"UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1998 In Thousand Baht Three-Month Period Nine-Month Period Ended September 30 Ended September 30 CASH FLOWS FROM OPERATING ACTIVITIES: Net income 349 62,893 Reconciliations of net income to net cash provided by (used in) operating activities: Depreciation and amortization 20,155 60,224 Provision for obsolete inventories 291 291 Loss on sales of investment in shares - 348 Gain on sales of fixed assets ( 75) ( 388) Promotion materials amortized and book value of containers written off 5,134 16,727 Reversal of unclaimed customers deposits ( 2,398) ( 7,194) Decrease in accounts and notes receivable - trade 4,434 10,546 Decrease in inventories 34,506 1,080 (Increase) decrease in claim and other receivables ( 7,254) 6,317 Increase in prepaid expenses ( 367) ( 2,839) Increase in other current assets ( 95) ( 41) Increase in promotion materials ( 3,275) ( 5,942) Increase in deferred charges and others - ( 1,692) Decrease in accounts payable - trade ( 6,157) ( 13,015) (Decrease) increase in accounts payable - others ( 388) 655 Increase in accrued bonus 7,695 4,256 Increase in income tax payable 558 17,705 Increase in other current liabilities 112 1,232 Increase in customers deposits and others 1,251 8,002 Net Cash Provided by Operating Activities 54,476 159,165 "UNAUDITED" "REVIEWED" - 2 - In Thousand Baht Three-Month Period Nine-Month Period Ended September 30 Ended September 30 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in property, plant and equipment ( 23,399) ( 59,624) Proceeds from sa0es of fixed assets 180 788 Net Cash Used in Investing Activities ( 23,219) ( 58,836) CASH FLOWS FROM FINANCING ACTIVITIES: Increase in advances and loans to directors and employees ( 744) ( 576) Decrease in loans from banks ( 5,000) ( 45,000) Payment of dividend ( 24,902) ( 66,404) Net Cash Used in Financing Activities ( 30,646) (111,980) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 611 ( 11,651) Cash and Cash Equivalents, Beginning of Period ( 6,191) 6,071 CASH AND CASH EQUIVALENTS, END OF PERIOD ( 5,580) ( 5,580) ADDITIONAL INFORMATION FOR CASH FLOWS: 1. Cash and Cash Equivalents These consisted of: Cash on hand and in banks 10,253 10,253 Bank overdrafts ( 15,833) ( 15,833) Net ( 5,580) ( 5,580) 2. Cash Paid During the Period for: Interest expense 1,200 7,376 Income tax 7 9,728 See accompanying Notes to Interim Financial Statements. HAAD THIP PUBLIC COMPANY LIMITED NOTES TO INTERIM FINANCIAL STATEMENTS SEPTEMBER 30, 1998 AND 1997 1. PREPARATION FOR YEAR 2000 COMPLIANCE The Company commenced to improve the computer system for Year 2000 issue since May 1998. As at September 30, 1998, the Company was improving and testing the computer system. 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 September 30, 1998 was detailed as follows: Amount (In Million Baht) Over 3 months to 6 months 2.8 Over 6 months to 12 months 2.8 Over 12 months 2.5 Total 8.1 As at September 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 EARNINGS 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 reserveat 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 reserve fund until the reserve reaches 10% of authorizedshare 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 - At the Board of Directors meeting held on April 29,1998, the Board of Directors approved to pay interim dividends out of earnings during January 1, 1998 to June 30, 1998 totalling approximately Baht 24.9 million (Baht 1.50 per share for 16,601,500 shares). 6. AGREEMENTS As at September 30, 1998, the Company had: a. Long - term land lease agreement for a period of 30 years starting from February 23, 1994 which can be extended for another period of 30 years. The Company is committed to pay the rental at Baht 60,000 per annum. b. Long-term lease agreements with three lessors covering vehicles and a long-term lease agreement covering computer for aperiod of 36 months ending on various dates up to August 2001. The Company has to pay the rental totalling approximately Baht 12.9 million per annum. c. Lease agreements for posting advertising billboards for the period ranging from 1-6 years ending on various dates up to January 2001, which the Company is committed to pay the rental totalling approximately Baht 0.6 million per annum. 7. CONTINGENT LIABILITIES As at September 30, 1998, the Company: a. Was contingently liable for letters of guarantee issued by a local bank in favour of certain Government agencies and State Enterprises totalling approximately Baht 68.4 million. b. Was being audited by the Revenue Department for 1996 books of accounts. The untimate outcome of the audit can not presently be determined. However, the management believes that the effects are not substantial for the Company. Accordingly, no provision has been set up in the accounts. - 4 - 8. RECLASSIFICATION OF ACCOUNTS Certain accounts in the 1997 interim financial statements have been reclassified to conform with the 1998 interim financial statements presentation.