NUAL CONSOLIDATED FINANCIAL STATEMENTS 1998

5 Inventories Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Baht Baht Baht Baht Finished goods 875,083,134 1,395,223,787 851,197,246 1,373,223,798 Component parts 91,280,145 65,994,303 69,993,131 25,567,309 Supplies and tools 1,826,879 1,890,786 - - 968,190,158 1,463,108,876 921,190,377 1,398,791,107 Less: Provision for inventory obsolescence (37,052,764) (37,002,188) (35,400,000) (32,800,000) 931,137,394 1,426,106,688 885,790,377 1,365,991,107 Component parts in transit 230,979 - - - Work in process 3,318,897 4,359,668 - - 934,687,270 1,430,466,356 885,790,377 1,365,991,107 6 Short-term Investments Short-term investments represent promissory notes for period not exceeding 3 months. 7 Advance and loans to subsidiaries Advance and loans to subsidiaries as at 31 December comprise: Company 1998 1997 Unaudited Baht Baht Advance to - S.T.L Electronics Limited 3,320,779 13,331,316 - other subsidiaries 103,708 79,837 3,424,487 13,411,153 Loans to - Singer Industries (Thailand) Limited 70,000,000 87,292,000 - S.T.L Electronics Limited 36,000,000 - 109,424,487 100,703,153 Loans to subsidiaries bear interest at the rate of 14% per annum (1997: 15% per annum) and are repayable on demand. 8 Long-term investments Long-term investments as at 31 December can be summarised as follows: Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Baht Baht Baht Baht Promissory note 1,139,914 - - - Investment in subsidiaries - - 133,442,425 149,407,954 Investment in other company 800,000 1,970,000 800,000 1,970,000 1,939,914 1,970,000 134,242,425 151,377,954 Investment in other company represents investment in Thai Swedish Furniture Co., Ltd., which the company holds 9.95% of its share capital. 8 Long-term investments (Contd) Investment in subsidiaries in the company financial statements as at 31 December comprise the following companies: In Baht 1998 Nature of Paid up capital Investment Amount of Amount in Nature of business relationship Baht Portion % Cost method Equity method Balance sheet Singer Industries (Thailand) Limited Manufacturing Holding 5,000,000 99.88 4,994,000 114,673,145 114,673,145 Singer (Broker) Limited Life insurance Broker Holding 200,000 99.70 199,400 19,673,201 19,673,201 Singer Trading (Thailand) Limited Trading Holding 125,000 99.86 124,825 138,811 138,811 Sansui (Thailand) Limited Trading Holding 50,000 50.86 25,430 (38,557) (38,557) S.T.L. Electronics Limited Trading Holding 5,000,000 99.84 4,992,000 (1,004,175) (1,004,175) 10,335,655 133,442,425 133,442,425 In Baht 1997 (Unaudited) Nature of Paid up capital Investment Amount of Amount in Nature of business relationship Baht Portion % Cost method Equity method Balance sheet Singer Industries (Thailand) Limited Manufacturing Holding 5,000,000 99.88 4,994,000 121,242,680 121,242,680 Singer (Broker) Limited Life insurance Broker Holding 200,000 99.70 199,400 26,848,426 26,848,426 Singer Trading (Thailand) Limited Trading Holding 125,000 99.86 124,825 168,123 168,123 Sansui (Thailand) Limited Trading Holding 50,000 50.86 25,430 (28,221) (28,221) S.T.L. Electronics Limited Trading Holding 1,250,000 99.84 1,248,000 1,176,946 1,176,946 6,591,655 149,407,954 149,407,954 9 Property, plant and equipment Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Baht Baht Baht Baht At cost or valuation Land - at cost 97,137,400 96,500,000 97,137,400 96,500,000 - at revaluation 329,178,874 323,858,874 219,918,874 214,598,874 Building 293,532,802 290,268,802 239,970,680 236,706,680 Building improvements 73,744,625 69,956,498 73,169,437 69,381,310 Land improvement 8,094,946 8,094,946 8,094,946 8,094,946 Machinery and equipment 13,278,760 14,059,085 - - Office furniture, fixtures and equipment 80,061,312 90,017,243 75,146,945 85,745,014 Motor vehicles 29,020,304 31,995,304 29,020,304 31,995,304 924,049,023 924,750,752 742,458,586 743,022,128 Less: Accumulated depreciation (205,538,768) (190,341,175) (178,978,909) (166,326,025) 718,510,255 734,409,577 563,479,677 576,696,103 Add: Construction in progress 40,000 2,597,000 40,000 2,597,000 718,550,255 737,006,577 563,519,677 579,293,103 Depreciation expenses for the period 22,425,170 22,252,222 20,939,640 20,788,266 The valuation of land was carried out in March 1992 and September 1998 by American Appraisal (Thailand) Ltd. 10 Prepaid rent Prepaid rent is for the company's retail shops. The lease terms vary from 2-20 years. 