FINANCIAL STATEMENTS QUARTER 2/2000

AUDITOR'S REPORT ON REVIEW OF INTERIM FINANCIAL STATEMENTS To the Shareholders and the Board of Directors of Singer Thailand Public Company Limited I have reviewed the accompanying consolidated and company balance sheets of Singer Thailand Public Company Limited as at 30 June 2000, and the related consolidated and company statements of income for the three-month and six-month periods ended 30 June 2000 and the related consolidated and company statements of changes in shareholders' equity, retained earnings and cash flows for the six-month period ended 30 June 2000. These interim financial statements are the responsibility of the company's management. My responsibility is to issue a report on these financial statements based on my review. The consolidated and company balance sheets as at 31 December 1999, presented for comparative purpose, are components of the consolidated and company financial statements for the year ended 31 December 1999 which were audited by another auditor from the same firm as myself whose report dated 11 February 2000 expressed an unqualified opinion on those statements. The consolidated and company statements of income for the three-month and six-month periods ended 30 June 1999 and the related consolidated and company statements of changes in shareholders' equity, retained earnings and cash flows for the six-month period ended 30 June 1999, presented for comparative purpose, are components of the interim consolidated and company financial statements for the three-month and six-month periods ended 30 June 1999 which were reviewed by another independent auditor from the same firm as myself whose report dated 23 July 1999 concluded that he was not aware of any material modifications that should be made to those statements for them to be in conformity with generally accepted accounting principles. I conducted my review in accordance with the auditing standard applicable to review engagements. This standard requires that I plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. I have not performed an audit, and, accordingly, I do not express an audit opinion. Based on my review, nothing has come to my attention that causes me to believe that the consolidated and company financial statements as of 30 June 2000 and for the three-month and six-month periods ended 30 June 2000 referred to above are not presented fairly, in all material respects, in accordance with generally accepted accounting principles. SOMSRI DHANYACHEEVEE Certified Public Accountant (Thailand) No. 1905 PricewaterhouseCoopers ABAS Limited Bangkok 28 July 2000 Singer Thailand Public Company Limited Balance Sheets As at 30 June 2000 and 31 December 1999 Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Unaudited Audited Unaudited Audited Notes Baht Baht Baht Baht ASSETS Current Assets Cash on hand and at banks 53,184,330 175,489,413 52,093,083 170,200,041 Short-term investment 99,627 - 99,627 - Current portion of debt security 1,139,914 1,139,914 - - Trade and installment accounts receivable, net 4 2,662,747,946 2,668,410,935 2,657,093,441 2,655,990,386 Loans and amounts due from related parties 11 375,048 203,061 103,600,695 104,656,003 Inventories 763,227,929 842,106,044 723,222,137 795,825,622 Other current assets 24,319,756 24,229,092 17,617,831 16,553,008 Total Current Assets 3,505,094,550 3,711,578,459 3,553,726,814 3,743,225,060 Non-Current Assets Receivable from and loans to employees 1,585,708 1,970,618 400,766 746,975 Investments in subsidiaries 11 - - 133,187,951 132,844,631 Long-term investment 800,000 800,000 800,000 800,000 Property, plant and equipment, net 6 700,034,561 708,972,667 549,442,134 556,945,389 Prepaid rent 74,795,597 78,803,060 74,795,597 78,803,060 Total Non-Current Assets 777,215,866 790,546,345 758,626,448 770,140,055 Total Assets 4,282,310,416 4,502,124,804 4,312,353,262 4,513,365,115 Director Director The notes to the interim consolidated and company financial statements on pages 9 to 23 are an integral part of these interim financial statements. Singer Thailand Public Company Limited Balance Sheets As at 30 June 2000 and 31 December 1999 Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Unaudited