NSOLIDATED FINANCIAL STATEMENTS QUARTER 2

SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS (UNAUDITED) (Cont'd) FOR THE THREE-MONTH PERIOD ENDED 30 JUNE Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in bank overdrafts and short-term loans 121,284,910 (161,396,889) 115,863,063 (162,359,514) Repayment of long-term loans (80,000,000) - (80,000,000) - (Decrease) in employees security deposits and provident funds (7,137,723) (2,108,300) (7,049,036) (2,114,117) Dividend income - - - 13,958,000 Net cash inflow (outflow) from financing activities 34,147,187 (163,505,189) 28,814,027 (150,515,631) Increase in cash and cash equivalents 89,510,242 81,305,953 88,920,451 79,981,331 Cash and cash equivalents at beginning of the period 145,751,039 33,508,537 144,121,597 31,891,841 Cash and cash equivalents at end of the period (Note 13) 235,261,281 114,814,490 233,042,048 111,873,172 ADDITIONAL CASH FLOWS INFORMATION Interest paid during the period 78,748,370 135,433,905 75,783,475 130,458,603 Income tax paid during the period 86,123 77,049 85,771 76,647 SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX-MONTH PERIOD ENDED 30 JUNE Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht CASH FLOWS FROM OPERATING ACTIVITIES: Income before extraordinary item 44,605,826 22,862,739 44,605,826 25,527,103 Adjusted by: (Gain) on exchange rate (9,710,273) - (9,710,273) - Depreciation 22,724,397 22,136,796 21,252,796 21,077,616 Amortisation of prepaid rent 10,907,953 11,352,430 10,907,953 11,352,430 Increase (decrease) in allowance for doubtful accounts 21,887,800 79,753,676 20,499,000 79,632,476 (Decrease) in allowance for inventory obsolescence (6,941,315) (8,723,301) (6,250,000) (6,100,000) Provision for diminution in value of other investment - 1,000,000 - 1,000,000 (Decrease) in dividends payable (Note 12) (24,317,729) - (24,317,729) - (Gain) on disposal of fixed assets (377,833) (255,028) (377,833) (971,338) Share of loss (profit) from subsidiaries - - 7,230,697 (2,410,708) Decrease in inventories 80,350,775 331,865,078 72,463,658 321,693,507 Decrease in debtors and other current assets 121,340,918 547,855,280 117,108,753 565,972,527 (Decrease) in creditors and other current liabilities (16,519,847) (161,099,100) (10,753,619) (158,238,507) Increase in accrued income tax 516,921 1,296,318 - - Cash flows from operating activities before extraordinary item 244,467,593 848,044,888 242,659,229 858,535,106 Realised gain from the change in exchange rate system - 22,894,374 - 20,230,010 Net cash inflow from operating activities 244,467,593 870,939,262 242,659,229 878,765,116 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sales of fixed assets 1,023,150 2,529,391 1,023,150 2,529,391 Purchases of fixed assets (21,867,569) (16,325,206) (21,855,419) (16,039,210) Decrease (increase) in loans to subsidiaries - - 2,500,000 (24,055,000) (Increase) in prepaid rent (3,425,800) (4,703,202) (3,425,800) (4,703,202) Decrease in receivable from and loans to employees 2,049,464 1,204,896 2,080,917 1,532,000 (Increase) in long-term investment - (1,139,914) - - Net cash (outflow) from investing activities (22,220,755) (18,434,035) (19,677,152) (40,736,021) SINGER THAILAND PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS (UNAUDITED) (Cont'd) FOR THE SIX-MONTH PERIOD ENDED 30 JUNE Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in bank overdrafts and short-term loans 104,777,092 (833,092,058) 104,429,923 (833,947,094) Repayment of long-term loans (200,000,000) (20,000,000) (200,000,000) (20,000,000) (Decrease) in employees security deposits and provident funds (21,954,782) (28,465,769) (23,181,886) (28,460,333) Dividend income - - - 13,958,000 Net cash (outflow) from financing activities (117,177,690) (881,557,827) (118,751,963) (868,449,427) Increase (decrease) in cash and cash equivalents 105,069,148 (29,052,600) 104,230,114 (30,420,332) Cash and cash equivalents at beginning of the period 130,192,133 143,867,090 128,811,934 142,293,504 Cash and cash equivalents at end of the period (Note 13) 235,261,281 114,814,490 233,042,048 111,873,172 ADDITIONAL CASH FLOWS INFORMATION Interest paid during the period 122,298,773 237,784,028 116,001,179 228,967,054 Income tax paid during the period 119,617 888,326 118,527 167,924 SINGER THAILAND PUBLIC COMPANY LIMITED NOTES TO INTERIM CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS (UNAUDITED) 30 JUNE 1999 AND 1998 1 Economic crisis and effects on company's operations The company operates in Thailand, which, together with a number of other countries in the Asia Pacific Region is currently experiencing an economic crisis. The crisis in Thailand has involved a slowdown in economic growth, a shortage of liquidity within the country and volatility of the securities market. The company's operations have been affected by the economic crisis in the current period and are expected to continue to be affected for the foreseeable future. The ultimate outcome of the economic crisis cannot be determined at present. 