The Board of Directors Haad Thip Public Company Limited We have made a review of the balance sheets of Haad Thip Public Company Limited as at June 30, 1998 and 1997, and the related statements of income, retained earnings and changes in shareholders equity for the three-month and six-month periods then ended and the statements of cash flows for the three-month and six-month periods ended June 30, 1998, in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. A review of interim financial statements consists principally of obtaining an understanding of the system for the preparation of interim financial statements, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with generally accepted accounting principles. PRASIT MUSIKABHANTU C.P.A. (THAILAND) Registration No. 2675 August 5, 1998 "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED BALANCE SHEETS JUNE 30, 1998 AND 1997 A S S E T S In Thousand Baht 1998 1997 CURRENT ASSETS Cash on hand and in banks 18,434 18,044 Accounts and notes receivable - trade (Note 2) 59,943 40,764 Less allowance for doubtful accounts ( 1,128) ( 855) Accounts and notes receivable - trade - net 58,815 39,909 Inventories - net 93,589 54,215 Other current assets Claim and other receivables - net 12,940 21,789 Prepaid expenses 8,746 13,944 Others 164 814 Total other current assets 21,850 36,547 Total Current Assets 192,688 148,715 ADVANCES AND LONES TO DIRECTORS AND EMPLOYEES 1,693 1,410 INVESTMENT IN SHARES - NET (Note 4) 3,502 3,850 PROPERTY, PLANT AND EQUIPMENT - At Cost; net of accumulated depreciation 657,386 681,962 OTHER ASSETS Promotion materials - net 22,101 25,273 Deferred charges and others 5,305 2,345 Total Other Assets 27,406 27,618 TOTAL ASSETS 882,675 863,555 see accompanying Notes to Interim Financial Statements. "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED BALANCE SHEETS JUNE 30, 1998 and 1997 LIABILITIES AND SHAREHOLDERS,EQUITY In Thousand Baht 1998 1997 CURRENT LIABILITIES Bank overdrafts and loans from financial institutions 64,625 135,715 Accounts payable - trade 115,618 87,357 Current portion of long-term loan - 6,250 Other current liabilities Accounts payable - others 12,990 12,045 Accrued bonus 11,910 7,699 Income tax payable 26,859 16,809 Others 14,573 14,365 Total other current liabilities 66,332 50,918 Total Current Liabilities 246,575 280,240 DEPOSITS RECEIVED FROM CUSTOMERS AND OTHERS 171,270 167,940 LONG-TERM LOAN 7,997 - Total Liabilities 425,842 448,180 SHAREHOLDERS EQUITY Share capital Authorized - 25,000,000 shares; Baht 10 par value 250,000 250,000 Issued and fully paid up - 16,601,500 shares 166,015 166,015 Premium on share capital 154,728 154,728 Retained earnings Appropriated Legal reserve (Note 5) 11,529 8,587 General reserve 16,000 13,000 Unappropriated 108,561 73,045 Total Shareholders Equity 456,833 415,375 TOTAL LIABILITIES AND SHAREHOLDERS EQUOTY 882,675 863,555 See accompanying Notes to Interim Financial Statements. "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF INCOME FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 1998 AND 1997 In Thousand Baht Three-Month Periods Six-Month Periods Ended June 30 Ended June 30 1998 1997 1998 1997 REVENUES Net sales 412,739 355,517 827,650 684,859 Other income Reversal of unclaimed customers deposits 2,398 998 4,797 1,996 Others 2,553 3,115 4,405 5,537 Total other income 4,951 4,113 9,202 7,533 Total Revenues 417,690 359,630 836,852 692,392 COSTS AND EXPENSES Cost of sales 272,638 223,565 551,145 438,554 Selling and administrative expenses 102,966 95,525 191,324 189,901 Interest expense 2,066 4,156 4,970 8,685 Total Costs and Expenses 377,670 323,246 747,439 637,140 INCOME BEFORE INCOME TAX 40,020 36,384 89,413 55,252 INCOME TAX (12,020) (11,248) (26,869) (16,839) NET INCOME 28,000 25,136 62,544 38,413 Earnings per Share (Baht) 1.69 1.51 3.77 2.31 See accompanying Notes to Interim Financial Statements. "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF RETAINED EARNINGS FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 1998 AND 1997 In Thounsand Baht Three-Month Periods Six-Month Periods Ended June 30 Ended June 30 1998 1997 1998 1997 UNAPPROPRIATED RETAINED EARNINGS : Beginning of period 80,561 65,360 73,919 52,083 Less appropriation of net income for previous year: (Note 5) Legal reserve - ( 850) - ( 850) General reserve - - (3,000) - Dividend - (16,601) (24,902) (16,601) Net income for the period 28,000 25,136 62,544 38,413 Total Unappropriated Retained Earnings 108,561 73,045 108,561 73,045 APPROPRIATED RETAINED EARNINGS : Legal reserve 11,529 8,587 11,529 8,587 General reserve 16,000 13,000 16,000 13,000 Total Appropriated Retained Earnings 27,529 21,587 27,529 21,587 TOTAL RETAINED EARNINGS 136,090 94,632 136,090 94,632 See accompanying Notes to Interim Financial Statements. "UNAUDITED" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF CHANGE IN SHAREHOLDERS EQUITY FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 1998 AND 1997 In Thounsand Baht Three-Month Periods Six-Month Periods Ended June 30 Ended June 30 1998 1997 1998 1997 SHARE CAPITAL Common shares Balance, beginning of period 166,015 166,015 166,015 166,015 Increase during the period - - - - Balance, end of period 166,015 166,015 166,015 166,015 PREMIUM ON SHARE CAPITAL Balance, beginning of period 154,728 154,728 154,728 154,728 Increase during the period - - - - Balance, end of period 154,728 154,728 154,728 154,728 RETAINED EARNINGS Appropriated Legal reserve Balance, beginning of period 11,529 7,737 11,529 7,737 Increase during the period (Note 5) - 850 - 850 Balance, end of period 11,529 8,587 11,529 8,587 General reserve Balance, beginning of period 13,000 13,000 13,000 13,000 Increase during the period (Note 5) 3,000 - 3,000 - Balance, end of period 16,000 13,000 16,000 13,000 Unappropriated Balance, beginning of period 80,561 65,360 73,919 52,083 Increase during the period 28,000 25,136 62,544 38,413 Decrease during the period - ( 17,451) ( 27,902) ( 17,451) Balance, end of period 108,561 73,045 108,561 73,045 TOTAL SHAREHOLDERS EQUITY 456,833 415,375 456,833 415,375 See accompanying Notes to Interim Financial Statements. "UNAUDITER" "REVIEWED" HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 1998 In Thousand Baht Three-Month Period Six-Month Period Ended June 30 Ended June 30 CASH FLOWS FROM OPERATING ACTIVITIES: Net income 28,000 62,544 Reconciliations of net income to net cash provided by (used in) operating activities: Depreciation and amortization 20,209 40,069 Loss on sales of investment in shares 348 348 Gain on sales of fixed assets (313) (313) Promotion materials amortized and book value of containers written off 5,884 11,594 Reversal of unclaimed customers deposits (2,398) (4,796) Decrease in accounts and notes receivable-trade 10,777 6,112 Increase in inventories (35,048) (33,426) Decrease in claim and other receivables 20,098 13,571 Increase in prepaid expenses (4,584) (2,472) Decrease in other current assets 109 54 Increase in promotion materials (2,668) (2,668) Increase in deferred charges and others (17) (1,692) Decrease in accounts payable - trade (23,878) (6,858) Increase in accounts payable - others 120 1,043 Decrease in accrued bonus (6,905) (3,439) Increase in income tax payable 2,300 17,147 Increase (decrease) in other current liabilities (3,192) 1,120 Increase in customers deposits and others 3,594 6,752 Net Cash Provided by Operating Activities 12,436 104,690 (More)