NSOLIDATED FINANCIAL STATEMENTS QUARTER 2

2.8 Prepaid rent Prepaid rent is amortised over the rental period on the straight-line basis. 2.9 Foreign currency translation Foreign currency transactions during the period are translated into Baht at the rates of exchange ruling on the transaction dates, except where a transaction is hedged by a forward contract, in which case the contract rate is used. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated into Baht at the rates ruling at that date, with the exception of liabilities covered by forward contracts which are translated at the contract rates. Gains and losses on exchange arising on settlements and translation are recognised as income or expense when incurred. 2.10 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 most of the shareholders or executive management of both companies are the same persons. 2.11 Earnings per ordinary share Earnings per ordinary share is computed by dividing the income before extraordinary item, extraordinary item, and the net income for the period by the weighted average number of paid-up ordinary shares outstanding during the period. 3 Trade and installment accounts receivable Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Trade and installment accounts receivable 3,979,368,811 5,163,749,413 3,965,209,747 5,151,610,069 Less: Allowance for doubtful accounts (428,010,000) (297,683,676) (426,500,000) (297,562,476) 3,551,358,811 4,866,065,737 3,538,709,747 4,854,047,593 Less: Unearned carrying charges (589,614,770) (854,597,959) (589,614,770) (854,597,959) Trade and installment accounts receivable, net 2,961,744,041 4,011,467,778 2,949,094,977 3,999,449,634 The aging of overdue trade accounts receivable are set out below. Trade accounts receivable - installment sales and credit sales Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Over 3 months to 6 months 32,361,034 50,893,813 32,361,034 50,893,813 Over 6 months to 12 months 54,049,230 82,384,852 54,049,230 82,384,852 Over 12 months 155,163,754 102,122,112 155,163,754 102,122,112 Total 241,574,018 235,400,777 241,574,018 235,400,777 Allowance for doubtful accounts 158,710,000 119,294,806 157,200,000 119,173,606 Trade accounts receivable - other Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Over 3 months 481,650,729 323,008,022 481,650,729 323,008,022 Allowance for doubtful accounts 269,300,000 178,388,870 269,300,000 178,388,780 4 Short-term investments Short-term investments represent promissory notes for period not exceeding 3 months. 5 Amounts due from subsidiaries Amounts due from subsidiaries as at 30 June comprise: Company 1999 1998 Baht Baht Amounts due from - S.T.L. Electronics Limited 2,304,801 2,448,875 - other subsidiaries 72,025 57,448 2,376,826 2,506,323 6 Loans to subsidiaries Loans to subsidiaries as at 30 June comprise: Company 1999 1998 Baht Baht Loans to - Singer Industries (Thailand) Limited 70,000,000 87,292,000 - S.T.L. Electronics Limited 33,500,000 24,055,000 103,500,000 111,347,000 Loans to subsidiaries bear interest at the rate of 9.50% per annum (1998: between 15%-16% per annum) and are repayable on demand. 7 Long-term investments Long-term investments as at 30 June can be summarised as follows: Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Promissory note 1,139,914 1,139,914 - - Investments in subsidiaries - - 131,464,631 138,614,553 Investment in other company 800,000 970,000 800,000 970,000 1,939,914 2,109,914 132,264,631 139,584,553 Investment in other company represents investment in Thai Swedish Furniture Co., Ltd. which the company holds 9.95% of its share capital. 7 Long-term investments (Cont'd) Investments in subsidiaries in the company financial statements as at 30 June comprise the following companies: 1999 Amount of Amount in Nature of Paid up capital Investment Cost method Equity method balance sheet Nature of business relationship (Baht) portion % (Baht) (Baht) (Baht) Singer Industries (Thailand) Limited Manufacturing Holding 5,000,000 99.88 4,994,000 108,987,793 108,987,793 Singer (Broker) Limited Life insurance broker Holding 200,000 99.70 199,400 22,341,772 22,341,772 Singer Trading (Thailand) Limited Trading Holding 125,000 99.86 124,825 135,066 135,066 Sansui (Thailand) Limited Trading Holding 50,000 50.86 25,430 - - S.T.L. Electronics Limited Trading Holding 5,000,000 99.84 4,992,000 - - 10,335,655 