Interest expense - - 526 417 Transactions with associated and other companies Dividend income 14,700 6,745 14,700 6,745 Interest income 10,152 7,837 10,152 7,837 Interest expense 1,029 609 1,029 609 Business transactions between the Company and related parties are conducted during the ordinary course of business; the price of goods sold is based upon normal profit margins over the cost of the related goods and services and interest rates are based on the Company's cost of borrowing and market rates. At September 30, 1999 and 1998 the outstanding balances with related parties were as follows: (Amounts in Thousands of Baht) Consolidated. Company 1999 1998 1999 1998 Accounts receivable- related parties Subsidiary Companies Berli Jucker (Myanmar) Ltd. - - 2,711 3,875 Rubia Industries Ltd. - - 8,435 - Siam Snack Co., Ltd. - - 4,327 - Thai-Scandic Steel Co., Ltd. - - 19 - Thai Glass Industries PCL. - - 13,862 - Berli Prospack Co., Ltd. - - 9 - Berli Jucker Specialties Ltd. (Former name: Tropicwood Co., Ltd.) - - 153,174 - Total - - 182,537 3,875 (Amounts in Thousands of Baht) Consolidated Company 1999 1998 1999 1998 Accounts payable- related parties Subsidiary Companies Polipharm Co., Ltd. - - - 1,134 Siam Snack Co., Ltd. - - 8,023 62,912 Rubia Industries Ltd. - - 23,518 89,690 Thai Glass Industries PCL. - - 191,880 109,283 Thai Flourspar & Minerals Co., Ltd. - - - 2,143 Cellox Paper Co., Ltd. - - 2,374 58,501 Berli Jucker Specialties Ltd. (Former name: Tropicwood Co., Ltd.) - - 119 - Total - - 225,914 323,663 (Amounts in Thousands of Baht) Consolidated Company 1999 1998 1999 1998 Lease receivable from a related party - current portion - - 36,000 36,000 - non-current portion - - 4,500 40,500 The lease receivable from a related party represents amounts outstanding under a five-year finance lease for machinery and equipment entered into with Cellox Paper Co., Ltd. in November 1995. The lease carries interest at 12% per annum. (Amounts in Thousands of Baht) Consolidated Company 1999 1998 1999 1998 Short-term loans and advances to related parties Subsidiary Companies Siam Snack Co., Ltd. - - 9,968 73,107 Polipharm Co., Ltd. - - - 31,937 Cosma Ltd. - - 463 349 Rubia Industries Ltd. - - 64,937 80,230 Thai Sancella Co., Ltd. - - 4,476 4,559 Thai-Scandic Steel Co., Ltd. - - 74,593 211,423 Berli Jucker Specialties Ltd. (net of allowance for doubtful account Baht 9 million) (Former name : Tropicwood Co., Ltd.) - - 72,544 29,358 Thai Glass Industries PCL. - - 379,213 307,618 Cellox Paper Co., Ltd. - - 2,636 4,367 Agri-Systems (Thailand) Co., Ltd. - - 34,623 21,504 Thai Klinipro Co., Ltd. 645 - 6 20,255 Berli Prospack Co., Ltd. - - 18,462 58,318 Rubia Investments Ltd. - - 232 - Associated Companies O-I Pacific (Machinery and Distribution) Ltd. - 836 - - BJT Water Co., Ltd. 3,840 3,864 3,840 3,864 Bell Survey Ltd. (Former name : Bell International Surveyors & Adjusters Ltd.) - 1,618 - 1,618 Beston Food (Shanghai) Co., Ltd. 9,715 6,953 9,715 6,953 Pacific Leisure (Thailand) Ltd. Group - 258 - 258 Other Companies Pathum Thani Water Co., Ltd. 146,880 105,485 146,880 105,485 Prospack Co., Ltd. Group 176 134 - - Total 161,256 119,148 822,588 961,203 Short-term loans and advances from related parties Subsidiary Company Montana Co., Ltd. - - 5,028 4,531 Associated Companies Prospack Co., Ltd. Group 12 - - - Pacific Leisure (Thailand) Ltd. Group 13 - - - Other Companies J.N.P.A. Co., Ltd. 17,241 - 17,241 - Reime Jarlso AS - 11,763 - - Total 17,266 11,763 22,269 4,531 NOTE 6 - ACCOUNTS RECEIVABLE Accounts receivable as at September 30, classified by age can be summarized as follows: (Amounts in Thousands of Baht) Consolidated Company 1999 1998 1999 1998 Less than 6 months 2,891,599 2,697,169 1,290,971 1,536,322 Over 6 months to 12 months 47,986 85,486 46,874 74,343 Over 12 months 171,380 159,707 139,426 130,983 Total 3,110,965 2,942,362 1,477,271 1,741,648 At September 30, 1999 and 1998 the Company provided an allowance for doubtful accounts in the amount of Baht 164.61 million and Baht 168.50 million, respectively, for the consolidated financial statements and Baht 132.61 million and Baht 144.59 million, respectively, for the Company's financial statements. NOTE 7-INVESTMENTS IN RELATED PARTIES AND OTHER COMPANIES Investments in related parties and other companies as at September 30, consisted of the following: (Amounts in Thousands of Baht) Consolidated Company Cost method Equity method Type of Business Group Shareholding 1999 1998 1999 1998 1999 1998 Subsidiary Companies Berli Jucker (Myanmar) Ltd. Import & export 100.00% - - 2,076 2,076 - - Montana Co., Ltd. Sales of cosmetics 100.00% - - 500 500 3,931 3,959 and machinery Polipharm Co., Ltd. Manufacture of 100.00% in 1998 - - - 12,950 - 69,332 