FINANCIAL STATEMENTS QUARTER 3/1999

INDEPENDENT AUDITOR'S REPORT ON REVIEW OF THE INTERIM FINANCIAL STATEMENTS To the Shareholders of Singer Thailand Public Company Limited I have performed a review of the accompanying consolidated and company balance sheets as at 30 September 1999 and 1998 and the related consolidated and company statements of income, of changes in shareholders' equity, of retained earnings and of cash flows for the three-month and nine-month periods then ended of Singer Thailand Public Company Limited and its subsidiaries, and of Singer Thailand Public Company Limited. These interim financial statements are the responsibility of the company's management. My responsibility is to issue a report on these interim financial statements based on my review. I conducted my review 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 the financial statements, making an analytical review of pertinent financial data, and making inquiries of officials of the company who have responsibility for financial and accounting matters. This review 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, I express no opinion on the financial statements which I have reviewed. Based on my review, I am not aware of any material modifications that should be made to the aforementioned interim consolidated and company financial statements for them to be in conformity with generally accepted accounting principles. I draw attention to the note 1 to the interim consolidated and company financial statements regarding economic crisis and effects on the company's operations. The company's operations have been affected, and are expected to continue to be affected for the foreseeable future, by the current economic crisis. The ultimate outcome of this crisis cannot be determined at present. SUCHART LUENGSURASWAT Certified Public Accountant (Thailand) No. 2807 PricewaterhouseCoopers ABAS Limited Bangkok 29 October 1999 The accompanying financial statements are not intended to present the financial position, results of operations, and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Thailand. SINGER THAILAND PUBLIC COMPANY LIMITED BALANCE SHEETS AS AT 30 SEPTEMBER (UNAUDITED) ASSETS Consolidated Company 1999 1998 1999 1998 Notes Baht Baht Baht Baht CURRENT ASSETS Cash in hand, at banks and in transit 115,154,449 57,341,964 114,161,787 54,307,423 Short-term investments 3 50,000,000 230,000,000 50,000,000 230,000,000 Trade and installment accounts receivable (net) 4 2,811,456,920 3,501,344,898 2,801,978,678 3,491,657,031 Inventories 837,662,702 989,149,198 798,297,567 936,364,484 Amounts due from subsidiaries 5 - - 553,388 1,853,594 Loans to subsidiaries 6 - - 103,500,000 107,000,000 Other current assets 28,468,647 58,001,318 23,317,999 50,674,664 TOTAL CURRENT ASSETS 3,842,742,718 4,835,837,378 3,891,809,419 4,871,857,196 RECEIVABLE FROM AND LOANS TO EMPLOYEES 2,320,375 4,951,560 1,074,446 3,936,383 LONG-TERM INVESTMENTS 7 1,939,914 1,939,914 131,129,742 133,385,735 PROPERTY, PLANT AND EQUIPMENT (net) 713,967,323 727,909,196 561,132,768 572,318,926 PREPAID RENT 81,471,508 96,719,729 81,471,508 96,719,729 TOTAL ASSETS 4,642,441,838 5,667,357,777 4,666,617,883 5,678,217,969 SINGER THAILAND PUBLIC COMPANY LIMITED BALANCE SHEETS AS AT 30 SEPTEMBER (UNAUDITED) LIABILITIES AND SHAREHOLDERS' EQUITY Consolidated Company 1999 1998 1999 1998 Notes Baht Baht Baht Baht CURRENT LIABILITIES Bank overdrafts and short-term loans 120,253,841 521,810,838 116,213,041 513,384,568 Current portion of long-term loans 16 891,235,200 105,789,500 891,235,200 105,789,500 Unsecured debentures due within one year 500,000,000 - 500,000,000 - Trade accounts payable - other companies 238,285,205 230,128,592 222,360,711 218,125,133 - related companies 8 6,092,136 6,873,860 6,092,136 6,873,860 - subsidiaries 9 - - 45,181,775 38,592,466 Amounts due to related company 10 1,811,244 9,882,823 928,269 9,501,023 Dividends payable 12 13,622,659 35,445,645 13,622,659 35,445,645 Accrued income tax 1,876,199 2,926,738 - - Accrued liabilities 169,616,030 367,825,489 166,607,117 363,563,607 Other current liabilities 11 31,487,403 45,365,927 31,276,085 44,693,390 TOTAL