HAAD THIP PUBLIC COMPANY LIMITED INTERIM FINANCIAL STATEMENTS FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998 AND REPORT OF CERTIFIED PUBLIC ACCOUNTANT EXPRESSED IN Thai Baht REPORT OF CERTIFIED PUBLIC ACCOUNTANT To The Board of Directors of Haad Thip Public Company Limited I have made a review of the balance sheets of Haad Thip Public Company Limited as at June 30, 1999 and 1998, and the related statements of income, changes in shareholders' equity, retained earnings and cash flows for the three-month and six- month periods then ended, in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. A review of interim financial statements consists principally of obtaining an understanding of the system for the preparation of interim financial statements, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the interim financial statements taken as a whole. Accordingly, I do not express such an opinion. Based on my review, I am not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with generally accepted accounting principles (in Thailand). PRASIT MUSIKABHANTU C.P.A. (THAILAND) Registration No. 2675 Bangkok August 2, 1999 "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED BALANCE SHEETS JUNE 30, 1999 AND 1998 A S S E T S In Thousand Baht 1999 1998 CURRENT ASSETS Cash on hand and in banks 23,792 18,434 Accounts and notes receivable - trade (Note 2) 53,415 59,943 Less allowance for doubtful accounts ( 1,128) ( 1,128) Accounts and notes receivable - trade - net 52,287 58,815 Inventories - net (Note 3) 48,266 93,589 Other current assets Claim and other receivables - net 15,798 12,940 Prepaid expenses 9,680 8,746 Others 384 164 Total Current Assets 150,207 192,688 ADVANCES AND LOANS TO DIRECTORS AND EMPLOYEES 2,441 1,693 INVESTMENT IN SHARES - Net (Note 4) 3,240 3,502 PROPERTY, PLANT AND EQUIPMENT - At Cost; net of accumulated depreciation (Note 5) 618,693 657,386 OTHER ASSETS - Net Promotion materials 35,935 22,101 Deferred charges and others 6,368 5,305 Total Other Assets 42,303 27,406 TOTAL ASSETS 816,884 882,675 See accompanying Notes to Interim Financial Statements. "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED BALANCE SHEETS JUNE 30, 1999 AND 1998 LIABILITIES AND SHAREHOLDERS' EQUITY In Thousand Baht 1999 1998 CURRENT LIABILITIES Bank overdraft and loans from financial institutions (Note 6) 75,539 64,625 Accounts payable - trade 101,866 115,618 Current portion of long-term loan (Note 7) 1,599 - Other current liabilities Accounts payable - others 14,030 12,990 Accrued bonus 8,571 11,910 Income tax payable 8,074 26,859 Others 14,348 14,573 Total Current Liabilities 224,027 246,575 DEPOSITS RECEIVED FROM CUSTOMERS AND OTHERS 151,559 171,270 LONG-TERM LOAN - Net of Current Portion (Note 7) 6,398 7,997 Total Liabilities 381,984 425,842 SHAREHOLDERS' EQUITY Share capital Authorized - 25,000,000 shares; Baht 10 par value 250,000 250,000 Issued and fully paid up - 16,601,500 shares 166,015 166,015 Premium on share capital 154,728 154,728 Retained earnings Appropriated (Note 8) Legal reserve 14,707 11,529 General reserve 19,000 16,000 Unappropriated 80,450 108,561 Total Shareholders' Equity 434,900 456,833 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 816,884 882,675 See accompanying Notes to Interim Financial Statements. "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF INCOME FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998 In Thousand Baht Three-Month Periods Six-Month Periods Ended June 30 Ended June 30 1999 1998 1999 1998 REVENUES Net sales 311,047 412,739 636,691 827,650 Other income Reversal of unclaimed customers' deposits 4,463 2,398 8,926 4,797 Others 1,595 2,553 3,078 4,405 Total Revenues 317,105 417,690 648,695 836,852 COSTS AND EXPENSES Cost of sales 211,028 272,638 439,153 551,145 Selling and administrative expenses 91,603 102,966 179,956 191,324 Interest expense 1,427 2,066 2,746 4,970 Directors' remuneration - - 200 - Total Costs and Expenses 304,058 377,670 622,055 747,439 INCOME BEFORE INCOME TAX 13,047 40,020 26,640 89,413 INCOME TAX ( 3,726) ( 12,020) ( 8,077) ( 26,869) NET INCOME 9,321 28,000 18,563 62,544 Earnings per Share (Baht) 0.56 1.69 1.12 3.77 See accompanying Notes to Interim Financial Statements. "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998 In Thousand Baht Three-Month Periods Six-Month Periods Ended June 30 Ended June 30 1999 1998 1999 1998 SHARE CAPITAL Common shares Balance, beginning of period 166,015 166,015 166,015 166,015 Increase during the period - - - - Balance, end