pharmaceuticals Siam Snack Co., Ltd. Manufacture of 100.00% - - 170,042 170,042 201,189 202,938 snack foods Rubia Investments Ltd. Investment vehicle 100.00% in 1999 - - 753,700 - 766,498 - Cosma Ltd. Dormant 100.00% - - 100 100 201 198 (A subsidiary holds 98.00%) Rubia Industries Ltd. Manufacture of 99.70% - - 19,256 19,256 235,910 110,797 soap, cosmetics & confectionery Berli Jucker Specialties Limited Sales of chemicals 98.30% - - 4,304 4,304 5,731 3,492 (Former name : Tropicwood Co., Ltd.) Thai Glass Industries PCL. Manufacture of 97.92% in 1999 - - 3,005,091 2,996,758 3,309,256 2,931,642 glass containers and 97.74% in 1998 Thai Flourspar & Minerals Co., Manufacture of 95.00% - - 1,900 1,900 19,018 20,375 Ltd. calcium carbonate Cellox Paper Co., Ltd. Manufacture of 75.89% in 1999 - - 509,243 503,143 724,772 640,832 paper products and 75.08% in 1998 Thai-Scandic Steel Co., Ltd. Manufacture of 97.03% of ordinary - - 160,500 130,000 167,367 130,000 galvanized steel shares in 1999 and structures 71.04% in 1998 (A subsidiary holds 56.14% in 1999 and 75.00% in 1998) 100.00% of preference shares in 1998 (Amounts in Thousands of Baht) Consolidated Company Cost method Equity method Type of Business Group Shareholding 1999 1998 1999 1998 1999 1998 Thai Klinipro Co., Ltd. Manufacture of 51.00% - - 51,000 20,400 77,895 43,149 surgical gowns Berli Prospack Co., Ltd. Manufacture of 50.00% - - 60,950 113,000 60,886 85,144 plastic containers Associated Companies BJC Marine Resources Dormant 50.00% 15,092 16,130 15,377 16,377 15,092 16,130 Development Co., Ltd. Thai-Swiss Metal Works Co., Ltd. Dormant 50.00% - - - - - - ADAT Sales (Thailand) Ltd. Travel 48.32% 2,289 2,499 - - - - Thai-Pacific Foods Ltd. Dormant 47.33% - - - - - - BJT Water Co., Ltd. Consultancy and 35.00% 24,004 17,436 17,500 7,000 24,004 17,436 management service for water and waste water systems Beston Food (Shanghai) Co., Ltd. Manufacture of 34.00% 23,558 36,535 23,686 37,336 23,558 36,535 snack foods O-I Pacific (Machinery and Sale of machinery 29.38% in 1999 4,634 2,484 - - - - Distribution) Ltd. for glass container and 29.32% in 1998 factories Pacific Leisure (Thailand) Ltd. Travel 23.67% 2,535 2,325 - - - - Siemens Limited Electrical engineering 25.50% in 1998 - 80,000 - 80,000 - 80,000 telecommunications and mass transportation Total Investments in Related Parties 72,112 157,409 4,795,225 4,115,142 5,635,308 4,391,959 (Amounts in Thousands of Baht) Consolidated Company Cost method Equity method Type of Business Group Shareholding 1999 1998 1999 1998 1999 1998 Other Companies Siam Industrial Products Ltd. Import 20.00% 50 50 - - - - (25.00% paid up) J.N.P.A. Co., Ltd. Property holding 17.24% 53,779 53,779 53,779 53,779 53,779 53,779 Pathum Thani Operations Co., Ltd. Rendering services for 17.00% in 1999 850 - 850 - 850 - water treatment Pathum Thani Water Co., Ltd. Clean water supply 15.00% 165,300 145,500 165,300 145,500 165,300 145,500 Siam Cement Myanmar Trading Ltd. Cement distributor 15.00% 837 837 837 837 837 837 Thaiviet Invexim Co., Ltd. Import & export 1.00% 100 100 100 100 100 100 Total Investments in Other Companies 220,916 200,266 220,866 200,216 220,866 200,216 At September 30, 1999 and 1998 the Company had an excess loss over book value of investments in Agri- Systems (Thailand) Co., Ltd. and Berli Jucker (Myanmar) Ltd. totalling Baht 37.64 million and Baht 33.29 million respectively, which is shown as other liabilities in the Company's financial statements. The recording of investments in subsidiary and associated companies by using the equity basis in the financial statements for the nine-month periods ended September 30, 1999 and 1998 is based on financial information obtained from reviewed financial statements and from management, which has not been audited or reviewed by the auditors in accordance with standards established by The Institute of Certified Accountants and Auditors of Thailand. NOTE 8 - SHARE CAPITAL A special resolution was passed by the extraordinary general meeting of shareholders held on June 5, 1998 authorizing an increase in the authorized share capital of the Company by Baht 1,010,625,000 by issuing 101,062,500 new ordinary shares with a par value of Baht 10 each, thus increasing the authorized share capital from Baht 577,500,000 to Baht 1,588,125,000. The new ordinary shares were offered on a rights basis to all existing shareholders at a price per share of Baht 40 in the proportion of 7 new ordinary shares for every 4 existing shares held. On June 26, 1998, all rights had been fully subscribed and the Company received Baht 4,042.5 million in subscription monies (net of expenses - Baht 14.1 million). The Company registered the increase in share capital on July 7, 