NSOLIDATED FINANCIAL STATEMENTS QUARTER-3

30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht Baht Baht Baht Over 3-6 months 19,810,432 22,076,139 19,537,189 21,392,784 Over 6-12 months 23,257,865 40,064,085 22,814,469 39,126,433 Over 12 months 66,188,296 80,427,665 64,778,585 79,590,838 109,256,593 142,567,889 107,130,243 140,110,055 Restructured debt (Note 5) 49,748,913 53,388,913 49,748,913 53,388,913 159,005,506 195,956,802 156,879,156 193,498,968 Less: Allowance for doubtful accounts (142,138,913) (153,670,000) (140,248,913) (151,800,000) 16,866,593 42,286,802 16,630,243 41,698,968 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 4 Trade and Installment Accounts Receivable, net (Con't) Trade accounts receivable - other Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht Baht Baht Baht Over 3-6 months 15,247,918 12,579,036 15,247,918 12,579,036 Over 6-12 months 33,066,742 38,315,855 33,066,742 38,315,855 Over 12 months 75,559,481 78,733,177 75,559,481 78,733,177 123,874,141 129,628,068 123,874,141 129,628,068 Less: Allowance for doubtful accounts (50,800,000) (58,900,000) (50,800,000) (58,900,000) 73,074,141 70,728,068 73,074,141 70,728,068 Employees receivable Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht Baht Baht Baht Employees receivable 313,751,290 303,169,122 313,751,290 303,169,122 Less: Allowance for doubtful accounts (251,100,000) (242,500,000) (251,100,000) (242,500,000) 62,651,290 60,669,122 62,651,290 60,669,122 Employees receivable are the amount of damage caused by employees' faulty in their responsibilities. The Company has already made allowance for doubtful accounts 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 Interim Consolidated and Company Financial Statements (Unaudited) For the nine-month period ended 30 September 2000 and 1999 5 Troubled Debt Restructuring (TDR) The Company has an outstanding receivable which has been restructured as follows: 30 September 2000 Consolidated Company Outstanding Outstanding balance balance Number of before TDR Number of before TDR loans Baht loans Baht Debt Restructurings 1 49,748,913 1 49,748,913 31 December 1999 Consolidated Company Outstanding Outstanding balance balance Number of before TDR Number of before TDR loans Baht loans Baht Debt Restructurings 1 53,388,913 1 53,388,913 Details of customer are compared with the total customers, both in the consolidated and company financial statements, are as follows: 30 September 2000 Consolidated Company Outstanding Outstanding balance balance Number of before TDR Number of before TDR loans Baht loans Baht Restructured debt 1 49,748,913 1 49,748,913 Total customers 383,474 3,428,165,207 383,217 3,423,928,153 383,475 3,477,914,120 383,218 3,473,677,066 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 5. Troubled Debt Restructuring ( TDR ) ( Con't ) 31 December 1999 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 are classified into the restructuring method is as follows: 30 September 2000 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 49,748,913 33,546,848 33,546,848 31 December 1999 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 nine-month period ended 30 September 2000, the Company decreased provision for losses on the TDR amounting to Baht 2.7 million in the consolidated and company financial statements due to the Company collected some portion of the debt. 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 Interim Consolidated and Company Financial Statements (Unaudited) For the nine-month period ended 30 September 2000 and 1999 6 Property, Plant and Equipment For the nine-month period ended 30 September 2000 Consolidated Company Baht Baht Opening net book amount 708,972,667 556,945,389 Additions 20,586,482 20,548,867 Disposals (22,096) (78) Depreciation (32,725,333) (30,508,472) Closing net book amount 696,811,720 546,985,706 7 Long-Term Borrowings Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht Baht Baht Baht Current 295,500,000 313,017,020 295,500,000 313,017,020 Non-current 392,375,000 550,000,000 392,375,000 550,000,000 Total 687,875,000 863,017,020 687,875,000 863,017,020 The movements in the borrowings can be analysed as follows: For the nine-month period ended 30 September 2000 Consolidated Company Baht Baht Opening amount 863,017,020 863,017,020 Addition of long-term borrowings 400,000,000 400,000,000 Repayment of long-term borrowings (575,142,020) (575,142,020) Closing amount 687,875,000 687,875,000 Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht Baht Baht Baht Loans denominated in Thai Baht 687,875,000 480,000,000 687,875,000 480,000,000 Loans denominated in foreign currency - 383,017,020 - 383,017,020 Total 687,875,000 863,017,020 687,875,000 863,017,020 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 7 Long-Term Borrowings (Con't) Long-term loans in Thai Baht