FINANCIAL STATEMENTS AND ACCOUNTANTS' REVIEW REPORT BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES THIRD QUARTER ENDED SEPTEMBER 30, 1998 AND 1997 Accountants' Review Report To the Shareholders of Berli Jucker Public Company Limited: We have made a review of the consolidated balance sheets of Berli Jucker Public Company Limited and subsidiaries as at September 30, 1998 and 1997, and the related consolidated statements of income, changes in shareholders' equity, retained earnings and cash flows for the three-month and nine-month periods then ended, and the separate financial statements of Berli Jucker Public Company Limited for the same periods, in accordance with standards established by The Institute of Certified Accountants and Auditors of Thailand. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, 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 financial statements taken as a whole. Accordingly, we do not express such an opinion. We draw attention to Note 1 to the financial statements. The operations of the Company have been affected and will continue to be affected for the foreseeable future by the economic conditions in Thailand and the Asia Pacific Region in general. The ultimate effect that these uncertainties will have on the financial statements for the nine-month period ended September 30, 1998 cannot presently be determined. The reviews of the financial statements of certain consolidated subsidiary and associated companies for the nine-month periods ended September 30, 1998 and 1997 were not complete as at the respective reporting dates. The total assets and revenues of the subsidiaries concerned and the share of profits less losses of subsidiary and associated companies concerned are immaterial to the financial statements. Our review herein, insofar as it is related to the amounts included in respect of these subsidiary and associated companies is based solely upon the representation of management. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. Nirand Lilamethwat Certified Public Accountant Peat Marwick Suthee Limited Bangkok, November 11, 1998 BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) (Amounts in Thousands of Baht) Consolidated Company ASSETS 1998 1997 1998 1997 CURRENT ASSETS Cash on hand and at banks 1,276,373 162,957 1,160,390 48,315 Short-term investments Deposits with financial institutions - 40,529 - 40,529 Accounts receivable 2,942,362 2,976,505 1,741,648 2,041,921 Less: Allowance for doubtful accounts (168,503) (163,190) (144,591) (141,351) Accounts receivable - net (Notes 4, 5 and 6) 2,773,859 2,813,315 1,597,057 1,900,570 Short-term loans and advances to related parties (Note 5) 119,148 189,928 961,203 416,955 Lease receivable from a related party current portion (Notes 4 and 5) - - 36,000 36,000 Inventories (Note 4) 1,712,160 1,817,803 825,258 998,627 Other current assets Deferred income tax (Note 4) 137,356 119,142 131,847 115,606 Others 203,250 240,544 126,742 137,647 Total Current Assets 6,222,146 5,384,218 4,838,497 3,694,249 LEASE RECEIVABLE FROM A RELATED PARTY (Notes 4 and 5) - 40,500 76,500 INVESTMENTS AND LOANS Loans to other companies 2,950 4,750 - - Investments in related parties (Notes 2, 4 and 7) 157,409 118,617 4,391,959 3,251,098 Investments in other companies (Notes 2, 4 and 7) 200,266 164,662 200,216 164,612 PROPERTY, PLANT AND EQUIPMENT - NET (Note 4) 7,263,837 6,339,456 846,412 888,881 OTHER ASSETS Terminated currency swap receivable 455,430 - 455,430 - Property foreclosed - net 33,201 33,036 - - Deferred income tax (Note 4) - - 116,274 42,300 Deferred charges - net 56,733 49,908 2,331 5,281 Others 19,436 29,195 5,107 5,099 Total Assets 14,411,408 12,123,842 10,896,726 8,128,020 See notes to financial statements BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) (Amounts in Thousands of Baht) Consolidated Company LIABILITIES AND SHAREHOLDERS' EQUITY 1998 1997 1998 1997 CURRENT LIABILITIES Bank overdrafts and loans from financial institutions 452,530 509,302 100,742 285,879 Accounts and notes payable 1,354,152 1,295,474 318,676 499,823 Accounts payable - related parties (Note 5) - - 323,663 349,748 Current portion of long-term liabilities 280,705 1,846,932 - 1,389,850 Short-term loans and advances from related parties (Note 5) 11,763 10,536 4,531 11,878 Other current liabilities Accrued expenses 811,719 708,855 378,299 408,158 Others 231,550 248,005 143,062 105,865 Total Current Liabilities 3,142,419 4,619,104 1,268,973 3,051,201 LOANS FROM DIRECTORS AND EMPLOYEES 9,734 9,393 8,018 7,035 LONG-TERM LIABILITIES 2,601,476 1,693,132 1,940,991 1,240,890 OTHER LIABILITIES Long-term lease deferred income (Note 4) 124,408 130,017 124,408 130,017 Deferred income tax - non-current (Note 4) 311,124 472,913 - - Staff retirement benefits (Note 4) 250,008 51,000 145,879 51,000 Others (Note 7) 233,238 67,604 66,526 43,114 Total Liabilities 6,672,407 7,043,163 3,554,795 4,523,257 MINORITY