,668. In addition, as at December 31, 1997, the Management proposed the appropriation of legal reserve at 5% of 1997 net income amounting to Baht 2,942,000, which was subsequently approved by the shareholders at the meeting on April 30, 1998. Under the provisions of the Limited Public Company Act B.E. 2535, the Company is required to appropriate at least 5% of its annual net income after deduction of the deficit brought forward (ifany) as legal reserve until the reserve reaches 10% of authorized share capital. At the Board of Directors meeting held on March 26, 1998, the Board of Directors approved to pay dividends out of earnings during July 1, 1997 to December 31, 1997 totalling approximately Baht 24.9 million (Baht 1.50 per share for 16,601,500 shares) and approved the appropriation of general reserve amounting to Baht 3,000,000. Payment of dividends (including the interim dividends at Baht 1 per share for 16,601,500 shares approved by the Board of Directors during 1997) and the appropriation of general reserve were approved by the shareholders at the ordinary meeting held on April 30, 1998. - 3 - 6. AGREEMENTS As at June 30, 1998, the Company had: a. Agreements with contractors whereby the latter agreed to provide services in the improvement of the Companys land with total contract value of approximately Baht 2 million. The Company had not paid service fees for said contracts. b. Long-term land lease agreement for a period of 30 years which can be extended for another period of 30 years. The Company is committed to pay the rental at Baht 60,000 per annum. c. Long-term lease agreements with three lessors covering vehicles for a period of 36 months. The Company has to pay the rental of approximately Baht 13.3 million per annum. d. Lease agreements for posting advertising billboards, which the Company is committed to pay the rental of approximately Baht 0.5 million per annum. 7. CONTINGENT LIABILITY As at June 30, 1998, the Company was contingently liable for letters of guarantee issued by a local bank in favour of certain Government agencies and State Enterprises totalling approximately Baht 40 million. 8. RECLASSIFICATION OF ACCOUNTS Certain accounts in the 1997 interim financial statements have been reclassified to conform with the 1998 interim financial statements presentation.