ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 2000

AUDITOR'S REPORT To the Shareholders of Singer Thailand Public Company Limited I have audited the accompanying consolidated and company balance sheets of Singer Thailand Public Company Limited as at 31 December 2000, the related consolidated and company statements of income, changes in shareholders equity, retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the Companys management. My responsibility is to express an opinion on these financial statements based on my audit. The consolidated and company financial statements of Singer Thailand Public Company Limited for the year ended 31 December 1999, presented herewith for comparative purpose, were audited by another auditor from the same firm as myself whose report dated 11 February 2000 expressed an unqualified opinion on those statements. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the consolidated and company financial statements referred to above present fairly, in all material respects, the consolidated and company financial position of Singer Thailand Public Company Limited as at 31 December 2000, and the consolidated and company results of operations and cash flows for the year then ended in conformity with generally accepted accounting principles. SOMSRI DHANYACHEEVEE Certified Public Accountant (Thailand) No. 1905 PricewaterhouseCoopers ABAS Limited Bangkok 9 February 2001 Singer Thailand Public Company Limited Balance Sheets As at 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht ASSETS Current Assets Cash on hand and at banks 3 124,387,426 175,489,413 114,586,988 170,200,041 Short-term investments 4 80,101,366 - 80,101,366 - Current portion of debt security 5 - 1,139,914 - - Trade and installment accounts receivable, net 6 2,482,523,772 2,668,410,935 2,480,746,360 2,655,990,386 Loans and amounts due from related companies 24 3,081 203,061 105,100,845 104,656,003 Inventories 8 716,120,994 842,106,044 673,103,176 795,825,622 Other current assets 9 20,081,496 24,229,092 12,002,093 16,553,008 Total Current Assets 3,423,218,135 3,711,578,459 3,465,640,828 3,743,225,060 Non-Current Assets Receivable from and loans to employees 1,284,125 1,970,618 267,239 746,975 Investments in subsidiaries 24 - - 133,440,163 132,844,631 Long-term investments 5 1,100,000 800,000 100,000 800,000 Property, plant and equipment, net 10 689,354,002 708,972,667 540,217,506 556,945,389 Prepaid rent 11 71,705,111 78,803,060 71,705,111 78,803,060 Total Non-Current Assets 763,443,238 790,546,345 745,730,019 770,140,055 Total Assets 4,186,661,373 4,502,124,804 4,211,370,847 4,513,365,115 Director Director The notes to these consolidated and company financial statements on pages 8 to 30 form an integral part of these financial statements. Singer Thailand Public Company Limited Balance Sheets As at 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities Bank overdrafts and short-term loans from financial institutions 12 149,910,803 282,562,582 141,607,434 276,894,337 Trade accounts payable - other companies 113,801,068 352,024,605 102,184,220 327,713,040 - related companies 24 2,037,405 4,335,509 37,653,869 44,506,754 Current portion of long-term borrowings 13 589,260,000 313,017,020 589,260,000 313,017,020 Amounts due to related company 24 46,884,522 4,098,958 46,305,606 3,246,608 Dividends payable 17,064,123 13,625,359 17,064,123 13,625,359 Accrued income tax 1,422,411 2,458,153 - - Accrued liabilities 14 191,893,522 123,067,260 189,535,186 120,716,856 Other current liabilities 15 24,520,187 22,361,172 24,370,748 22,274,239 Total Current Liabilities 1,136,794,041 1,117,550,618 1,147,981,186 1,121,994,213 Non-Current Liabilities Liabilities arising from investments in subsidiaries 24 - - 15,260,450 9,091,575 Long-term borrowings 13 606,284,000 1,050,000,000 606,284,000 1,050,000,000 Provision for retirement cost 16 55,163,863 48,182,152 54,000,000 46,500,000 Employee security deposits 128,674,700 133,003,969 128,100,442 132,391,262 Provident funds 17 174,919,342 174,102,870 174,919,342 174,102,870 Total Non-Current Liabilities 965,041,905 1,405,288,991 978,564,234 1,412,085,707 Total Liabilities 2,101,835,946 2,522,839,609 2,126,545,420 2,534,079,920 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 Premium on share capital 225,000,000 225,000,000 225,000,000 225,000,000 Land revaluation reserve 18 240,047,403 240,926,403 240,047,403 240,926,403 Retained earnings: Appropriated - legal reserve 27,000,000 27,000,000 27,000,000 27,000,000 Unappropriated 1,322,778,024 1,216,358,792 1,322,778,024 1,216,358,792 Total Shareholders Equity 2,084,825,427 1,979,285,195 2,084,825,427 1,979,285,195 Total Liabilities and Shareholders Equity 4,186,661,373 4,502,124,804 4,211,370,847 4,513,365,115 The notes to these consolidated and company financial statements on pages 8 to 30 form an integral part of these financial statements. Singer Thailand Public Company Limited Statements of Income For the years ended 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht Revenues Sales 3,266,563,704 3,434,335,896 3,241,981,204 3,403,334,464 Interest from installment sales 557,866,977 513,761,986 557,866,977 513,761,986 Other income 19 8,892,016 29,818,459 6,134,874 27,858,793 Total Revenues 3,833,322,697 3,977,916,341 3,805,983,055 