2 Summary of significant accounting policies 2.1 Basis for preparation of financial statements The interim consolidated and company financial statements have been prepared in accordance with and complied with generally accepted accounting principles in Thailand and regulations of the Stock Exchange of Thailand. 2.2 Principles of consolidation The interim consolidated financial statements incorporate the financial statements of Singer Thailand Public Company Limited and its subsidiaries. Intercompany transactions are eliminated in the consolidation. Subsidiaries are those companies in which the company holds, directly or indirectly, more than 50% of the voting shares and dominant influence is exercised in their management. Subsidiaries included in the interim consolidated financial statements are as follows: 1999 1998 % of shareholding % of shareholding Singer Industries (Thailand) Limited 99.88 99.88 Singer (Broker) Limited 99.70 99.70 Singer Trading (Thailand) Limited 99.86 99.86 Sansui (Thailand) Limited 50.86 50.86 S. T. L. Electronics Limited 99.84 99.84 2.3 Revenue recognition Sales comprise cash sales, credit sales and installment sales. Cash sales and credit sales are recognised when products are delivered. Installment sales represent sales under hire-purchase contracts whereby the related debts are effectively secured by the products sold. Revenue from installment sales comprises sales of product and interest. The interest on installment sales are calculated on customary financing terms. Sales of product and gross profit are recognised when contracts are signed and first payments are received. Interest is recorded in unearned carrying charges and recognised as earned by using the sum- of-the-months'digit method. Collection commissions are accrued upon collection. 2.4 Installment accounts receivable In accordance with trade practice, installment accounts receivable are classified as current asset 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. 2.5 Inventories Inventories are presented on the balance sheet at the lower of cost and net realisable value (NRV), cost being determined on the first-in first-out basis. The cost of purchase comprises both the purchase price and costs directly attributable to the acquisition of the inventories, such as import duties and transportation charge, less all attributable discounts, allowances or rebates. The company estimates net realisable value from the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. 2.6 Investments Investments in subsidiaries Investments in an enterprise where the company holds more than 50 percent of its share capital or has control over its operations is considered an investments in a subsidiary company and is recorded using the equity method of accounting. In case where 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 subsidiary's obligations, the negative investment in the subsidiary will be recorded as liability. Investment in other company The company has adopted the Thai Accounting Standard No. 40 "Accounting for Investments in Debt and Equity Securities" from 1 January 1999. Investment in non-listed securities is stated at cost and is reduced to net realisable value by a charge to statement of income for an impairment in value. Before 1 January 1999, investment in non-listed securities is stated at cost less allowance for permanent diminution in value. 2.7 Property, plant and equipment Carrying value - at appraised value Part of land is presented at market value appraised by an independent appraisal specialist in March 1992 and September 1998. A revaluation increase is recorded as a "Surplus on revaluation of land" under the shareholders' equity. Carrying value - at cost Property, plant and equipment are recorded at cost. Cost is measured by the cash or cash equivalent price of obtaining the asset and bringing it to the location and condition necessary for its intended use. Property, plant and equipment, except land, are presented in the balance sheet at cost less accumulated depreciation. Depreciation Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. The estimated useful lives are as follows: Buildings 20 years Leasehold improvements 5 Years Machinery and equipment 5 Years Office furniture, fixtures and equipment 5 Years Motor vehicles 5 Years The company records depreciation as an expense in that period. When a long-term asset is retired, the company will write-off both the asset account and its related accumulated depreciation, and recognise any gain or loss from retirement of the asset. Capital expenditures Expenditures for addition, renewal and betterment, which result in a substantial increase in an asset's current replacement value, are capitalised. Repair and maintenance costs are recognised as an expense when incurred. (More)