NUAL CONSOLIDATED FINANCIAL STATEMENTS 1999 (ADJUSTMENT)

Losses arising from restructuring, less recorded allowance for doubtful accounts, are recognised in the statement of income when incurred. Legal fees and other direct costs incurred to effect the debt restructuring is included in expense when incurred. Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements 31 December 1999 and 1998 3.7 Investments Since 1 January 1999 Investment in debt securities which are classified as held-to-maturity securities are carried at amortised cost. Investment in non-marketable equity securities which are classified as general investments are carried at cost. A test for impairment is carried out when there is a factor indicating that such investment might be impaired. If the carrying value of the investment is less than its recoverable amount, impairment loss is charged to the income statement. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the income statement. When disposing of part of the Group's holding of a particular investment in debt or equity securities, the carrying amount of the disposed part is determined from the weighted average carrying amount of the total holding of the investments. Prior to 1 January 1999 General investments are stated at cost less provision for permanent diminution in value. 3.8 Inventories Inventories are stated at the lower of cost or net realisable value. Cost is determined by the first-in, first-out method. The cost of purchase comprises both the purchase price and costs directly attributable to the acquisition of the inventory, such as import duties and transportation charge, less all attributable discounts, allowances or rebates. Net realisable value is the estimate of the selling price in the ordinary course of business, less selling expenses. Provision is made, where necessary, for obsolete, slow-moving and defective inventories. 3.9 Property, Plant and Equipment Carrying value at appraised value Part of land is presented at market value appraised by an independent appraisal specialist in March 1992 and September 1998. A revaluation increase is recorded as a "Surplus on revaluation of land" under the shareholders' equity. Carrying value at cost Property, plant and equipment are recorded at cost. Cost is measured by the cash or cash equivalent price of obtaining the asset and bringing it to the location and condition necessary for its intended use. Property, plant and equipment, except land, are presented in the balance sheet at cost less accumulated depreciation. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Estimated recoverable amount is the higher of the anticipated discounted cash flows from the continuing use of the asset and the amount obtainable from the sale of the asset less any costs of disposal. Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements 31 December 1999 and 1998 3.9 Property, Plant and Equipment (Cont'd) Depreciation Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. The estimated useful lives are as follows: Buildings 20 years Leasehold improvements 5 Years Machinery and equipment 5 Years Furniture, fixtures and office equipment 5 Years Motor vehicles 5 Years The company records depreciation as an expense in the year. When an asset is retired, the company will write-off both the asset and the related accumulated depreciation from the accounts and recognised any gain or loss from retirement of the asset in the statement of income. Capital expenditure Expenditures for additions, renewals and betterments, which result in a substantial increase in the current replacement value of the assets are capitalised. Repair and maintenance costs are recognised as expenses when incurred. 3.10 Prepaid Rent Prepaid rent is amortised over the rental period on the straight-line basis. 3.11 Provision for Retirement Cost A defined retirement plan is provided for the employees who work with the Company more than 10 years. The plan is not funded but provision for the liability is recorded in the financial statements. The retirement cost is estimated by the Company's management based on the current salary of employees who are entitle to the plan, the retirement rate and the past experience on the number of retired employees. The Company's retirement rate is not less than the rate determined in the Labor Law. 3.12 Revenue Recognition Sales comprise cash sales, credit sales and installment sales. Cash sales and credit sales are recognised when products are delivered. Installment sales represent sales under hire-purchase contracts whereby the related debts are effectively secured by the products sold. Revenue from installment sales comprises sales of product and interest. The interest on installment sales are calculated on customary financing terms. Sales of product and gross profit are recognised when contracts are signed and first payments are received. Interest is recorded in unearned carrying charges and recognised as earned by using the sum- of-the-months' digits method. Collection commissions are accrued upon collection. Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements 31 December 1999 and 1998 3.13 Comparatives In 1999, the Group implemented all the new Thai Accounting Standards, namely: TAS 32 Property, Plant and Equipment TAS 33 Borrowing Costs TAS 34 Accounting for Troubled Debt Restructurings TAS 35 Presentation of Financial Statements TAS 36 Impairment of Assets TAS 37 Revenue Recognition TAS 38 Earnings Per Share TAS 39 Net Profit or Loss for the Period, Fundamental Errors and Accounting Changes TAS 40 Accounting for Investments in Debt and Equity Securities There are no changes in accounting policy resulting from the adoption of the above standards in these financial statements, as the Group was already following the recognition and measurement principles in those standards, except for Thai Accounting Standard No. 40 Accounting for Investment in Debt and Equity Securities which reclassifies investments into new classifications as described in Note 3.7. The standard requires such change to be made prospectively and no retroactive adjustment is required. 4 Cash on Hand, at Banks and in Transit Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Cash on hand 110,000 80,000 80,000 80,000 Deposits with banks 170,185,322 97,197,332 164,925,950 95,817,133 Cash in transit 5,194,091 2,914,801 5,194,091 2,914,801 175,489,413 100,192,133 170,200,041 98,811,934 The weighted average effective interest rate of deposits with banks was 0.25 3% per annum (1998: 4.5 - 5% per annum). 5 Short-Term Investments Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Opening net book amount 30,000,000 100,000,000 30,000,000 100,000,000 Additions 50,000,000 1,523,000,000 50,000,000 1,523,000,000 Disposals (80,000,000) (1,593,000,000) (80,000,000) (1,593,000,000) Closing net book amount - 30,000,000 - 30,000,000 Short-term investments represent promissory notes for period not exceeding 3 months and are classified as held-to-maturity securities. Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements 31 December 1999 and 1998 6 Long-Term Investments Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Opening net book amount 1,939,914 1,939,914 800,000 800,000 Less: Current portion of debt security (1,139,914) - - - Closing net book amount 800,000 1,939,914 800,000 800,000 Consolidated 1999 Held to maturity General investments Total Baht Baht Baht Debt security - Krung Thai Bank Public Company Limited 1,139,914 - 1,139,914 Less: Current portion (1,139,914) - (1,139,914) - - - Equity security - Thai Swedish Furniture Company Limited - 5,970,000 5,970,000 - 5,970,000 5,970,000 Less: Provision for changes in value of investments - (5,170,000) (5,170,000) Total - 800,000 800,000 Company 1999 General investments Baht Equity security - Thai Swedish Furniture Company Limited 5,970,000 Less: Provision for changes in value of investments (5,170,000) Total 800,000 Singer Thailand Public Company Limited Notes To the Consolidated and Company Financial Statements 31 December 1999 and 1998 7 Trade and Installment Accounts Receivable, net Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Trade and installment accounts receivable 3,655,533,420 4,155,188,222 3,641,242,871 4,134,970,855 Less: Unearned carryings charges (532,052,485) (650,447,932) (532,052,485) (650,447,932) 3,123,480,935 3,504,740,290 3,109,190,386 3,484,522,923 Less: Allowance for doubtful accounts (455,070,000) (401,122,200) (453,200,000) (401,001,000) Trade and installment accounts receivable, net 2,668,410,935 3,103,618,090 2,655,990,386 3,083,521,923 Outstanding trade and installment accounts receivable as at 31 December can be analysed as follows: Trade accounts receivable installment sales and credit sales Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht 3-6 months 22,076,139 50,994,054 21,392,784 50,994,054 6-12 months 40,064,085 70,718,046 39,126,433 70,718,046 Over 12 months 80,427,665 140,523,354 79,590,838 140,523,354 142,567,889 262,235,454 140,110,055 262,235,454 Restructured debt (Note 8) 53,388,913 - 53,388,913 - 195,956,802 262,235,454 193,498,968 262,235,454 Less: Allowance for doubtful accounts (153,670,000) (156,121,200) (151,800,000) (156,000,000) 42,286,802 106,114,254 41,698,968 106,235,454 The aging of overdue accounts receivable in 1998 as presented above was not completely prepared as a result of the damage of the company's computer system by fire on 14 October 1998. However the company's management believed that the overdue accounts receivable balance was higher than actual results and they adequately provided allowance for doubtful accounts for the overdue balance. The computer system was restored to normal operations in February 1999. Singer Thailand Public Company Limited Notes To the Consolidated and Company Financial Statements 31 December 1999 and 1998 7 Trade and Installment Accounts Receivable, net (Con't) Trade accounts receivable - other Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht 3-6 months 12,579,036 - 12,579,036 - 6-12 months 38,315,855 - 38,315,855 - Over 12 months 78,733,177 - 78,733,177 - Total over 3 months - 162,145,853 - 162,145,853 129,628,068 162,145,853 129,628,068 162,145,853 Less: Allowance for doubtful accounts (58,900,000) (35,000,000) (58,900,000) (35,000,000) 70,728,068 127,145,853 70,728,068 127,145,853 In 1998, other trade accounts receivable were classified as overdue balances over 3 months only because the company did not prepare the aging report in detail in prior year. Employees receivable Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Employees receivable 303,169,122 262,518,246 303,169,122 262,518,246 Less: Allowance for doubtful accounts (242,500,000) (210,001,000) (242,500,000) (210,001,000) 60,669,122 52,517,246 60,669,122 52,517,246 Employees receivable are the amount of damage caused by employees' faulty in their responsibilities. The company have already made provision up to 80% of them. However the Company's management believes that the Company can collect the other by 20% from them. Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements 31 December 1999 and 1998 8 Troubled Debt Restructurings (TDR) As at 31 December 1999, the company has an outstanding receivable which has been restructured as follows: Consolidated Company Outstanding Outstanding balance balance Number of before TDR Number of before TDR loans Baht loans Baht Restructured during the year ended 31 December 1999 1 53,388,913 1 53,388,913 Detail of customer whose debt has been restructured during the year ended 31 December 1999 compared with the total customers, both in the consolidated and company financial statements, are as follows: Consolidated Company Outstanding Outstanding balance balance Number of before TDR Number of before TDR loans Baht loans Baht Restructured debt 1 53,388,913 1 53,388,913 Total customers 391,252 3,602,144,507 390,752 3,587,853,958 391,253 3,655,533,420 390,753 3,641,242,871 Details of the restructured debt during the year, classified into the restructuring method is as follows: Consolidated and Company Outstanding balance Fair value Book value Number before TDR of assets after TDR of loans Baht Baht Baht Restructuring method Modification of term of receivable 1 53,388,913 37,330,608 37,330,608 For the year ended 31 December 1999, the Company recognised losses from the TDR amounting to Baht 19 million in the consolidated and company financial statements. Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements 31 December 1999 and 1998 9 Inventories Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Supplies and tools 2,003,121 1,826,879 - - Component parts 92,145,647 91,280,145 70,148,777 69,993,131 Work in progress 5,946,706 3,318,897 - - Finished goods 764,096,955 875,083,134 748,776,845 851,197,246 864,192,429 971,509,055 818,925,622 921,190,377 Less: Allowance for obsolescence (24,056,158) (37,052,764) (23,100,000) (35,400,000) 840,136,271 934,456,291 795,825,622 885,790,377 Component parts in transit 1,969,773 230,979 - - 842,106,044 934,687,270 795,825,622 885,790,377 10 Other Current Assets Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Prepayments 9,943,943 11,609,454 7,674,887 11,609,454 Advance to employees 1,821,705 9,247,271 1,800,344 9,186,182 Deposits 4,757,746 11,793,836 4,711,746 11,747,836 Others 7,705,698 7,169,287 2,366,031 1,852,907 24,229,092 39,819,848 16,553,008 34,396,379 Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements 31 December 1999 and 1998 11 Investments in Subsidiaries Investments in subsidiaries in the company financial statements as at 31 December comprise the following companies: 1999 Company Amount of Amount in Country of Nature of Nature of Paid up capital Investment Cost method Equity method balance sheet incorporation business relationship (Baht) portion % (Baht) (Baht) (Baht) Singer Industries (Thailand) Limited Thai Manufacturing Holding 5,000,000 99.88 4,994,000 107,948,905 107,948,905 Singer (Broker) Limited Thai Life insurance broker Holding 200,000 99.70 199,400 24,767,650 24,767,650 Singer Trading (Thailand) Limited Thai Trading Holding 125,000 99.86 124,825 128,076 128,076 Sansui (Thailand) Limited Thai Trading Holding 50,000 50.86 25,430 - - S.T.L. Electronics Limited Thai Trading Holding 5,000,000 99.84 4,992,000 - - 10,335,655 132,844,631 132,844,631 Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements 31 December 1999 and 1998 11 Investments in Subsidiaries (Con't) 1998 Company Amount of Amount in Country of Nature of Nature of Paid up capital Investment Cost method Equity method balance sheet incorporation business relationship (Baht) portion % (Baht) (Baht) (Baht) Singer Industries (Thailand) Limited Thai Manufacturing Holding 5,000,000 99.88 4,994,000 114,673,145 114,673,145 Singer (Broker) Limited Thai Life insurance broker Holding 200,000 99.70 199,400 19,673,201 19,673,201 Singer Trading (Thailand) Limited Thai Trading Holding 125,000 99.86 124,825 138,811 138,811 Sansui (Thailand) Limited Thai Trading Holding 50,000 50.86 25,430 - - S.T.L. Electronics Limited Thai Trading Holding 5,000,000 99.84 4,992,000 - - 10,335,655 134,485,157 134,485,157 As at 31 December 1999, the negative investments in Sansui (Thailand) Limited and S.T.L. Electronics Limited are presented as liabilities arising from investments in subsidiaries amounting to Baht 44,770 and Baht 9,046,805 respectively (1998 : Baht 38,557 and Baht 1,004,175). Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements 31 December 1999 and 1998 11 Property, Plant and Equipment Consolidated Land & Leasehold Machinery & Vehicles & Construction buildings improvement equipment equipment in progress Total Baht Baht Baht Baht Baht Baht At 31 December 1998 Cost or valuation 727,944,022 73,744,625 13,278,760 109,081,616 40,000 924,089,023 Less: Accumulated depreciation (81,295,816) (30,367,703) (10,627,637) (83,247,612) - (205,538,768) Net book amount 646,648,206 43,376,922 2,651,123 25,834,004 40,000 718,550,255 For the year ended 31 December 1999 Opening net book amount 646,648,206 43,376,922 2,651,123 25,834,004 40,000 718,550,255 Additions 4,413,000 16,080,353 9,000 16,068,319 - 36,570,672 (more)