as at 30 September 2000 include the following: -Loans from financial institutions in Thailand amounted to Baht 300 million (31 December 1999: Baht 480 million). The loans bear interest at rates ranging from 8.25 % to 8.75 % per annum (31 December 1999: 8 % to 11 % per annum). The loans will be due within 1 to 3 years. -Syndicated loans from financial institutions in Thailand for which Thai Farmer Bank Public Company Limited acted as the lead manager and Bangkok Bank Public Company Limited acted as the facility agent for the Company amounts to Baht 400 million. The Company received the loans of Baht 200 million each in May and August 2000. The loans bear interest at MLR per annum. The loan and interest will be due for redemption every month commencing September 2000 until May 2003. In this period, the Company has repaid the loan principal amounting to Baht 12.13 million. Long-term loans denominated in foreign currency as at 31 December 1999 include the following: -Syndicated loans from overseas financial institutions for which Schroder International Merchant Bankers Limited acted as the facility agent for the Company amounted to US$ 10 million or Baht 254 million. Loan interest was at LIBOR per annum. The Company repaid the loan in June 2000. - Loan from a branch of a foreign financial institution amounted to US$ 3.3 million. Loan interest was at SIBOR per annum. The loan was repaid in US$ by three consecutive semi-annual equal installments within one year. The repayments were due within 2000. Hedging In order to manage the risks arising from fluctuations in currency exchange rates and interest rates, the Company makes use of the following derivative financial instruments: Interest rate and currency swap In December 1996, the Company entered into interest rate and currency swap contracts to swap both interest rate and principal of a three-year offshore loan totalling US$ 40 million, bearing interest at LIBOR, in exchange with the principal of Baht 1,016 million, bearing interest at 10.35% per annum for the principal amount of Baht 254 million and 10.57% per annum for the principal amount of Baht 762 million. Forward foreign exchange contracts As at 31 December 1999, the Company has forward contracts to hedge long-term loans of US$ 3.33 million at an average forward rate of US$ 1 per Baht 38.65. 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 8 Unsecured Debentures Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht Baht Baht Baht Current 288,135,000 - 288,135,000 - Non-current 475,767,000 500,000,000 475,767,000 500,000,000 Total 763,902,000 500,000,000 763,902,000 500,000,000 The movements in the unsecured debentures can be analysed as follows: For the nine-month period ended 30 September 2000 Consolidated Company Baht Baht Opening amount 500,000,000 500,000,000 Unsecured debentures issued 900,000,000 900,000,000 Repayment of unsecured debentures (636,098,000) (636,098,000) Closing amount 763,902,000 763,902,000 On 8 May 1998, the Company issued three-year unsecured debentures totalling Baht 500,000,000 comprising 500,000 shares of Baht 1,000 each bearing interest rate of 12.35% per annum. The debentures were approved by the Securities and Exchange Commission in May 1998 and were due for redemption on 8 May 2000. The unsecured debentures are not classified to current liabilities in the consolidated and company balance sheets as at 31 December 1999 because the debentures will be refinanced by the new unsecured debentures. On 10 February 2000, the Company issued the three-year unsecured debentures totalling Baht 900,000,000 comprising 900,000 shares of Baht 1,000 each bearing interest rate of 7.75% per annum. The debentures will be due for redemption every three-month period until the last redemption on 10 February 2003. Proceeds from the issue of these debentures will be refinanced to a part of current portions of the long-term borrowings and debentures which will be due in 2000. Underwriting fee of Baht 10.35 million is charged to the statements of income for the nine-month period ended 30 September 2000. 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 9 Dividend On 11 August 2000, the Board of Director approved an interim dividend of Baht 1 per share, totalling Baht 27,000,000 to be paid on 10 September 2000 to the shareholders whose name were registered on 25 August 2000. 