11 Bank overdrafts and short-term loans Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Baht Baht Baht Baht Bank overdrafts 37,532,513 74,064,684 33,278,028 66,220,251 Loans from banks and financial Institutions 53,266,978 1,465,962,830 53,266,978 1,465,962,830 90,799,491 1,540,027,514 86,545,006 1,532,183,081 Bank overdrafts and short-term loans are unsecured. Bank overdrafts bear interest at the rates ranging from 13.75% to 16.75% per annum (1997 : 13.75% to 16.5% per annum). Short-term loans bear interest at the rates ranging from 7.26% to 13.5% per annum (1997 : 12% to 13.5% per annum). As of 31 December 1998, Singer Thailand Public Company Limited has total unused credit facilities on bank overdrafts and short term loans of Baht 230 million (1997 : Baht 307 million) and Baht 498 million (1997 : Baht 2,780 million) respectively, and a subsidiary has total unused credit facilities on bank overdrafts and short term loans of Baht 22 million (1997 : Baht 51 million) and Baht 5 million (1997 : Baht 122 million)respectively. 12 Long-term loans Long-term loans are unsecured. Long-term loans as at 31 December comprise: Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Baht Baht Baht Baht Loans denominated in Thai Baht 380,000,000 420,000,000 380,000,000 420,000,000 Loans denominated in foreign 1,209,085,000 1,254,580,000 1,209,085,000 1,254,580,000 currency 1,589,085,000 1,674,580,000 1,589,085,000 1,674,580,000 Loans denominated in Thai Baht are from financial institutions in Thailand amounting to Baht 380 million (1997: Baht 420 million). The loans bear interest at the rates ranging from 12.28% to 12.6% per annum (1997: 12.5% to 14.5% per annum). The loans will be due within 1 to 5 years. Long-term loans denominated in foreign currency include the followings: - Syndicated loan from overseas financial institutions for which Schroder International Merchant Banks Limited acted as the facility agent for Singer Thailand Public Company Limited amounts to US$ 40 million (1997: US$ 40 million) or Baht 1,016 million of which Baht 762 million is due for repayment in December 2001, and Baht 254 million in June 2002. Loan interest is at LIBOR per annum. - Loan from a branch of a foreign financial institution amounted to US$ 5 million (1997: US$ 5 million). Loan interest is at SIBOR per annum (1997: SIBOR per annum). The loan will be repaid in US$ by three consecutive semi-annual equal installments commencing on the date falling two years after the date of first drawing. The first repayment will be due in July 1999. Hedging In December 1996, the company entered into an agreement to swap both interest rate and principal of the US$ 40 million syndicated loan above, bearing interest at LIBOR, with the principal of Baht 1,016 million, bearing interest at the rate of 10.35% per annum for the principal amount of Baht 254 million, and 10.57% per annum of the principal amount of Baht 762 million. The loan from a branch of foreign financial institution in Thailand amounted to US$ 5 million was hedged by forward contracts amounted to US$ 4 million as at 31 December 1998 (1997: none). Total long-term loans are repayable as follows: Consolidated Company 1998 1997 1998 1997 Unaudited Unaudited Baht Baht Baht Baht Due within 1 year 101,483,333 40,000,000 101,483,333 40,000,000 Due within 2 to 3 years 1,233,401,667 119,260,000 1,233,401,667 119,260,000 Due within 4 to 5 years 254,200,000 1,515,320,000 254,200,000 1,515,320,000 1,487,601,667 1,634,580,000 1,487,601,667 1,634,580,000 Total long-term loans 1,589,085,000 1,674,580,000 1,589,085,000 1,674,580,000 13 Accounts payable ralated companies Accounts payable ralated companies represents the outstanding balance for purchase of goods from a number of related companies aboard. 14 Accounts payable subsidiaries Accounts payable subsidiaries as at 31 December comprise: Company 1998 1997 Unaudited Baht Baht Accounts payable - Singer Industries (Thailand) Limited 6,077,548 4,800,689 - Singer (Broker) Limited 24,842,929 35,407,842 30,920,477 40,208,531 15 Amount due to related company Amount due to related company represents outstanding balance with a related company aboard for trademark license fee and offshore service fee which are calculated at 0.1% and 1% of total net sales respectively. 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