INTERESTS 397,070 1,475,916 - - SHAREHOLDERS' EQUITY Share capital (Note 8) Authorized share capital 158,812,500 ordinary shares in 1998 and 57,750,000 ordinary shares in 1997, Baht 10 par value 1,588,125 577,500 1,588,125 577,500 Issued and fully paid-up share capital 158,812,500 ordinary shares in 1998 and 57,750,000 ordinary shares in 1997 1,588,125 577,500 1,588,125 577,500 Paid-in capital Premium on share capital 3,751,379 733,580 3,751,379 733,580 Donated surplus 36,868 36,868 36,868 36,868 Retained earnings Appropriated Legal reserve 116,872 116,038 57,750 57,750 Reserve for business expansion 87,401 87,401 85,000 85,000 Unappropriated 1,849,504 2,056,262 1,911,027 2,116,951 Loss from translation of foreign currency financial statements (Note 4) (88,218) (2,886) (88,218) (2,886) Total Shareholders' Equity 7,341,931 3,604,763 7,341,931 3,604,763 Total Liabilities and Shareholders' Equity 14,411,408 12,123,842 10,896,726 8,128,020 See notes to financial statements BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) (Amounts in Thousands of Baht Consolidated Company Except Earnings per Share) 1998 1997 1998 1997 REVENUES (Note 5) Sales (Note 4) 2,456,224 2,791,849 1,396,913 1,717,329 Other income Share of profits less losses of subsidiary and associated companies (Notes 2, 4 and 9) 116 3,565 37,200 52,848 Interest income 68,684 11,007 99,950 19,085 Other financing income (Note 10) 76,250 - 76,250 - Others 14,626 17,891 20,754 23,902 Total Revenues 2,615,900 2,824,312 1,631,067 1,813,164 EXPENSES Cost of sales (Note 5) 1,894,219 2,022,044 1,086,460 1,363,782 Selling and administrative expenses 403,788 376,419 274,372 247,665 Interest expense (Note 5) 72,315 97,824 46,616 76,675 (Gain) loss on foreign exchange (Note 4) (3,518) 130,302 6,315 46,251 Directors' remuneration 1,076 219 926 94 Other expenses Currency swap cost 50,119 30,011 47,651 - Loss on disposal of investment 607 - 607 - Total Expenses 2,418,606 2,656,819 1,462,947 1,734,467 Net income before income tax 197,294 167,493 168,120 78,697 Income tax (Note 4) 61,989 58,023 40,733 3,639 Net income before minority interests and extraordinary items 135,305 109,470 127,387 75,058 Less : Minority interests in net income (7,918) (34,412) - - Net income 127,387 75,058 127,387 75,058 Earnings per share (Baht) (Note 4) 0.80 1.30 0.80 1.30 Exceptional item : Foreign exchange (gain) loss (Note 4) Foreign exchange (gain) loss - company 6,315 46,251 6,315 46,251 - related parties (9,833) 84,051 (1,714) 65,284 Foreign exchange (gain) loss before income tax (3,518) 130,302 4,601 111,535 Income tax (2,292) (21,531) (1,895) (13,876) Minority interests 8,516 (11,112) - - Net foreign exchange loss 2,706 97,659 2,706 97,659 See notes to financial statements BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) (Amounts in Thousands of Baht Consolidated Company Except Earnings per Share) 1998 1997 1998 1997 REVENUES (Note 5) Sales (Note 4) 7,903,330 7,892,444 4,444,756 5,064,196 Other income Share of profits less losses of subsidiary and associated companies (Notes 2, 4 and 9) 58,671 2,034 149,019 233,991 Interest income 101,986 83,532 166,874 54,036 Other financing income (Note 10) 158,824 - 158,824 - Others 51,856 47,305 83,034 72,897 Total Revenues 8,274,667 8,025,315 5,002,507 5,425,120 EXPENSES Cost of sales (Note 5) 6,014,656 5,575,054 3,515,985 3,941,158 Selling and administrative expenses 1,175,311 1,292,781 765,080 852,342 Interest expense (Note 5) 267,125 275,304 183,934 213,864 Loss on foreign exchange (Note 4) 155,732 207,699 166,623 119,060 Directors' remuneration 4,726 1,331 4,276 806 Other expenses Currency swap cost 138,468 63,859 127,699 - Provision against diminution in value of assets 17,000 - - - Loss (gain)on disposal of investment 607 (68) 607 (68) Total Expenses 7,773,625 7,415,960 4,764,204 5,127,162 Net income before income tax 501,042 609,355 238,303 297,958 Income tax (Note 4) 106,752 164,978 20,183 (12,439) Net income before minority interests and extraordinary items 394,290 444,377 218,120 310,397 Less : Minority interests in net income (83,587) (133,980) - - Net income before extraordinary items 310,703 310,397 218,120 310,397 Extraordinary items: Provision for loss on suspense of subsidiary business segment (net of income tax of Baht 39.7 million) (Note 11) (92,583) - - - Net income 218,120 310,397 218,120 310,397 Earnings per share (Baht) (Note 4) Net income before extraordinary items 3.40 5.37 2.39 5.37 Extraordinary items (1.01) - - - Net income 2.39 5.37 2.39 5.37 Exceptional item : Foreign exchange loss (Note 4) Foreign exchange (gain) loss - company 166,623 119,060 166,623 119,060 - related parties (10,891) 88,639 (7,901) 45,400 Foreign exchange loss before income tax 155,732 207,699 158,722 164,460 Income tax (59,194) (59,285) (49,987) (35,718) Minority interests 12,197 (19,672) - - Net foreign exchange loss 108,735 128,742 108,735 128,742 See notes to financial statements (More)