Audited Unaudited Audited Notes Baht Baht Baht Baht LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Bank overdrafts and loans from financial institutions 181,377,626 282,562,582 181,377,626 276,894,337 Trade accounts payable - other companies 116,943,817 352,024,605 104,094,609 327,713,040 - related parties 11 6,423,309 4,335,509 44,721,941 44,506,754 Current portion of long-term borrowings 7 210,606,060 313,017,020 210,606,060 313,017,020 Current portion of unsecured debentures 8 282,609,000 - 282,609,000 - Amounts due to related parties 11 26,822,205 4,098,958 26,076,593 3,246,608 Dividends payable 13,625,359 13,625,359 13,625,359 13,625,359 Accrued income tax 1,575,852 2,458,153 - - Accrued liabilities 175,136,448 123,067,260 172,964,367 120,716,856 Other current liabilities 16,624,014 22,361,172 16,418,366 22,274,239 Total Current Liabilities 1,031,743,690 1,117,550,618 1,052,493,921 1,121,994,213 Non-Current Liabilities Liabilities arising from investments in subsidiaries 11 - - 13,172,080 9,091,575 Long-term borrowings 7 289,393,940 550,000,000 289,393,940 550,000,000 Unsecured debentures 8 549,810,000 500,000,000 549,810,000 500,000,000 Provision for retirement cost 51,143,754 48,182,152 50,000,000 46,500,000 Employee security deposits 132,988,507 133,003,969 130,252,796 132,391,262 Provident funds 175,562,268 174,102,870 175,562,268 174,102,870 Total Non-Current Liabilities 1,198,898,469 1,405,288,991 1,208,191,084 1,412,085,707 Total Liabilities 2,230,642,159 2,522,839,609 2,260,685,005 2,534,079,920 Shareholders' Equity Share capital Registered, issued and fully paid-up 27,000,000 ordinary shares of Baht 10 each 270,000,000 270,000,000 270,000,000 270,000,000 Premium on share capital 225,000,000 225,000,000 225,000,000 225,000,000 Land revaluation reserve 240,926,403 240,926,403 240,926,403 240,926,403 Retained earnings: Appropriated - legal reserve 27,000,000 27,000,000 27,000,000 27,000,000 Unappropriated 1,288,741,854 1,216,358,792 1,288,741,854 1,216,358,792 Total Shareholders' Equity 2,051,668,257 1,979,285,195 2,051,668,257 1,979,285,195 Total Liabilities and Shareholders' Equity 4,282,310,416 4,502,124,804 4,312,353,262 4,513,365,115 The notes to the interim consolidated and company financial statements on pages 9 to 23 are an integral part of these interim financial statements. Singer Thailand Public Company Limited Statements of Income (Unaudited) For the three-month period ended 30 June 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Revenues Sales 865,533,393 989,814,302 862,201,208 980,440,228 Interest from installment sales 140,347,743 124,282,014 140,347,743 124,282,014 Other income 2,093,468 6,755,122 2,118,519 8,535,861 Total Revenues 1,007,974,604 1,120,851,438 1,004,667,470 1,113,258,103 Expenses Cost of sales 540,327,136 642,940,714 542,848,342 638,290,062 Selling and administrative expenses 382,571,040 409,513,162 376,959,236 404,568,747 Directors' remuneration 100,000 100,000 100,000 100,000 Interest and other financial costs 48,699,366 44,726,363 47,705,396 44,246,198 Total Expenses 971,697,542 1,097,280,239 967,612,974 1,087,205,007 Operating profit 36,277,062 23,571,199 37,054,496 26,053,096 Share of (loss) from subsidiaries - - (1,831,664) (3,558,472) Profit before tax 36,277,062 23,571,199 35,222,832 22,494,624 Income tax 1,054,230 1,076,575 - - Net profit for the period 35,222,832 22,494,624 35,222,832 22,494,624 Basic earnings per share Net profit for the period 1.30 0.83 1.30 0.83 The notes to the interim consolidated and company financial statements on pages 9 to 23 are an integral part of these interim financial statements. Singer Thailand Public Company Limited Statements of Income (Unaudited) For the six-month period ended 30 June 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Revenues Sales 1,734,740,055 1,793,742,406 1,726,413,989 1,776,050,009 Interest from installment sales 277,568,270 267,032,785 277,568,270 267,032,785 Other income 6,115,050 25,439,026 3,966,715 25,686,019 Total Revenues 2,018,423,375 2,086,214,217 2,007,948,974 2,068,768,813 Expenses Cost of sales 1,073,499,481 1,153,783,549 1,078,506,305 1,145,982,738 Selling and administrative