ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 1998

AUDITOR'S REPORT To the Shareholders of Singer Thailand Public Company Limited I have audited the accompanying consolidated and company balance sheets as at 31 December 1998 and the related consolidated and company statements of income, of changes in shareholders equity, of retained earnings and of cash flows for the six-month period ended 31 December 1998 of Singer Thailand Public Company Limited and its subsidiaries, and of Singer Thailand Public Company Limited. These financial statements are the responsibility of the companys management. My responsibility is to express an opinion on these financial statements. The interim consolidated and company financial statements of Singer Thailand Public Company Limited and its subsidiaries, and of Singer Thailand Public Company Limited for the six-month period ended 31 December 1997, presented for comparative purposes, were previously reviewed by myself in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand and in my report dated 30 January 1998, I expressed that I was not aware of any material modifications that should be made to those interim consolidated and company financial statements for them to be in conformity with generally accepted accounting principles. 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 consolidated and company financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated and company 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 aforementioned consolidated and company financial statements present fairly, in all material respects, the financial position of Singer Thailand Public Company Limited and its subsidiaries, and of Singer Thailand Public Company Limited as at 31 December 1998 and the results of their operations and their cash flows for the six-month period then ended in conformity with generally accepted accounting principles. Without qualifying my opinion, I draw attention to the following notes to the consolidated and company financial statements: Note 1. The companys operations have been affected, and are expected to continue to be affected for the foreseeable future, by the current economic crisis. The ultimate outcome of this crisis cannot be determined at present. Note 29. The note is marked unaudited. Information regarding the Year 2000 issue as presented in this note has not been subjected to auditing procedures, and accordingly, I express no opinion on it. SUCHART LUENGSURASWAT Certified Public Accountant (Thailand) No. 2807 PricewaterhouseCoopers Audit and Business Advisory Services Limited Bangkok 29 January 1999 SINGER THAILAND PUBLIC COMPANY LIMITED BALANCE SHEETS AS AT 31 DECEMBER ASSETS Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Notes Baht Baht Baht Baht CURRENT ASSETS Cash in hand, at banks and in transit 100,192,133 42,867,090 98,811,934 42,293,504 Short-term investments 6 30,000,000 101,000,000 30,000,000 100,000,000 Trade and installment accounts receivable (net) 4 3,098,618,090 4,536,124,528 3,078,521,923 4,531,755,347 Inventories 5 934,687,270 1,430,466,356 885,790,377 1,365,991,107 Amounts due from and loans to subsidiaries 7 - - 109,424,487 100,703,153 Other current assets 40,183,454 51,525,162 34,396,379 43,693,701 TOTAL CURRENT ASSETS 4,203,680,947 6,161,983,136 4,236,945,100 6,184,436,812 RECEIVABLE FROM AND LOANS TO EMPLOYEES 4,625,472 7,079,097 3,349,712 6,073,983 LONG-TERM INVESTMENTS 8 1,939,914 1,970,000 134,242,425 151,377,954 PROPERTY, PLANT AND EQUIPMENT (net) 9 718,550,255 737,006,577 563,519,677 579,293,103 PREPAID RENT 10 92,015,613 107,320,446 92,015,613 107,320,446 TOTAL ASSETS 5,020,812,201 7,015,359,256 5,030,072,527 7,028,502,298 The notes on pages 11 to 24 form an integral part of the financial statements. SINGER THAILAND PUBLIC COMPANY LIMITED BALANCE SHEETS AS AT 31 DECEMBER LIABILITIES AND SHAREHOLDERS EQUITY Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Notes Baht Baht Baht Baht CURRENT LIABILITIES Bank overdrafts and short-term loans 11 90,799,491 1,540,027,514 86,545,006 1,532,183,081 Current portion of long-term loans 12 101,483,333 40,000,000 101,483,333 40,000,000 Accounts payable - other companies 127,233,241 278,385,957 115,510,133 264,156,159 - related companies 13 5,315,526 21,233,008 5,315,526 21,233,008 - subsudiaries 14 - - 30,920,477 40,208,531 Amount due to related company 15 3,014,802 94,643,583 2,531,157 94,446,737 Dividends payable 35,047,805 35,445,645 35,047,805 35,445,645 Accrued income tax 898,442 1,309,401 - - Accrued liabilities 3,16 218,831,313 435,281,849 216,910,214 432,150,809 Other current liabilities 17 92,245,388 50,684,694 91,756,570 50,569,985 TOTAL CURRENT LIABILITIES 674,869,341 2,497,011,651 686,020,221 2,510,393,955 UNSECURED DEBENTURES 18 500,000,000 500,000,000 500,000,000 500,000,000 LONG-TERM LOANS 12 1,487,601,667 1,634,580,000 1,487,601,667 1,634,580,000 PROVISION FOR RETIREMENT COST 19 54,214,216 49,525,770 52,800,000 49,400,000 EMPLOYEES SECURITY DEPOSITS 