of period 166,015 166,015 166,015 166,015 PREMIUM ON SHARE CAPITAL Balance, beginning of period 154,728 154,728 154,728 154,728 Increase during the period - - - - Balance, end of period 154,728 154,728 154,728 154,728 RETAINED EARNINGS Appropriated Legal reserve Balance, beginning of period 14,707 11,529 14,707 11,529 Increase during the period - - - - Balance, end of period 14,707 11,529 14,707 11,529 General reserve Balance, beginning of period 19,000 13,000 16,000 13,000 Increase during the period (Note 8) - 3,000 3,000 3,000 Balance, end of period 19,000 16,000 19,000 16,000 Unappropriated Balance, beginning of period 71,129 80,561 81,489 73,919 Increase during the period 9,321 28,000 18,563 62,544 Decrease during the period - - ( 19,602) ( 27,902) Balance, end of period 80,450 108,561 80,450 108,561 TOTAL SHAREHOLDERS' EQUITY 434,900 456,833 434,900 456,833 See accompanying Notes to Interim Financial Statements. "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF RETAINED EARNINGS FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998 In Thousand Baht Three-Month Periods Six-Month Periods Ended June 30 Ended June 30 1999 1998 1999 1998 UNAPPROPRIATED RETAINED EARNINGS: Beginning of period 71,129 80,561 81,489 73,919 Less appropriation of net income for previous year: (Note 8) General reserve - - ( 3,000) ( 3,000) Dividend - - ( 16,602) ( 24,902) Net income for the period 9,321 28,000 18,563 62,544 Total Unappropriated Retained Earnings 80,450 108,561 80,450 108,561 APPROPRIATED RETAINED EARNINGS: Legal reserve 14,707 11,529 14,707 11,529 General reserve 19,000 16,000 19,000 16,000 Total Appropriated Retained Earnings 33,707 27,529 33,707 27,529 TOTAL RETAINED EARNINGS 114,157 136,090 114,157 136,090 See accompanying Notes to Interim Financial Statements. "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998 In Thousand Baht Three-Month Periods Six-Month Periods Ended June 30 Ended June 30 1999 1998 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net income 9,321 28,000 18,563 62,544 Reconciliations of net income to net cash provided by (use in) operating activities: Bad debts and provision for doubtful accounts - - 224 - Reversal of provision for obsolete inventories ( 302) - ( 181) - Depreciation and amortization 19,134 20,209 38,047 40,069 Loss on sales of investment in shares - 348 - 348 Gain on sales of fixed assets ( 97) ( 313) ( 213) ( 313) Promotion materials amortized and book value of containers written off 7,650 5,884 12,727 11,594 Reversal of unclaimed customers' deposits ( 4,463) ( 2,398) ( 8,926) ( 4,796) Decrease in accounts and notes receivable - trade 17,194 10,777 17,977 6,112 Decrease (increase) in inventories 14,174 ( 35,048) 3,227 ( 33,426) Decrease in claim and other receivables 10,970 20,098 9,294 13,571 Decrease (increase) in prepaid expenses 1,191 ( 4,584) ( 3,200) ( 2,472) Decrease (increase) in other current assets 458 109 ( 63) 54 Increase in promotion materials ( 6,781) ( 2,668) (15,852) ( 2,668) Increase in deferred charges and others ( 603) ( 17) ( 164) ( 1,692) Decrease in accounts payable - trade ( 37,039) ( 23,878) (10,267) ( 6,858) Increase (decrease) in accounts payable - others ( 5,979) 120 ( 81) 1,043 Decrease in accrued bonus ( 9,286) ( 6,905) ( 5,704) ( 3,439) Increase (decrease) in income tax payable 2,545 2,300 (19,964) 17,147 Increase (decrease) in other current liabilities 427 ( 3,192) ( 711) 1,120 Increase (decrease) in customers' deposits and others ( 244) 3,594 ( 6,909) 6,752 Net Cash Provided by Operating Activities 18,270 12,436 27,824 104,690 "UNAUDITED" "REVIEWED" - 2 - In Thousand Baht Three-Month Periods Six-Month Periods Ended June 30 Ended June 30 1999 1998 1999 1998 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in property,plant and equipment ( 7,016) ( 5,826) ( 18,776) ( 36,225) Proceeds from sales of fixed assets 115 608 284 608 Net Cash Used in Investing Activities ( 6,901) ( 5,218) ( 18,492) ( 35,617) CASH FLOWS FROM FINANCING ACTIVITIES: Decrease (increase) in advances and loans to directors and employees 1,046 650 ( 670) 168 Increase (decrease) in loans from banks 10,000 ( 15,000) 25,000 ( 40,000) Payment of dividends ( 16,602) ( 24,902) ( 16,602) ( 41,503) Net Cash Used in Financing Activities ( 5,556) ( 39,252) 7,728 ( 81,335) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,813 ( 32,034) 17,060 ( 12,262) Cash and Cash Equivalents,Beginning of Period 17,440 25,843 6,193 6,071 CASH AND CASH EQUIVALENTS, END OF PERIOD 23,253 ( 6,191) 23,253 ( 6,191) (more)