131,464,631 131,464,631 1998 Amount of Amount in Nature of Paid up capital Investment Cost method Equity method balance sheet Nature of business relationship (Baht) portion % (Baht) (Baht) (Baht) Singer Industries (Thailand) Limited Manufacturing Holding 5,000,000 99.88 4,994,000 120,877,507 120,877,507 Singer (Broker) Limited Life insurance broker Holding 200,000 99.70 199,400 17,583,126 17,583,126 Singer Trading (Thailand) Limited Trading Holding 125,000 99.86 124,825 153,920 153,920 Sansui (Thailand) Limited Trading Holding 50,000 50.86 25,430 - - S.T.L. Electronics Limited Trading Holding 1,250,000 99.84 1,248,000 - - 6,591,655 138,614,553 138,614,553 As at 30 June 1999, the negative investments in Sansui (Thailand) Limited and S.T.L. Electronics Limited are presented as liabilities arising from investments in subsidiaries amounting to Baht 41,507 and Baht 5,201,711 respectively (1998 : Baht 31,476 and Baht 728,444). 8 Accounts payable - related companies Accounts payable - related companies represent the outstanding balance for purchase of goods from a number of related companies abroad. 9 Accounts payable - subsidiaries Accounts payable - subsidiaries as at 30 June comprise: Company 1999 1998 Baht Baht Accounts payable - Singer Industries (Thailand) Limited 9,446,468 17,031,942 - Singer (Broker) Limited 27,027,951 24,890,344 36,474,419 41,922,286 10 Amounts due to related company Amount due to related company represents outstanding balance with a related company abroad for trademark license fee and offshore service fee which are calculated at 0.1% and 1% of total net sales respectively. 11 Other current liabilities Other current liabilities as at 30 June comprise: Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Advance from customers 9,518,336 10,083,247 9,518,336 10,083,247 Value added tax payable 16,959,361 27,659,835 16,542,152 27,389,072 Other accounts payable 13,688,746 6,441,778 13,616,621 6,353,293 40,166,443 44,184,860 39,677,109 43,825,612 12 Other income The company has been informed by the Stock Exchange of Thailand that certain shareholders do not qualify for entitling to dividends because of the non-compliance with the regulation in respect of nationality of the shareholders. The company therefore has reversed the dividends payable declared before December 1996 amounting to Baht 24 million for the six-month period ended 30 June 1999 which the company has recognised as other income of Baht 17 million in the first quarter and Baht 7 million in the second quarter. 13 Cash and cash equivalents Cash and cash equivalents consist of cash in hand, at banks and in transit and loans to financial institutions for periods not exceeding three months as follows: Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht Cash in hand, at banks and in transit 185,261,281 56,814,490 183,042,048 53,873,172 Short-term investments 50,000,000 58,000,000 50,000,000 58,000,000 235,261,281 114,814,490 233,042,048 111,873,172 14 Related party transactions During the period the company enters into a number of transactions with subsidiaries and related companies as follows: Subsidiaries a) Purchases of goods from Singer Industries (Thailand) Limited totalling Baht 80,593,640 (1998 : Baht 43,374,270). The transfer price is determined at cost plus gross margin. b) Sales of goods to S.T.L. Electronics Limited totalling Baht 4,440,844 (1998 : nil). The transfer price is determined at cost plus gross margin. c) Interest income on loans to the following subsidiaries: - Singer Industries (Thailand) Limited of Baht 3,995,753 (1998 : Baht 6,154,033). The loan balance at 30 June 1999 amounted to Baht 70 million (1998 : Baht 87 million) bearing interest at the rate of 9.5% per annum (1998 : 15% per annum). - S.T.L. Electronics Limited of Baht 1,968,644 (1998: 1,762,203). The loan balance at 30 June 1999 amounted to Baht 34 million (1998 : Baht 24 million) bearing interest at the rate of 9.5% per annum (1998 : 16% per annum). Related companies a) Purchases of goods from related companies abroad totalling Baht 6,222,338 (1998: Baht 31,917,495). The purchase price has been negotiated between the company and its related companies. b) Trademark license fee totalling Baht 2,043,083 (1998 : Baht 2,389,946) payable to a related company abroad, calculated at 0.1% of total net sales in accordance with signed agreement. (More)