13 November 2000

CONSOLIDATED FINANCIAL STATEMENTS QUARTER-3

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 September 2000, and the related consolidated and company statements of income for the three-month and nine-month periods ended 30 September 2000 and the related consolidated and company statements of changes in shareholders' equity, retained earnings and cash flows for the nine- month period ended 30 September 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. 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 September 2000 and for the three-month and nine-month periods ended 30 September 2000 referred to above are not presented fairly, in all material respects, in accordance with generally accepted accounting principles. 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 nine-month periods ended 30 September 1999 and the related consolidated and company statements of changes in shareholders' equity, retained earnings and cash flows for the nine- month period ended 30 September 1999, presented for comparative purpose, are components of the interim consolidated and company financial statements for the three-month and nine-month periods ended 30 September 1999 which were reviewed by another independent auditor from the same firm as myself whose report dated 29 October 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. SOMSRI DHANYACHEEVEE Certified Public Accountant (Thailand) No. 1905 PricewaterhouseCoopers ABAS Limited Bangkok 27 October 2000 Singer Thailand Public Company Limited Balance Sheets As at 30 September 2000 and 31 December 1999 Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Unaudited Audited Unaudited Audited Notes Baht Baht Baht Baht ASSETS Current Assets Cash on hand and at banks 72,739,450 175,489,413 70,279,717 170,200,041 Short-term investment 110,100,597 - 110,100,597 - Current portion of debt security 1,139,914 1,139,914 - - Trade and installment accounts receivable, net 4 2,549,870,347 2,668,410,935 2,547,523,293 2,655,990,386 Loans and amounts due from related parties 12 9,402,128 203,061 97,618,898 104,656,003 Inventories 753,241,661 842,106,044 720,333,590 795,825,622 Other current assets 19,349,906 24,229,092 15,054,290 16,553,008 Total Current Assets 3,515,844,003 3,711,578,459 3,560,910,385 3,743,225,060 Non-Current Assets Receivable from and loans to employees 1,706,612 1,970,618 333,266 746,975 Investments in subsidiaries 12 - - 133,429,487 132,844,631 Long-term investment 800,000 800,000 800,000 800,000 Property, plant and equipment, net 6 696,811,720 708,972,667 546,985,706 556,945,389 Prepaid rent 73,192,229 78,803,060 73,192,229 78,803,060 Total Non-Current Assets 772,510,561 790,546,345 754,740,688 770,140,055 Total Assets 4,288,354,564 4,502,124,804 4,315,651,073 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 September 2000 and 31 December 1999 Consolidated Company 30 September 31 December 30 September 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 39,611,642 282,562,582 39,611,642 276,894,337 Trade accounts payable - other companies 121,396,013 352,024,605 108,991,742 327,713,040 - related parties 12 2,302,319 4,335,509 37,970,556 44,506,754 Current portion of long-term borrowings 7 295,500,000 313,017,020 295,500,000 313,017,020 Current portion of unsecured debentures 8 288,135,000 - 288,135,000 - Amounts due to related parties 12 37,679,022 4,098,958 36,952,306 3,246,608 Dividends payable 18,643,482 13,625,359 18,643,482 13,625,359 Accrued income tax 841,971 2,458,153 - - Accrued liabilities 189,390,868 123,067,260 186,351,787 120,716,856 Other current liabilities 16,634,847 22,361,172 16,482,647 22,274,239 Total Current Liabilities 1,010,135,164 1,117,550,618 1,028,639,162 1,121,994,213 Non-Current Liabilities Liabilities arising from investments in subsidiaries 12 - - 13,302,637 9,091,575 Long-term borrowings 7 392,375,000 550,000,000 392,375,000 550,000,000 Unsecured debentures 8 475,767,000 500,000,000 475,767,000 500,000,000 Provision for retirement cost 51,284,355 48,182,152 50,000,000 46,500,000 Employee security deposits 133,070,000 133,003,969 129,958,704 132,391,262 Provident funds 172,637,933 174,102,870 172,523,458 174,102,870 Total Non-Current Liabilities 1,225,134,288 1,405,288,991 1,233,926,799 1,412,085,707 Total Liabilities 2,235,269,452 2,522,839,609 2,262,565,961 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 1,290,158,709 1,216,358,792 1,290,158,709 1,216,358,792 Total Shareholders' Equity 2,053,085,112 1,979,285,195 2,053,085,112 1,979,285,195 Total Liabilities and Shareholders' Equity 4,288,354,564 4,502,124,804 4,315,651,073 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 September 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Revenues Sales 749,338,397 805,996,738 737,868,582 800,733,513 Interest from installment sales 137,551,359 127,535,200 137,551,359 127,535,200 Other income 915,959 1,635,431 779,859 1,273,855 Total Revenues 887,805,715 935,167,369 876,199,800 929,542,568 Expenses Cost of sales 449,765,764 515,684,907 444,296,519 515,800,699 Selling and administrative expenses 374,481,552 363,854,354 370,722,432 358,437,719 Directors' remuneration 212,500 100,000 212,500 100,000 Interest and other financial costs 34,444,675 51,434,412 32,661,794 48,829,318 Total Expenses 858,904,491 931,073,673 847,893,245 923,167,736 Operating profit 28,901,224 4,093,696 28,306,555 6,374,832 Share of profit (loss) from subsidiaries - - 110,300 (3,107,264) Profit before tax 28,901,224 4,093,696 28,416,855 3,267,568 Income tax 484,369 826,128 - - Net profit for the period 28,416,855 3,267,568 28,416,855 3,267,568 Basic earnings per share Net profit for the period 1.05 0.12 1.05 0.12 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 nine-month period ended 30 September 