expenses 767,013,396 770,257,008 752,730,876 758,857,432 Directors' remuneration 200,000 200,000 200,000 200,000 Interest and other financial costs 103,940,465 115,756,122 100,387,473 111,892,120 Total Expenses 1,944,653,342 2,039,996,679 1,931,824,654 2,016,932,290 Operating profit 73,770,033 46,217,538 76,124,320 51,836,523 Share of (loss) from subsidiaries - - (3,741,258) (7,230,697) Profit before tax 73,770,033 46,217,538 72,383,062 44,605,826 Income tax 1,386,971 1,611,712 - - Net profit for the period 72,383,062 44,605,826 72,383,062 44,605,826 Basic earnings per share Net profit for the period 2.68 1.65 2.68 1.65 The notes to the interim consolidated and company financial statements on pages 9 to 23 are an integral part of these interim financial statements. Singer Thailand Public Company Limited Statements of Changes in Shareholders' Equity (Unaudited) For the six-month period ended 30 June 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Share Capital Beginning balance 270,000,000 270,000,000 270,000,000 270,000,000 Increase during the period - - - - Ending balance 270,000,000 270,000,000 270,000,000 270,000,000 Premium on Share Capital Beginning balance 225,000,000 225,000,000 225,000,000 225,000,000 Increase during the period - - - - Ending balance 225,000,000 225,000,000 225,000,000 225,000,000 Land Revaluation Reserve Beginning balance 240,926,403 241,546,403 240,926,403 241,546,403 Increase during the period - (620,000) - (620,000) Ending balance 240,926,403 240,926,403 240,926,403 240,926,403 Retained Earnings Appropriated retained earnings Legal reserve Beginning balance 27,000,000 27,000,000 27,000,000 27,000,000 Increase during the period - - - - Ending balance 27,000,000 27,000,000 27,000,000 27,000,000 Unappropriated retained earnings Beginning balance 1,216,358,792 1,191,854,266 1,216,358,792 1,191,854,266 Increase during the period 72,383,062 44,605,826 72,383,062 44,605,826 Ending balance 1,288,741,854 1,236,460,092 1,288,741,854 1,236,460,092 Total 2,051,668,257 1,999,386,495 2,051,668,257 1,999,386,495 The notes to the interim consolidated and company financial statements on pages 9 to 23 are an integral part of these interim financial statements. Singer Thailand Public Company Limited Statements of Retained Earnings (Unaudited) For the six-month period ended 30 June 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Unappropriated retained earnings: Beginning balance 1,216,358,792 1,191,854,266 1,216,358,792 1,191,854,266 Net profit for the period 72,383,062 44,605,826 72,383,062 44,605,826 Unappropriated retained earnings at end of the period 1,288,741,854 1,236,460,092 1,288,741,854 1,236,460,092 Appropriated retained earnings: Legal reserve 27,000,000 27,000,000 27,000,000 27,000,000 Appropriated retained earnings at end of the period 27,000,000 27,000,000 27,000,000 27,000,000 Retained earnings at end of the period 1,315,741,854 1,263,460,092 1,315,741,854 1,263,460,092 The notes to the interim consolidated and company financial statements on pages 9 to 23 are an integral part of these interim financial statements. Singer Thailand Public Company Limited Statements of Cash Flows (Unaudited) For the six-month period ended 30 June 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Cash flows from operating activities 9 25,051,289 244,467,593 25,707,674 242,659,229 Cash flows from investing activities Purchases of property, plant and equipment (13,187,415) (21,867,569) (13,152,215) (21,855,419) Proceeds from disposal of property, plant and equipment 1,267,000 1,023,150 1,267,000 1,023,150 Payment of prepaid rent (5,382,200) (3,425,800) (5,382,200) (3,425,800) Loan payments received from subsidiaries - - 3,000,000 5,000,000 Loans made to subsidiaries - - (3,000,000) (2,500,000) Decrease in receivable from and loans to employees 384,910 2,049,464 346,209 2,080,917 Net cash payments in investing activities (16,917,705) (22,220,755) (16,921,206) (19,677,152) Cash flows from financing activities (Decrease) increase in bank overdrafts and loans from financial institutions (101,184,956) 104,777,092 (95,516,711) 104,429,923 Proceeds from unsecured debentures 900,000,000 - 900,000,000 - Proceeds from long-term