10 Cash Flows from Operating Activities Reconciliation of net profit to cash flows from operating activities: For the nine-month period ended 30 September Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Profit from ordinary activities 100,799,917 47,873,394 100,799,917 47,873,394 Adjusted by: (Gain) on exchange rate (891,190) (2,535,071) (653,273) (2,535,071) Depreciation 32,725,333 32,206,076 30,508,472 29,997,903 Amortisation of prepaid rent 13,914,375 17,768,249 13,914,375 17,768,249 (Decrease) increase in allowance for doubtful accounts (11,031,087) 22,517,800 (11,051,087) 20,799,000 (Gain) on disposal of fixed assets (2,198,308) (941,857) (1,977,242) (941,857) Increase (decrease) in allowance for inventory obsolescence 5,442,336 (11,817,323) 4,850,000 (11,200,000) (Decrease) in dividends payable - (24,317,729) - (24,317,729) Share of loss from subsidiaries - - 3,630,958 10,337,961 Decrease in inventories 83,422,046 108,841,891 70,642,032 98,692,810 Decrease in debtors and other current assets 125,251,794 277,809,441 122,054,003 271,144,988 (Decrease) in creditors and other current liabilities (134,507,709) (6,517,323) (127,576,605) 2,150,453 (Decrease) increase in current tax liabilities (1,616,182) 977,757 - - Cash generated from operations 211,311,325 461,865,305 205,141,550 459,770,101 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 11 Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, at banks and loans to financial institutions for periods not exceeding three months as follows: Consolidated Company 30 September 30 September 30 September 30 September 2000 1999 2000 1999 Baht Baht Baht Baht Cash on hand and at banks 72,739,450 115,154,449 70,279,717 114,161,787 Short-term investments 110,100,597 50,000,000 110,100,597 50,000,000 182,840,047 165,154,449 180,380,314 164,161,787 12 Related Party Transactions The following transactions were carried out with related parties: i) Sales of goods and other incomes For the nine-month period ended 30 September Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Sales of goods Subsidiary - S.T.L. Electronics Limited - - 9,624,759 8,004,887 Other incomes Interest income: Subsidiaries - Singer Industries (Thailand) Limited - - 5,371,875 5,671,918 - S.T.L. Electronics Limited - - 2,079,727 2,778,877 Management fee income: Subsidiary - Singer (Broker) Limited - - 334,068 404,697 - - 7,785,670 8,855,492 Sales to subsidiaries are based on the transfer price which is determined at cost plus gross margin. Management fee income is calculated at 5.5 % of total brokerage income of Singer (Broker) Limited. 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 12 Related Party Transactions (Con't) ii) Purchases of goods and other expenses For thenine-month period ended 30 September Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Purchases of goods Subsidiary - Singer Industries - - 129,137,213 127,616,411 (Thailand) Limited Related parties - Singer Brazil Limited 3,916,414 2,659,718 3,916,414 2,659,719 - Singer Nikko Company Limited 5,917,505 14,290,288 1,576,332 1,021,876 - Singer (Shanghai) Sewing Machine Company Limited 14,236,880 12,981,524 530,005 671,940 - P.T. Singer Industries (Indonesia) Limited 13,506,968 7,706,172 - - - Singer Industrial Sewing Product Company Limited 1,070,732 - 1,070,732 - - Singer Industries (Taiwan) Limited 2,147,088 4,011,332 2,147,088 1,211,955 - Singer Export Limited 1,874,321 7,537,013 1,874,321 3,136,960 - Singer India Limited 4,603,745 94,201 15,885 5,098 - Others 1,828,614 942,598 1,828,614 942,599 49,102,267 50,222,846 142,096,604 137,266,558 For the nine-month period ended 30 September Consolidated Company 2000 1999 2000 1999 Baht Baht Baht Baht Other expenses Interest expense: Subsidiary - Singer (Broker) Limited - - 2,137,552 1,216,796 Trademark license fee: Related party - The Singer Company B.V. 2,879,402 2,971,352 2,879,402 2,971,352 Offshore service fee: Related party - The Singer Company B.V. 28,794,022 - 28,794,022 - Royalty fee: Related party - The Singer Company B.V. 2,528,696 2,327,255 - - 34,202,120 5,298,607 33,810,976 4,188,148 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 12 Related Party Transactions (Con't) ii) Purchases of goods and other expenses (Con't) Purchase from subsidiaries is based on the transfer price which is determined at cost plus gross margin. Purchase from related companies is based on the fair price which would be charged to an independent third party. Interest expense on outstanding balance each month due to Singer (Broker) Limited bear interest at the rate of 9.5 % per annum (1999 : 9.5 % per annum). Trademark license fee is payable to the Singer Company B.V. abroad, which is calculated at 0.1% of total net sales in accordance with signed agreement. Offshore service fee is payable to the Singer Company B.V. abroad, which is calculated at 1% of total net sales in accordance with signed agreement. Royalty fee is payable to the Singer Company B.V. abroad, which is calculated at 5% of total net sales of sewing machines manufactured by Singer Industries (Thailand) Limited in accordance with signed agreement. iii) Outstanding balances arising from sales/purchases of goods and other incomes/expenses Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht Baht Baht Baht Amounts due from Subsidiaries (more)