CURRENT LIABILITIES 1,974,279,917 1,326,049,412 1,993,516,993 1,335,969,192 LIABILITIES ARISING FROM INVESTMENTS IN SUBSIDIARIES 7 - - 7,210,738 1,846,969 UNSECURED DEBENTURES - 500,000,000 - 500,000,000 LONG-TERM LOANS 16 334,200,000 1,491,524,200 334,200,000 1,491,524,200 PROVISION FOR RETIREMENT COST 48,082,168 51,258,527 46,500,000 50,800,000 EMPLOYEES SECURITY DEPOSITS 137,783,081 151,170,165 137,207,903 150,722,135 PROVIDENT FUNDS 172,442,609 195,681,919 172,328,186 195,681,919 TOTAL LIABILITIES 2,666,787,775 3,715,684,223 2,690,963,820 3,726,544,415 SINGER THAILAND PUBLIC COMPANY LIMITED BALANCE SHEETS AS AT 30 SEPTEMBER (UNAUDITED) LIABILITIES AND SHAREHOLDERS' EQUITY (CONT'D) Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht SHAREHOLDERS' EQUITY Share capital Registered, issued and fully paid 27,000,000 ordinary shares of Baht 10 each 270,000,000 270,000,000 270,000,000 270,000,000 Share premium 225,000,000 225,000,000 225,000,000 225,000,000 Surplus on revaluation of land 240,926,403 241,546,403 240,926,403 241,546,403 Retained earnings Appropriated - legal reserve 27,000,000 27,000,000 27,000,000 27,000,000 Unappropriated 1,212,727,660 1,188,127,151 1,212,727,660 1,188,127,151 TOTAL SHAREHOLDERS' EQUITY 1,975,654,063 1,951,673,554 1,975,654,063 1,951,673,554 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 4,642,441,838 5,667,357,777 4,666,617,883 5,678,217,969 SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Note Baht Baht Baht Baht REVENUES Sales 805,996,738 651,991,267 800,733,513 642,617,169 Interest income from installment sales 127,535,200 170,737,499 127,535,200 170,737,499 Other income 12 1,635,431 65,481,560 1,273,855 65,110,993 TOTAL REVENUES 935,167,369 888,210,326 929,542,568 878,465,661 EXPENSES Cost of sales 515,684,907 444,056,900 515,800,699 437,604,420 Selling and administrative expenses 363,854,354 407,132,667 358,437,719 401,552,495 Directors' remuneration 100,000 100,000 100,000 100,000 Interest and other financial costs 51,434,412 90,202,180 48,829,318 85,803,627 TOTAL EXPENSES 931,073,673 941,491,747 923,167,736 925,060,542 Income (loss) from operations before income tax 4,093,696 (53,281,421) 6,374,832 (46,594,881) Income tax 826,128 442,676 - - Income (loss) after income tax 3,267,568 (53,724,097) 6,374,832 (46,594,881) Share of (loss) from subsidiaries - - (3,107,264) (7,129,216) NET INCOME (LOSS) FOR THE PERIOD 3,267,568 (53,724,097) 3,267,568 (53,724,097) EARNINGS (LOSS) PER SHARE 0.12 (1.99) 0.12 (1.99) SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF INCOME (UNAUDITED) FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Notes Baht Baht Baht Baht REVENUES Sales 2,599,739,144 2,645,030,945 2,576,783,522 2,609,085,912 Interest income from installment sales 394,567,985 594,215,688 394,567,985 594,215,687 Other income 12 27,967,155 78,586,940 26,959,874 78,156,981 TOTAL REVENUES 3,022,274,284 3,317,833,573 2,998,311,381 3,281,458,580 EXPENSES Cost of sales 1,669,468,456 1,696,469,697 1,661,783,437 1,679,198,449 Selling and administrative expenses 1,135,004,060 1,349,094,151 1,117,295,151 1,336,322,889 Directors' remuneration 300,000 300,000 300,000 300,000 Interest and other financial costs 167,190,534 299,859,764 160,721,438 289,115,728 TOTAL EXPENSES 2,971,963,050 3,345,723,612 2,940,100,026 3,304,937,066 Income (loss) from operations before income tax 50,311,234 (27,890,039) 58,211,355 (23,478,486) Income tax 2,437,840 2,971,319 - - Income (loss) after income tax 47,873,394 (30,861,358) 58,211,355 (23,478,486) Share of (loss) from subsidiaries - - (10,337,961) (4,718,508) Income (loss) before extraordinary item 47,873,394 (30,861,358) 47,873,394 (28,196,994) Extraordinary item: 15 Gain from the change in exchange rate system - 47,708,284 - 45,043,920 NET INCOME FOR THE PERIOD 47,873,394 16,846,926 47,873,394 16,846,926 EARNINGS PER SHARE Income (loss) before extraordinary item 1.77 (1.14) 1.77 (1.04) Extraordinary item - 1.77 - 1.67 Net income for the period 1.77 0.63 1.77 0.63 SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) FOR THE THREE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Note Baht Baht Baht Baht Share capital - ordinary