loans 200,000,000 - 200,000,000 - Payment of unsecured debentures (567,581,000) - (567,581,000) - Payment of long-term borrowings (563,017,020) (200,000,000) (563,017,020) (200,000,000) Increase (decrease) in employee security deposits and provident funds 1,443,936 (21,954,782) (679,068) (23,181,886) Net cash payments in financing activities (130,339,040) (117,177,690) (126,793,799) (118,751,963) Net increase in cash and cash equivalents (122,205,456) 105,069,148 (118,007,331) 104,230,114 Cash and cash equivalents at beginning of the period 175,489,413 130,192,133 170,200,041 128,811,934 Cash and cash equivalents at end of the period 10 53,283,957 235,261,281 52,192,710 233,042,048 Supplementary information for cash flows: Interest paid 103,518,249 122,298,773 99,955,258 116,001,179 Tax paid 2,228,212 119,617 139,731 118,527 The notes to the interim consolidated and company financial statements on pages 9 to 23 are an integral part of these interim financial statements. Singer Thailand Public Company Limited Notes to the Interim Consolidated and Company Financial Statements (Unaudited) For the six-month period ended 30 June 2000 and 1999 1 Accounting Policies The interim consolidated and company financial statements are prepared in accordance with the accounting principles generally accepted in Thailand. However, the primary statements i.e. balance sheets, statements of income, changes in shareholders' equity, retained earnings and cash flows are presented in the full format as prescribed by the Ministerial Regulation No. 7 (B.E. 2539) in accordance with the Securities and Exchange Commission's and the Stock Exchange of Thailand's requirements, rather than in the condensed format as required by Thai Accounting Standard No. 41, "Interim Financial Reporting". The accounting policies used in the preparation of the interim financial statements are consistent with those used in the annual financial statements for the year ended 31 December 1999. The Group has implemented the following new Thai Accounting Standards, effective 1 January 2000, in these interim financial statements: TAS 44 - Consolidated Financial Statements and Accounting for Investment in Subsidiaries TAS 45 - Accounting for Investment in Associates TAS 47 - Related Party Disclosures The comparatives, where appropriate, have been adjusted or extended to take into account the requirements of those newly effective standards. Costs that incur unevenly during the financial year are anticipated or deferred in the interim report only if it would be also appropriate to anticipate or defer such costs at the end of the financial year. These interim financial statements should be read in conjunction with the financial statements for the year ended 31 December 1999. 2 Segment Information The company trades in a single business segment and in a single geographical area i.e., Thailand. Accordingly no segment information has been presented. Singer Thailand Public Company Limited Notes to the Interim Consolidated and Company Financial Statements (Unaudited) For the six-month period ended 30 June 2000 and 1999 3 Earnings Per Share Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the period (2000 : 27,000,000 shares; 1999 : 27,000,000 shares). 4 Trade and Installment Accounts Receivable, net Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Baht Baht Baht Baht Trade and installment accounts receivable 3,619,199,818 3,655,533,420 3,611,615,313 3,641,242,871 Less: Unearned carrying charges (519,021,872) (532,052,485) (519,021,872) (532,052,485) 3,100,177,946 3,123,480,935 3,092,593,441 3,109,190,386 Less: Allowance for doubtful accounts (437,430,000) (455,070,000) (435,500,000) (453,200,000) Trade and installment accounts receivable, net 2,662,747,946 2,668,410,935 2,657,093,441 2,655,990,386 Outstanding trade and installment accounts receivable over 3 months can be analysed as follows: Trade accounts receivable - installment sales and credit sales Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Baht Baht Baht Baht 3-6 months 19,771,029 22,076,139 19,565,071 21,392,784 6-12 months 24,841,089 40,064,085 24,632,662 39,126,433 Over 12 months 72,474,378 80,427,665 70,769,186 79,590,838 (more)