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Revenues Sales 2,484,078,453 2,599,739,144 2,464,282,571 2,576,783,522 Interest from installment sales 415,119,629 394,567,985 415,119,629 394,567,985 Other income 7,365,077 27,967,155 4,746,574 26,959,874 Total Revenues 2,906,563,159 3,022,274,284 2,884,148,774 2,998,311,381 Expenses Cost of sales 1,523,265,245 1,669,468,456 1,522,802,824 1,661,783,437 Selling and administrative expenses 1,141,829,017 1,135,004,060 1,123,453,308 1,117,295,151 Directors' remuneration 412,500 300,000 412,500 300,000 Interest and other financial costs 138,385,140 167,190,534 133,049,267 160,721,438 Total Expenses 2,803,891,902 2,971,963,050 2,779,717,899 2,940,100,026 Operating profit 102,671,257 50,311,234 104,430,875 58,211,355 Share of (loss) from subsidiaries - - (3,630,958) (10,337,961) Profit before tax 102,671,257 50,311,234 100,799,917 47,873,394 Income tax 1,871,340 2,437,840 - - Net profit for the period 100,799,917 47,873,394 100,799,917 47,873,394 Basic earnings per share Net profit for the period 3.73 1.77 3.73 1.77 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 nine-month period ended 30 September 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Note 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 Decrease 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 100,799,917 47,873,394 100,799,917 47,873,394 Decrease during the period 9 (27,000,000) (27,000,000) (27,000,000) (27,000,000) Ending balance 1,290,158,709 1,212,727,660 1,290,158,709 1,212,727,660 Total 2,053,085,112 1,975,654,063 2,053,085,112 1,975,654,063 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 nine-month period ended 30 September 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Note 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 100,799,917 47,873,394 100,799,917 47,873,394 Less: Dividend 9 (27,000,000) (27,000,000) (27,000,000) (27,000,000) Unappropriated retained earnings at end of the period 1,290,158,709 1,212,727,660 1,290,158,709 1,212,727,660 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 1,317,158,709 1,239,727,660 1,317,158,709 1,239,727,660 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 nine-month period ended 30 September 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht Cash flows from operating activities 10 211,311,325 461,865,305 205,141,550 459,770,101 Cash flows from investing activities Purchases of property, plant and equipment (20,586,482) (28,888,462) (20,548,867) (28,876,312) Proceeds from disposal of property, plant and equipment 2,220,404 1,587,175 1,977,320 1,587,175 Payment of prepaid rent (8,303,544) (7,224,144) (8,303,544) (7,224,144) Loan payments received from subsidiaries - - (8,000,000) 2,500,000 Loans made to subsidiaries - - 14,000,000 - Decrease in receivable from and loans to employees 264,006 2,305,097 413,709 2,275,266 Net cash payments in investing activities (26,405,616) (32,220,334) (20,461,382) (29,738,015) Cash flows from financing activities (Decrease) increase in bank overdrafts and loans from financial institutions (242,950,940) 29,454,350 (237,282,695) 29,668,035 Proceeds from unsecured debentures 900,000,000 - 900,000,000 - Proceeds from long-term loans 400,000,000 - 400,000,000 - Payment of unsecured debentures (636,098,000) - (636,098,000) - Payment of long-term borrowings (575,142,020) (361,528,970) (575,142,020) (361,528,970) (Decrease) in employee security deposits and provident funds (1,398,905) (38,500,618) (4,011,970) (38,713,881) Dividend Paid (21,965,210) (24,107,417) (21,965,210) (24,107,417) Net cash payments in financing activities (177,555,075) (394,682,655) (174,499,895) (394,682,233) Net increase in cash and cash equivalents 7,350,634 34,962,316 10,180,273 35,349,853 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 11 182,840,047 165,154,449 180,380,314 164,161,787 Supplementary information for cash flows: Interest paid 136,112,149 156,739,475 130,224,056 147,801,586 Tax paid 3,278,534 204,007 185,042 202,730 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 nine-month period ended 30 September 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, and are presented in the condensed format as required by Thai Accounting Standard No. 41, "Interim Financial Reporting" with additional disclosures, in case of the primary financial statements (i.e. balance sheets, statements of income, changes in shareholders' equity, retained earnings and cash flows), based on the format prescribed by the Ministerial Regulation No. 7 (B.E. 2539) in accordance with the requirements of the Securities and Exchange Commission and the Stock Exchange of Thailand. 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 are incurred unevenly during the financial year are recognised as expense or deferred in the interim report only if it would be also appropriate to recognise or defer such costs at the end of the financial year. Income tax expense is recognised based on the best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used is 30%. These interim financial statements should be read in conjunction with the 1999 annual financial statements. 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 nine-month period ended 30 September 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 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht Baht Baht Baht Trade and installment accounts receivable 3,477,914,120 3,655,533,420 3,473,677,066 3,641,242,871 Less: Unearned carrying charges (484,004,860) (532,052,485) (484,004,860) (532,052,485) 2,993,909,260 3,123,480,935 2,989,672,206 3,109,190,386 Less: Allowance for doubtful accounts (444,038,913) (455,070,000) (442,148,913) (453,200,000) Trade and installment accounts receivable, net 2,549,870,347 2,668,410,935 2,547,523,293 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 (more)