shares Beginning balance 270,000,000 270,000,000 270,000,000 270,000,000 Addition during the period - - - - Ending balance 270,000,000 270,000,000 270,000,000 270,000,000 Additional paid - in capital Share premium Beginning balance 225,000,000 225,000,000 225,000,000 225,000,000 Addition during the period - - - - Ending balance 225,000,000 225,000,000 225,000,000 225,000,000 Surplus on revaluation of land Beginning balance 240,926,403 234,946,403 240,926,403 234,946,403 Addition during the period - 6,600,000 - 6,600,000 Ending balance 240,926,403 241,546,403 240,926,403 241,546,403 Retained earnings Appropriated - legal reserve Beginning balance 27,000,000 27,000,000 27,000,000 27,000,000 Addition during the period - - - - Ending balance 27,000,000 27,000,000 27,000,000 27,000,000 Unappropriated retained earnings Beginning balance 1,236,460,092 1,241,851,248 1,236,460,092 1,241,851,248 Less: Dividends 17 (27,000,000) - (27,000,000) - Add: Net income (loss) for the period 3,267,568 (53,724,097) 3,267,568 (53,724,097) Ending balance 1,212,727,660 1,188,127,151 1,212,727,660 1,188,127,151 TOTAL SHAREHOLDERS' EQUITY 1,975,654,063 1,951,673,554 1,975,654,063 1,951,673,554 SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Note Baht Baht Baht Baht Share capital - ordinary shares Beginning balance 270,000,000 270,000,000 270,000,000 270,000,000 Addition during the period - - - - Ending balance 270,000,000 270,000,000 270,000,000 270,000,000 Additional paid - in capital Share premium Beginning balance 225,000,000 225,000,000 225,000,000 225,000,000 Addition during the period - - - - Ending balance 225,000,000 225,000,000 225,000,000 225,000,000 Surplus on revaluation of land Beginning balance 241,546,403 235,866,403 241,546,403 235,866,403 Addition during the period - 6,600,000 - 6,600,000 Deduction during the period (620,000) (920,000) (620,000) (920,000) Ending balance 240,926,403 241,546,403 240,926,403 241,546,403 Retained earnings Appropriated - legal reserve Beginning balance 27,000,000 27,000,000 27,000,000 27,000,000 Addition during the period - - - - Ending balance 27,000,000 27,000,000 27,000,000 27,000,000 Unappropriated retained earnings Beginning balance 1,191,854,266 1,171,280,225 1,191,854,266 1,171,280,225 Less: Dividends 17 (27,000,000) - (27,000,000) - Add: Net income for the period 47,873,394 16,846,926 47,873,394 16,846,926 Ending balance 1,212,727,660 1,188,127,151 1,212,727,660 1,188,127,151 TOTAL SHAREHOLDERS' EQUITY 1,975,654,063 1,951,673,554 1,975,654,063 1,951,673,554 SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF RETAINED EARNINGS (UNAUDITED) FOR THE THREE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Note Baht Baht Baht Baht Unappropriated retained earnings Beginning balance 1,236,460,092 1,241,851,248 1,236,460,092 1,241,851,248 Dividend 17 (27,000,000) - (27,000,000) - Net income (loss) for the period 3,267,568 (53,724,097) 3,267,568 (53,724,097) Total unappropriated retained earnings 1,212,727,660 1,188,127,151 1,212,727,660 1,188,127,151 Appropriated retained earnings Legal reserve, beginning 27,000,000 27,000,000 27,000,000 27,000,000 balance Additional reserve for the period - - - - Total appropriated retained earnings 27,000,000 27,000,000 27,000,000 27,000,000 Total retained earnings 1,239,727,660 1,215,127,151 1,239,727,660 1,215,127,151 SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF RETAINED EARNINGS (UNAUDITED) FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Note Baht Baht Baht Baht Unappropriated retained earnings Beginning balance 1,191,854,266 1,171,280,225 1,191,854,266 1,171,280,225 Dividends 17 (27,000,000) - (27,000,000) - Net income for the period 47,873,394 16,846,926 47,873,394 16,846,926 Total unappropriated retained earnings 1,212,727,660 1,188,127,151 1,212,727,660 1,188,127,151 Appropriated retained earnings Legal reserve, beginning balance 27,000,000 27,000,000 27,000,000 27,000,000 Additional reserve for the period - - - - Total appropriated retained earnings 27,000,000 27,000,000 27,000,000 27,000,000 Total retained earnings 1,239,727,660 1,215,127,151 1,239,727,660 1,215,127,151 SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht CASH FLOWS FROM OPERATING ACTIVITIES: Income (loss) for the period 3,267,568 (53,724,097) 3,267,568 (53,724,097) Adjusted by: Loss(gain) on exchange rate 6,056,564 (13,493,748) 6,056,564 (13,493,748) Depreciation 9,481,679 10,824,308 8,745,107 10,092,788 Amortisation of prepaid rent 6,860,296 6,278,489 6,860,296 6,278,489 Increase in allowance for doubtful accounts 630,000 53,937,524 300,000 53,937,524 (Decrease) in allowance for inventory obsolescence (4,876,008) (5,718,077) (4,950,000) (5,000,000) Provision for diminution in value of other investment - 170,000 - 170,000 (Gain) on disposal of fixed assets (564,024) (128,705) (564,024) (128,705) Share of loss from subsidiaries - - 3,107,264 7,129,216 Decrease in inventories 28,491,116 123,893,458 26,229,152 119,033,116 Decrease in debtors and other current assets 156,468,523 460,463,767 154,036,235 458,839,158 Increase (decrease) in creditors and other current liabilities 11,121,162 (169,274,831) 14,022,710 (173,738,851) Increase in accrued income tax 460,836 321,019 - - Net cash inflow from operating activities 217,397,712 413,549,107 217,110,872 409,394,890 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sales of fixed assets 564,025 255,455 564,025 255,455 Purchases of fixed assets (7,020,893) (4,259,630) (7,020,893) (4,161,820) Decrease in loans to subsidiaries - - - 4,347,000 (Increase) in prepaid rent (3,798,344) (2,327,000) (3,798,344) (2,327,000) Decrease in receivable from and loans to employees 255,633 922,641 194,349 605,600 Net cash (outflow) from investing activities (9,999,579) (5,408,534) (10,060,863) (1,280,765) SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS (UNAUDITED) (Cont'd) FOR THE THREE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht CASH FLOWS FROM FINANCING ACTIVITIES: (Decrease) in bank overdrafts and short-term loans (75,322,742) (185,835,745) (74,761,888) (185,562,546) Repayment of long-term loans (161,528,970) (20,000,000) (161,528,970) (20,000,000) (Decrease) in employees security deposits and provident funds (16,545,836) (29,777,354) (15,531,995) (30,117,328) Dividend paid (Note 17) (24,107,417) - (24,107,417) - Net cash (outflow) from financing activities (277,504,965) (235,613,099) (275,930,270) (235,679,874) (Decrease) increase in cash and cash equivalents (70,106,832) 172,527,474 (68,880,261) 172,434,251 Cash and cash equivalents at beginning of the period 235,261,281 114,814,490 233,042,048 111,873,172 Cash and cash equivalents at end of the period (Note 13) 165,154,449 287,341,964 164,161,787 284,307,423 ADDITIONAL CASH FLOWS INFORMATION Interest paid during the period 34,440,701 93,961,239 31,800,407 89,567,487 Income tax paid during the period 84,389 111,099 84,203 110,679 SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht CASH FLOWS FROM OPERATING ACTIVITIES: Income (loss) before extraordinary item 47,873,394 (30,861,358) 47,873,394 (28,196,994) Adjusted by: (Gain) on exchange rate (2,535,071) (13,493,748) (2,535,071) (13,493,748) Depreciation 32,206,076 32,961,104 29,997,903 31,170,404 Amortisation of prepaid rent 17,768,249 17,630,919 17,768,249 17,630,919 Increase in allowance for doubtful accounts 22,517,800 133,691,200 20,799,000 133,570,000 (Decrease) in allowance for inventory obsolescence (11,817,323) (14,441,378) (11,200,000) (11,100,000) Provision for diminution in value of other investment - 1,170,000 - 1,170,000 (Decrease) in dividends payable (Note 12) (24,317,729) - (24,317,729) - (Gain) on disposal of fixed assets (941,857) (383,733) (941,857) (1,100,043) Share of loss from subsidiaries - - 10,337,961 4,718,508 Decrease in inventories 108,841,891 455,758,536 98,692,810 440,726,623 Decrease in debtors and other current assets 277,809,441 1,008,319,047 271,144,988 1,024,811,685 Increase (decrease) in creditors and other current liabilities (6,517,323) (330,373,931) 2,150,453 (331,977,358) Increase in accrued income tax 977,757 1,617,337 - - Cash flows from operating activities before extraordinary item 461,865,305 1,261,593,995 459,770,101 1,267,929,996 Realised gain from the change in exchange rate system - 22,894,374 - 20,230,010 Net cash inflow from (more)