3,944,955,243 Expenses Cost of sales 2,010,650,520 2,188,665,512 2,000,905,566 2,180,230,978 Selling and administrative expenses 1,518,625,462 1,514,246,602 1,504,777,254 1,491,775,881 Directors remuneration 550,000 400,000 550,000 400,000 Interest and other financial costs 167,674,773 220,037,367 160,751,208 211,340,386 Total Expenses 3,697,500,755 3,923,349,481 3,666,984,028 3,883,747,245 Operating profit (loss) 135,821,942 54,566,860 138,999,027 61,207,998 Share of (loss) of subsidiaries - - (5,579,795) (9,703,472) Profit (loss) before income tax 135,821,942 54,566,860 133,419,232 51,504,526 Income tax 2,402,710 3,062,334 - - Net profit for the year 133,419,232 51,504,526 133,419,232 51,504,526 Basic earnings per share 23 Net profit for the year 4.94 1.91 4.94 1.91 The notes to these consolidated and company financial statements on pages 8 to 30 form an integral part of these financial statements. Singer Thailand Public Company Limited Statements of Changes in Shareholders Equity For the years ended 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht Share Capital Beginning balance 270,000,000 270,000,000 270,000,000 270,000,000 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 Ending balance 225,000,000 225,000,000 225,000,000 225,000,000 Land Revaluation Reserve 18 Beginning balance 240,926,403 241,546,403 240,926,403 241,546,403 Decrease during the year (879,000) (620,000) (879,000) (620,000) Ending balance 240,047,403 240,926,403 240,047,403 240,926,403 Retained Earnings Appropriated retained earnings Legal reserve Beginning balance 27,000,000 27,000,000 27,000,000 27,000,000 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 year 133,419,232 51,504,526 133,419,232 51,504,526 Decrease during the year 20 (27,000,000) (27,000,000) (27,000,000) (27,000,000) Ending balance 1,322,778,024 1,216,358,792 1,322,778,024 1,216,358,792 Total Shareholders Equity 2,084,825,427 1,979,285,195 2,084,825,427 1,979,285,195 The notes to these consolidated and company financial statements on pages 8 to 30 form an integral part of these financial statements. Singer Thailand Public Company Limited Statements of Retained Earnings For the years ended 31 December 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 Add: Net profit for the year 133,419,232 51,504,526 133,419,232 51,504,526 Less: Dividends paid 20 (27,000,000) (27,000,000) (27,000,000) (27,000,000) Unappropriated retained earnings at end of the year 1,322,778,024 1,216,358,792 1,322,778,024 1,216,358,792 Appropriated retained earnings: Legal reserve 27,000,000 27,000,000 27,000,000 27,000,000 Appropriated retained earnings at end of the year 27,000,000 27,000,000 27,000,000 27,000,000 Total Retained Earnings at End of the Year 1,349,778,024 1,243,358,792 1,349,778,024 1,243,358,792 The notes to these consolidated and company financial statements on pages 8 to 30 form an integral part of these financial statements. Singer Thailand Public Company Limited Statements of Cash Flows For the years ended 31 December 2000 and 1999 Consolidated Company 2000 1999 2000 1999 Notes Baht Baht Baht Baht Cash flows from operating activities 21 388,029,860 685,312,332 388,163,529 680,518,242 Cash flows from investing activities Purchases of property, plant and equipment (26,309,762) (36,570,672) (26,268,068) (36,545,708) Payment of prepaid rent (11,335,744) (9,634,144) (11,335,744) (9,634,144) Payment of long-term investment in debt security (1,000,000) - - - Loans made to subsidiaries - - (18,000,000) (5,500,000) Proceeds from disposals of property, plant and equipment 4,987,450 1,587,175 4,744,366 1,587,175 Loan payments received from subsidiaries - - 16,500,000 8,000,000 Proceed from debt security 1,139,914 - - - (Increase) decrease in receivable from and loans to employees 686,493 2,654,854 479,737 2,602,737 Net cash receipts (payments) in investing activities (31,831,649) (41,962,787) (33,879,709) (39,489,940) Cash flows from financing activities Increase (decrease) in bank overdrafts and short-term loans from financial institutions (132,651,779) 191,800,891 (135,286,903) 190,349,330 Proceeds from long-term borrowings 1,300,000,000 590,000,000 1,300,000,000 590,000,000 Payments of long-term borrowings (1,467,473,020) (1,314,128,970) (1,467,473,020) (1,314,128,970) Increase (decrease) in employee security deposits and provident funds (3,512,797) (41,619,469) (3,474,348) (41,755,838) Dividends paid (23,561,236) (24,104,717) (23,561,236) (24,104,717) Net cash receipts (payments) in financing activities (327,198,832) (598,052,265) (329,795,507) (599,640,195) Net increase (decrease) in cash and cash equivalents 28,999,379 45,297,280 24,488,313 41,388,107 Cash and cash equivalents at beginning of the year 175,489,413 130,192,133 170,200,041 128,811,934 Cash and cash equivalents at end of the year 22 204,488,792 175,489,413 194,688,354 170,200,041 Supplementary information for cash flows: Interest paid 168,921,595 232,364,308 161,978,821 220,817,815 Tax paid 3,301,503 884,399 207,755 253,472 The notes to these consolidated and company financial statements on pages 8 to 30 form an integral part of these financial statements. Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2000 and 1999 1 General Information Singer Thailand Public Company Limited (the Company) is a public limited company, incorporated and domiciled in Thailand. The address of its registered office is as follows: 321 Siphaya Road, Siphaya, Bangrak, Bangkok. The Company is listed on the Stock Exchange of Thailand. The Company operates trading of sewing machines and electrical appliances. A listing and operation of the Companys subsidiaries is set out in Note 24 e). As at 31 December 2000, the Company and its subsidiaries employed approximately 7,587 people and 97 people, respectively. 2 Significant Accounting Policies The principal accounting policies adopted in the preparation of these consolidated and company financial statements are set out below: 2.1 Basis of Preparation The consolidated and company financial statements are prepared in accordance with and comply with generally accepted accounting principles in Thailand. The consolidated and company financial statements are prepared under the historical cost convention as modified by the revaluation of certain property, plant and equipment. 2.2 Consolidation Subsidiary undertakings, which are those companies in which the Group, directly or indirectly, has an interest of more than one half of the voting rights or otherwise has power to exercise control over the financial and operating policies, have been consolidated. Subsidiaries are consolidated from the date on which effective control is transferred to the Group and are no longer consolidated from the date of disposal. All intercompany transactions, balances and unrealised surpluses and deficits on transactions between group companies have been eliminated. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Group. 2.3 Investments in Subsidiaries Investments in subsidiaries undertakings are accounted for in the company financial statements by the equity method of accounting. These are undertakings over which the Company has over 50% of the voting rights, and over which the Company exercises control. Provisions are recorded for impairment in value, if any. Equity accounting involves recognising in the income statement the Companys share of the subsidiaries profit or loss for the year. In case a subsidiary incurs a loss in excess of investment, the Company will reduce the investment cost until it reaches zero. In case the Company is held responsible for subsidiarys obligations, the negative investment in the subsidiary is recorded as liability. Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2000 and 1999 2.4 Related Companies Companies are considered to be related if one company has the ability to control or exercise significant influence over the other company in making financial and operating decisions, or if most of the shareholders or executive management of both companies are the same persons. 2.5 Foreign Currency Translation Foreign currency transactions in the Group are accounted for at the exchange rates prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into Baht at the rates ruling at that date. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement. When the Group hedges foreign currency transactions by forward foreign exchange contracts, assets and liabilities are translated at the rates specified in such forward contracts. 2.6 Installment Accounts Receivable In accordance with trade practice, installment accounts receivable are classified as current assets regardless of when payments are due. This receivable is effectively secured by the products sold. The Company makes an allowance for doubtful accounts to cover the estimated losses that may be incurred in the collection of the debts. Bad debts are written off during the year in which they are identified. 2.7 Troubled Debt Restructuring Where the Group is the creditor. In case that the debt restructuring involves modification of terms of receivables, the fair value of investment in receivables after restructuring is based on the net present value of the expected future cash flows, discounted by the Minimum Lending Rates (MLR) prevailing at the restructuring date. 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 are included in expense when incurred. Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2000 and 1999 2.8 Investments Units trust which are classified as available-for-sale securities are carried at fair values. Fair value of units trust is calculated by reference to the Net Asset Value at the close of business on the balance sheet date published by mutual fund management company as the fund manager. Increases/decreases in the carrying amount are credited/charged against unrealised gains/losses on investment in available-for-sale securities in shareholders equity. 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 statement of income, if any. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the statement of income. When disposing of part of the Groups 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. 2.9 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. Singer Thailand Public Company Limited Notes to the Consolidated and Company Financial Statements For the years ended 31 December 2000 and 1999 2.10 Property, Plant and Equipment All property, plant and equipment is initially recorded at cost. Land which has significant value is subsequently shown at appraisal value, based on valuation by an independent valuer every 5 years (more)