150,655,614 207,140,327 150,179,276 207,026,835 PROVIDENT FUNDS 20 198,070,694 197,954,880 198,070,694 197,954,880 TOTAL LIABILITIES 3,065,411,532 5,086,212,628 3,074,671,858 5,099,355,670 The notes on pages 11 to 24 form an integral part of the financial statements. SINGER THAILAND PUBLIC COMPANY LIMITED BALANCE SHEETS AS AT 31 DECEMBER LIABILITIES AND SHAREHOLDERS EQUITY (CONTD) Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Notes Baht Baht Baht Baht 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 Share premium 225,000,000 225,000,000 225,000,000 225,000,000 Surplus on revaluation of land 21 241,546,403 235,866,403 241,546,403 235,866,403 Retained earnings: Appropriated Legal reserve 27,000,000 27,000,000 27,000,000 27,000,000 Unappropriated 1,191,854,266 1,171,280,225 1,191,854,266 1,171,280,225 TOTAL SHAREHOLDERS EQUITY 1,955,400,669 1,929,146,628 1,955,400,669 1,929,146,628 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 5,020,812,201 7,015,359,256 5,030,072,527 7,028,502,298 The notes on pages 11 to 24 form an integral part of the financial statements. SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF INCOME FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Notes Baht Baht Baht Baht REVENUES Sales 1,295,000,101 2,240,717,304 1,272,591,477 2,230,071,189 Interest from installment sales 319,883,458 476,058,851 319,883,458 476,058,851 Gain on exchange rate 14,482,846 - 14,513,500 - Other income 23 59,206,190 3,294,223 60,225,010 2,926,347 TOTAL REVENUES 1,688,572,595 2,720,070,378 1,667,213,445 2,709,056,387 EXPENSES Cost of sales 841,258,354 1,479,190,332 830,260,172 1,471,767,254 Selling and administrative expenses 3 728,197,423 1,184,651,111 716,455,412 1,178,742,189 Directors remuneration 200,000 200,000 200,000 200,000 Interest and other financial costs 167,659,671 245,706,924 162,123,168 242,116,813 TOTAL EXPENSES 1,737,315,448 2,909,748,367 1,709,038,752 2,892,826,256 Income (loss)from operations before income tax (48,742,853) (189,677,989) (41,825,307) (183,769,869) Income tax 1,254,129 3,165,918 - - Income (loss) after income tax (49,996,982) (192,843,907) (41,825,307) (183,769,869) Share of (loss) profit from subsidiaries - - (8,171,675) (15,241,201) INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (49,996,982) (192,843,907) (49,996,982) (199,011,070) Extraordinary item: 26 Loss from the change in Exchange rate system - (123,994,667) - (117,827,504) NET INCOME (LOSS) FOR THE PERIOD (49,996,982) (316,838,574) (49,996,982) (316,838,574) EARNINGS PER SHARE Income (loss) before extraordinary item (1.85) (7.14) (1.85) (7.37) Extraordinary item - (4.59) - (4.36) Net income (loss) for the period (1.85) (11.73) (1.85) (11.73) The notes on pages 11 to 24 form an integral part of the financial statements. SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Notes Baht Baht Baht Baht Share capital - ordinary shares Beginning balance 270,000,000 270,000,000 270,000,000 270,000,000 Addition during the period - - - - Ending balance 270,000,000 270,000,000 270,000,000 270,000,000 Additional paid-in capital Share premium Beginning balance 225,000,000 225,000,000 225,000,000 225,000,000 Addition during the period - - - - Ending balance 225,000,000 225,000,000 225,000,000 225,000,000 Surplus on revaluation of land 21 Beginning balance 235,866,403 235,866,403 235,866,403 235,866,403 Addition during the period 6,600,000 - 6,600,000 - Deduction during the period (920,000) - (920,000) - Ending balance 241,546,403 235,866,403 241,546,403 235,866,403 Retained earnings Appropriated legal reserve Beginning balance 27,000,000 27,000,000 27,000,000 27,000,000 Addition during the period - - - - Ending balance 27,000,000 27,000,000 27,000,000 27,000,000 Unappropriated retained earnings Beginning balance 1,241,851,248 1,650,118,799 1,241,851,248 1,650,118,799 Less: Dividends 22 - (162,000,000) - (162,000,000) Add: Net income (loss) for the period (49,996,982) (316,838,574) (49,996,982) (316,838,574) Ending balance 1,191,854,266 1,171,280,225 1,191,854,266 1,171,280,225 TOTAL SHAREHOLDERS EQUITY 1,955,400,669 1,929,146,628 1,955,400,669 1,929,146,628 The notes on pages 11 to 24 form an integral part of the financial statements. SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF RETAINED EARNINGS FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Notes Baht Baht Baht Baht Unappropriated retained earnings Beginning balance 1,241,851,248 1,650,118,799 1,241,851,248 1,650,118,799 Net income (loss) for the period (49,996,982) (316,838,574) (49,996,982) (316,838,574) Dividend 22 - (162,000,000) - (162,000,000) Unappropriated retained Earnings 1,191,854,266 1,171,280,225 1,191,854,266 1,171,280,225 Appropriated retained earnings Legal reserve, beginning Balance 27,000,000 27,000,000 27,000,000 27,000,000 Additional reserve for the period - - - - Appropriated retained Earnings 27,000,000 27,000,000 27,000,000 27,000,000 Retained earnings 1,218,854,266 1,198,280,225 1,218,854,266 1,198,280,225 (More)