1998. NOTE 9 - SHARE OF PROFITS LESS LOSSES OF SUBSIDIARY AND ASSOCIATED COMPANIES Share of profits less losses of subsidiary and associated companies included a provision in respect of the suspension of a subsidiary business segment in the amount of Baht 92.58 million in 1998. This has been classified as an extraordinary item in the consolidated accounts in conformity with the generally accepted accounting principles. NOTE 10 - OTHER FINANCING EXPENSES (INCOME) In the normal course of business the Company undertakes financial transactions to minimise the cost of its foreign exchange hedging activities. For the nine-month periods ended September 30, 1999 and 1998 these activities produced a net payment and net receipt, respectively which, under generally accepted accounting standards, has been accounted for as "other financing expenses (income)". The payments or receipts were, in substance, an addition or a reduction in the cost of hedging US dollar denominated indebtedness. NOTE 11 - EXTRAORDINARY ITEMS In 1998, Thai Glass Industries Public Company Limited suspended its Vietnam Glass Project as demand for new glass bottles in Vietnam was substantially below original projections due to a combination of lower than forecast beverage consumption and a higher than anticipated re-usage rate of second hand bottles. The company decided to make a provision amounting to Baht 200 million, in connection with the project, as approved by the Board of Directors Meeting held on August 13, 1998. NOTE 12 - CONTINGENCIES The Company was contingently liable as guarantor of credit facilities for related parties at September 30, 1999 to the extent of Baht 460.02 million. NOTE 13 - COMMITMENTS At September 30, 1999 subsidiary companies had commitments for capital expenditures in the approximate amount of Baht 134.0 million. NOTE 14 - SEGMENT INFORMATION For financial accounting purposes the Group divides its core business into two areas: Packaging & Consumer products and Technical products & Engineering. Non-core operations are grouped as Others. The results of operations for the nine-month periods ended September 30, 1999 and 1998 are summarized below: Baht (Million) Packaging Technical & Consumer products 1999 1998 products & Engineering Others Total Total Sales 1999 5,531.0 2,671.5 28.8 8,231.3 1998 5,037.6 2,837.8 27.9 7,903.3 Operating profit (loss) before interest excluding proportion attributable to minority interests 1999 928.9 93.0 (5.6) 1,016.3 1998 517.9 172.0 7.8 697.7 Minority interests proportion in operating profit before tax 54.9 141.0 Operating profit before interest 1,071.2 838.7 General corporate expenses (145.5) (158.6) Loss on disposal of investments (2.5) - Other financing (expenses)income (24.4) 158.8 Net interest expense (127.3) (165.1) Loss on foreign exchange (26.9) (155.7) Loss on diminution in value of assets - (17.0) Net income before income tax 744.6 501.1 Income tax (218.6) (106.8) Net income before minority interests and extraordinary items 526.0 394.3 Minority interests (3.1) (83.6) Net income after minority interests 522.9 310.7 Extraordinary items - (92.6) Net income 522.9 218.1 As at September 30, 1999 and 1998 property, plant and equipment, net of accumulated depreciation and amortization, were allocated as follows: Baht (Million) Packaging Technical & Consumer products 1999 1998 products & Engineering Others Total Total Property, plant and equipment: 1999 5,874.1 500.4 51.1 6,425.6 - 1998 5,878.5 513.7 60.8 - 6,453.0 General assets used 761.6 810.8 Total Property, Plant and Equipment - Net 7,187.2 7,263.8 NOTE 15 - YEAR 2000 COMPUTER ISSUES (BEING UNAUDITED AND UNREVIEWED AND NOT FORMING PART OF ACCOUNTANTS' REVIEW REPORT) The Year 2000 problem arises because many computerized systems use two digits rather than four to identify the year. Date-sensitive systems may recognize the year 2000 as some other dates, resulting in errors when information using year 2000 dates is processed. Entities may experience the effects of the Year 2000 problem before, on, or after January 1, 2000, and the effects on operations and financial reporting, if not addressed and repaired properly and timely, may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. In addition, it is not possible to be certain that all aspects of the Year 2000 problem affecting the entity, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. The Company has commenced its plan to address the Year 2000 compliance problem and it are already complete. Although the Company has the problem remedied by the time Year 2000 occurs, the operations of the Company would still remain at risk from other entities with which the Company undertakes business if they are unable to remedy their own problems in time.