NOTE 6 - ACCOUNTS RECEIVABLE Accounts receivable as at June 30, classified by age can be summarized as follows:: (Amounts in Thousands of Baht) Consolidated Company 1999 1998 1999 1998 Less than 6 months 2,946,824 2,852,061 1,504,587 1,677,792 Over 6 months to 12 months 57,617 105,593 47,777 93,618 Over 12 months 164,289 130,725 137,629 96,204 Total 3,168,730 3,088,379 1,689,993 1,867,614 At June 30, 1999 and 1998 the Company provided an allowance for doubtful accounts in the amount of Baht 167.57 million and Baht 165.91 million, respectively, for the consolidated financial statements and Baht 141.15 million and Bath 141.70 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 June 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 3,905 3,856 and machinery Polipharm Co., Ltd. Manufacture of 100.00% in 1998 - - - 12,950 - 67,938 pharmaceuticals Siam Snack Co., Ltd Manufacture of 100.00% - - 170,042 170,042 208,253 201,160 snack foods Rubia Investments Ltd. Investment vehicle 100.00% in 1999 - - 753,700 - 760,246 - Cosma Ltd. Dormant 100.00% - - 100 100 200 197 (A subsidiary holds 98.00%) Rubia Industries Ltd. Manufacture of 99.70% - - 19,256 19,256 227,279 109,539 soap, cosmetics & confectionery Berli Jucker Specialties Co., Ltd) (Former name : Tropicwood Co., Ltd) Dormant 98.30% - - 4,304 4,304 625 4,252 Thai Glass Industries PCL. Manufacture of 97.92% in 1999 - - 3,004,755 1,683,382 3,154,912 2,023,574 glass containers and 66.13% in 1998 Thai Flourspar & Minerals Co.,Manufacture of 95.00% - - 1,900 1,900 19,367 20,904 Ltd. calcium carbonate Cellox Paper Co., Ltd. Manufacture of 75.88% in 1999 - - 509,153 499,939 706,476 628,052 paper products and 74.66% in 1998 Thai-Scandic Steel Co., Ltd. Manufacture of 97.03% of ordinary - - 191,200 130,000 178,044 130,000 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 73,979 39,565 surgical gowns Berli Prospack Co., Ltd. Manufacture of 50.00% - - 68,150 108,000 66,123 81,311 plastic containers Associated Companies BJC Marine Resources Dormant 50.00% 15,348 16,325 15,377 24,377 15,348 6,325 Development Co., Ltd. Thai-Swiss Metal Works Co., Ltd. Dormant 50.00% - - - - - - ADAT Sales (Thailand) Ltd.Travel 48.32% 2,289 2,494 - - - - Thai-Pacific Foods Ltd. Dormant 47.33% - - - - - - Bell International Surveyors Surveying 41.00% in 1998 - 5,459 - 1,230 - 5,459 & Adjusters Ltd. BJT Water Co., Ltd. Consultancy and 35.00% 22,002 18,216 7,000 3,500 22,002 18,216 management service for water and waste water systems Beston Food (Shanghai) Co., Ltd. Manufacture of 34.00% 27,447 37,336 26,686 37,336 27,447 37,336 snack foods O-I Pacific (Machinery Sale of machinery 29.38% in 1999 4,452 2,070 - - - - and Distribution) Ltd. for glass container and 19.84% in 1998 factories Pacific Leisure (Thailand) Ltd. Travel 23.67% 2,536 2,344 - - - - Siemens Limited Electrical engineering telecommunications and mass transportation 25.50% in 1998 - 80,000 - 80,000 - 80,000 Total Investments in Related Parties 74,074 164,244 4,825,199 2,799,292 5,464,206 3,467,684 (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 Unit Trust of Bualuang Capital Augmented Preferred Securities Fund Fund 0.09% in 1999 35,000 - 35,000 - 35,000 - Total Investments in Other Companies 255,916 200,266 255,866 200,216 255,866 200,216 At June 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 36.46 million and Baht 32.52 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 six-month periods ended June 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 14.1million) which was represented as share capital received in advance at June 30, 1998. 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 general accepted accounting principles . NOTE 10 - OTHER FINANCING INCOME In the normal course of business the Company undertakes financial transactions to minimise the cost of its foreign exchange hedging activities. For the six-month period ended June 30, 1999 and 1998 these activities produced a net receipt which, under generally accepted accounting standards, has been accounted for as "other financing income". The receipts were, in substance, 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 June 30, 1999 to the extent of Baht 520.8 million. NOTE 13 - COMMITMENTS At June 30, 1999 subsidiary companies had commitments for capital expenditures in the approximate amount of Baht 180.0 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 six-month periods ended June 30, 1999 and 1998 are summarized below: Baht (Million) Packaging Technical & Consumer products 1999 1998 products & Engineering Others Total Total Sales 1999 3,690.5 1,772.6 12.4 5,475.5 1998 3,486.9 1,944.8 15.4 5,447.1 Operating profit (loss) before interest excluding proportion attributable to minority interests 1999 639.5 50.9 (2.4) 688.0 1998 471.0 74.2 (10.1) 535.1 Minority interests proportion in operating profit before tax 5.9 97.3 Operating profit before interest 693.9 632.4 General corporate expenses (106.9) (73.5) Loss on disposal of investments (3.6) - Other financing income 15.2 82.6 Net interest (expense)income (84.7) (161.5) Loss on foreign exchange (0.7) (159.2) Loss on diminution in value of assets (17.0) Net income before tax 513.2 303.8 Income tax (154.0) (44.8) Net income before minority interests and extraordinary items 359.2 259.0 Minority interests 0.3 (75.7) Net income after minority interests 359.5 183.3 Extraordinary items - (92.6) Net income 359.5 90.7 As at June 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 5,819.0 493.2 51.8 6,364.0 - 1998 5,894.5 519.1 61.3 - 6,474.9 General assets used 772.3 804.5 Total Property, Plant and Equipment - Net 7,136.3 7,279.4 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 the majority of the preparations are already complete. Finalization and testing of contingency plans will be complete by the end of August 1999. 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.