FINANCIAL STATEMENTS AND ACCOUNTANTS' REVIEW REPORT BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES THIRD QUARTER ENDED SEPTEMBER 30, 1999 AND 1998 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, 1999 and 1998, 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. We have also made a review of the Company only financial statements of Berli Jucker Public Company Limited for the same periods. Our reviews were made 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. 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 in Thailand. We draw attention to Note 1 to the financial statements. The operations of Berli Jucker Public Company Limited and subsidiaries since 1997 have been affected and may continue to be influenced 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 cannot presently be determined. Nirand Lilamethwat Certified Public Accountant Registration Number 2316 KPMG Audit (Thailand) Limited Bangkok, November 9, 1999 BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in Thousands of Baht) Consolidated Company ASSETS 1999 1998 1999 1998 CURRENT ASSETS Cash on hand and at banks 1,707,455 1,276,373 795,321 1,160,390 Short-term investments Deposits with financial institutions 300,000 - 300,000 - Others 20 - 20 - Accounts receivable 3,110,965 2,942,362 1,477,271 1,741,648 Less: Allowance for doubtful accounts (164,610) (168,503) (132,613) (144,591) Accounts receivable - net (Notes 4, 5 and 6) 2,946,355 2,773,859 1,344,658 1,597,057 Short-term loans and advances to related parties - net (Note 5) 161,256 119,148 822,588 961,203 Lease receivable from a related party current portion (Notes 4 and 5) - - 36,000 36,000 Inventories (Note 4) 1,538,994 1,712,160 419,632 825,258 Other current assets Deferred income tax (Note 4) 134,222 137,356 116,633 131,847 Accrued income 30,978 - 97,450 - Others 215,733 203,250 113,690 126,742 Total Current Assets 7,035,013 6,222,146 4,045,992 4,838,497 LEASE RECEIVABLE FROM A RELATED PARTY (Notes 4 and 5) - - 4,500 40,500 INVESTMENTS AND LOANS Loans to other companies - 2,950 - - Investments in related parties (Notes 2, 4 and 7) 72,112 157,409 5,635,308 4,391,959 Investments in other companies (Notes 2, 4 and 7) 220,916 200,266 220,866 200,216 PROPERTY, PLANT AND EQUIPMENT - NET (Note 4) 7,187,240 7,263,837 793,323 846,412 OTHER ASSETS Terminated currency swap receivable 455,430 455,430 455,430 455,430 Deferred income tax (Note 4) - - 127,792 116,274 Others 115,143 109,370 6,688 7,438 Total Assets 15,085,854 14,411,408 11,289,899 10,896,726 See notes to financial statements BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in Thousands of Baht) Consolidated Company LIABILITIES AND SHAREHOLDERS' EQUITY 1999 1998 1999 1998 CURRENT LIABILITIES Bank overdrafts and loans from financial institutions 473,196 452,530 15,438 100,742 Accounts and notes payable 1,616,691 1,354,152 459,616 318,676 Accounts payable - related parties (Note 5) - - 225,914 323,663 Current portion of long-term liabilities 78,379 280,705 - - Short-term loans and advances from related parties (Note 5) 17,266 11,763 22,269 4,531 Other current liabilities Accrued expenses 770,458 811,719 283,887 378,299 Others 246,516 231,550 107,199 143,062 Total Current Liabilities 3,202,506 3,142,419 1,114,323 1,268,973 LOANS FROM DIRECTORS AND EMPLOYEES 5,798 9,734 5,779 8,018 LONG-TERM LIABILITIES 2,629,611 2,601,476 1,941,134 1,940,991 OTHER LIABILITIES Long-term lease deferred income (Note 4) 118,799 124,408 118,799 124,408 Deferred income tax (Note 4) 294,107 311,124 - - Staff retirement benefits (Note 4) 222,614 250,008 97,185 145,879 Others (Note 7) 277,076 233,238 114,511 66,526 Total Liabilities 6,750,511 6,672,407 3,391,731 3,554,795 MINORITY INTERESTS 437,175 397,070 - - SHAREHOLDERS' EQUITY Share capital (Note 8) Authorized share capital 158,812,500 ordinary shares, Baht 10 par value 1,588,125 1,588,125 1,588,125 1,588,125 Issued and fully paid-up share capital 158,812,500 ordinary shares 1,588,125 1,588,125 1,588,125 1,588,125 Paid-in capital Premium on share capital 3,751,380 3,751,380 3,751,380 3,751,380 Donated surplus 36,868 36,868 36,868 36,868 Retained earnings Appropriated Legal reserve 218,456 116,872 158,813 57,750 Reserve for business expansion 87,401 87,401 85,000 85,000 Unappropriated 2,284,524 1,849,504 2,346,568 1,911,027 Loss from translation of foreign currency financial statements (Note 4) (68,586) (88,219) (68,586) (88,219) Total Shareholders' Equity 7,898,168 7,341,931 7,898,168 7,341,931 Total Liabilities and Shareholders' Equity 15,085,854 14,411,408 11,289,899 10,896,726 See notes to financial statements BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in Thousands of Baht Consolidated Company Except Basic Earnings per Share) 1999 1998 1999 1998 REVENUES (Notes 4 and 5) Sales 2,755,650 2,456,224 1,265,659 1,396,913 Other income Share of profits less losses of subsidiary and associated companies (Notes 2 and 9) 2,240 116 135,346 37,200 Interest income 18,958 68,684 32,408 99,950 Others 20,838 14,626 52,118 20,754 Total Revenues 2,797,686 2,539,650 1,485,531 1,554,817 EXPENSES Cost of sales (Note 5) 1,953,986 1,894,219 999,491 1,086,460 Selling and administrative expenses 452,123 403,788 200,542 274,372 Interest expense (Note 5) 61,527 72,315 37,783 46,616 Loss (gain) on foreign exchange (Note 4) 26,156 (3,518) 15,416 6,315 Directors' remuneration 977 1,076 877 926 Other expenses Currency swap cost 32,955 50,119 32,955 47,651 (Gain) loss on disposal of investments (1,059) 607 (1,059) 607 Other financing expenses (income) (Note 10) 39,572 (76,250) 39,572 (76,250) Total Expenses 2,566,237 2,342,356 1,325,577 1,386,697 Net income before income tax 231,449 197,294 159,954 168,120 Income tax (Note 4) 64,598 61,989 (3,511) 40,733 Net income before minority interests 166,851 135,305 163,465 127,387 Minority interests in net income (3,386) (7,918) - - Net income 163,465 127,387 163,465 127,387 Basic earnings per share (Baht) (Note 4) 1.03 0.80 1.03 0.80 Exceptional item : Foreign exchange loss (gain) (Note 4) Foreign exchange loss (gain) - company 15,416 6,315 15,416 6,315 - related parties 10,740 (9,833) 6,173 (1,714) Foreign exchange loss (gain) before income tax 26,156 (3,518) 21,589 4,601 Income tax (6,816) (2,292) (4,625) (1,895) Minority interests (2,376) 8,516 - - Net foreign exchange loss 16,964 2,706 16,964 2,706 See notes to financial statements BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in Thousands of Baht Consolidated Company Except Basic Earnings per Share) 1999 1998 1999 1998 REVENUES (Notes 4 and 5) Sales 8,231,315 7,903,330 4,094,634 4,444,756 Other income Share of profits less losses of subsidiary and associated companies (Notes 2 and 9) 9,291 58,671 373,656 149,019 Interest income 67,693 101,986 109,854 166,874 Others 45,113 51,856 152,458 83,034 Total Revenues 8,353,412 8,115,843 4,730,602 4,843,683 EXPENSES Cost of sales (Note 5) 5,907,387 6,014,656 3,208,324 3,515,985 Selling and administrative expenses 1,350,983 1,175,311 718,889 765,080 Interest expense (Note 5) 194,977 267,125 118,808 183,934 Loss on foreign exchange (Note 4) 26,909 155,732 11,741 166,623 Directors' remuneration 2,764 4,726 2,364 4,276 Other expenses Currency swap cost 98,891 138,468 97,791 127,699 Loss on disposal of investments 2,533 607 2,533 607 Loss on diminution in value of assets - 17,000 - - Other financing expenses (income) (Note 10) 24,354 (158,824) 24,354 (158,824) Total Expenses 7,608,798 7,614,801 4,184,804 4,605,380 Net income before income tax 744,614 501,042 545,798 238,303 Income tax (Note 4) 218,589 106,752 22,858 20,183 Net income before minority interests and extraordinary items 526,025 394,290 522,940 218,120 Minority interests in net income (3,085) (83,587) - - Net income before extraordinary items 522,940 310,703 522,940 218,120 Extraordinary items: Provision for loss on suspension of subsidiary business segment (net of income tax of Baht 39.7 million) (Note 11) - (92,583) - - Net income 522,940 218,120 522,940 218,120 Basic earnings per share (Baht) (Note 4) Net income before extraordinary items 3.29 3.40 3.29 2.39 Extraordinary items - (1.01) - Net income 3.29 2.39 3.29 2.39 Exceptional item : Foreign exchange loss (Note 4) Foreign exchange loss (gain) - company 11,741 166,623 11,741 166,623 - related parties 15,168 (10,891) 8,037 (7,901) Foreign exchange loss before income tax 26,909 155,732 19,778 158,722 Income tax (6,378) (59,194) (3,522) (49,987) Minority interests (4,275) 12,197 - - Net foreign exchange loss 16,256 108,735 16,256 108,735 See notes to financial statements BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in Thousands of Baht) Consolidated Company 1999 1998 1999 1998 Share capital Ordinary shares Beginning balance 1,588,125 577,500 1,588,125 577,500 Increase in this period - 1,010,625 - 1,010,625 Ending balance 1,588,125 1,588,125 1,588,125 1,588,125 Paid-in capital Premium on share capital Beginning balance 3,751,380 733,580 3,751,380 733,580 Increase in this period - 3,017,800 - 3,017,800 Ending balance 3,751,380 3,751,380 3,751,380 3,751,380 Donated surplus Beginning balance 36,868 36,868 36,868 36,868 Increase in this period - - - - Ending balance 36,868 36,868 36,868 36,868 Retained earnings Appropriated Legal reserve Beginning balance 218,456 116,872 158,813 57,750 Increase in this period - - - - Ending balance 218,456 116,872 158,813 57,750 Reserve for business expansion Beginning balance 87,401 87,401 85,000 85,000 Increase in this period - - - - Ending balance 87,401 87,401 85,000 85,000 Unappropriated Beginning balance 2,200,499 2,107,243 2,262,543 2,168,766 Increase in this period 163,465 127,387 163,465 127,387 Decrease in this period (79,440) (385,126) (79,440) (385,126) Ending balance 2,284,524 1,849,504 2,346,568 1,911,027 Gain (loss) from translation of foreign currency financial statements Beginning balance (106,969) 2,642 (106,969) 2,642 Decrease in this period 38,383 (90,861) 38,383 (90,861) Ending balance (68,586) (88,219) (68,586) (88,219) Total Shareholders' Equity 7,898,168 7,341,931 7,898,168 7,341,931 See notes to financial statements BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in Thousands of Baht) Consolidated Company 1999 1998 1999 1998 Share capital Ordinary shares Beginning balance 1,588,125 577,500 1,588,125 577,500 Increase in this period - 1,010,625 - 1,010,625 Ending balance 1,588,125 1,588,125 1,588,125 1,588,125 Paid-in capital Premium on share capital Beginning balance 3,751,380 733,580 3,751,380 733,580 Increase in this period - 3,017,800 - 3,017,800 Ending balance 3,751,380 3,751,380 3,751,380 3,751,380 Donated surplus Beginning balance 36,868 36,868 36,868 36,868 Increase in this period - - - - Ending balance 36,868 36,868 36,868 36,868 Retained earnings Appropriated Legal reserve Beginning balance 116,873 116,038 57,750 57,750 Increase in this period 101,583 834 101,063 - Ending balance 218,456 116,872 158,813 57,750 Reserve for business expansion Beginning balance 87,401 87,401 85,000 85,000 Increase in this period - - - - Ending balance 87,401 87,401 85,000 85,000 Unappropriated Beginning balance 2,036,926 2,021,021 2,098,450 2,081,710 Increase in this period 522,940 218,120 522,940 218,120 Decrease in this period (275,342) (389,637) (274,822) (388,803) Ending balance 2,284,524 1,849,504 2,346,568 1,911,027 Loss from translation of foreign currency financial statements Beginning balance (106,775) (6,325) (106,775) (6,325) Increase in this period - (81,894) - (81,894) Decrease in this period 38,189 - 38,189 - Ending balance (68,586) (88,219) (68,586) (88,219) Total Shareholders' Equity 7,898,168 7,341,931 7,898,168 7,341,931 See notes to financial statements BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF RETAINED EARNINGS FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in Thousands of Baht) Consolidated Company 1999 1998 1999 1998 Unappropriated retained earnings Beginning balance 2,200,499 2,107,243 2,262,543 2,168,766 Less Cost of investment in excess of net assets of subsidiary and associated companies eliminated against retained earnings (33) (337,482) (33) (337,482) Net income for the period 163,465 127,387 163,465 127,387 Less Dividend for 1999 and 1998 (79,407) (47,644) (79,407) (47,644) Unappropriated retained earnings at end of period 2,284,524 1,849,504 2,346,568 1,911,027 Appropriated retained earnings Legal reserve 218,456 116,872 158,813 57,750 Reserve for business expansion 87,401 87,401 85,000 85,000 Appropriated retained earnings at end of period 305,857 204,273 243,813 142,750 Retained earnings at end of period 2,590,381 2,053,777 2,590,381 2,053,777 See notes to financial statements BERLI JUCKER PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF RETAINED EARNINGS FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED) (Amounts in Thousands of Baht) Consolidated Company (more)