FINANCIAL STATEMENTS FOR THE YEAR ENDED 1999

29 กุมภาพันธ์ 2543
HAAD THIP PUBLIC COMPANY LIMITED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND REPORT OF CERTIFIED PUBLIC ACCOUNTANT EXPRESSED IN Thai Baht REPORT OF CERTIFIED PUBLIC ACCOUNTANT To The Shareholders of Haad Thip Public Company Limited I have audited the balance sheet of Haad Thip Public Company Limited as at December 31, 1999, and the related statements of income, changes in shareholders' equity,retained earnings and cash flows for the year then ended. The financial statements for the year ended December 31,1998, which are presented for comparative purposes, were audited by Mr.Prasit Musikabhantu, an auditor in my firm. These financial statements are the responsibility of the Company's management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards in Thailand. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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 financial statements referred to above present fairly, in all material respects, the financial position of Haad Thip Public Company Limited as at December 31, 1999 and 1998, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles in Thailand. - 2 - Without qualifying my opinion, I draw attention to Note 14 to the financial statements, which summarizes the effects of the current economic crisis in Thailand and Asia Pacific region on the Company. The accompanying financial statements reflect management's current assessment of the impact to date of the economic situation on the financial position of the Company. Actual results could differ from managment's current assessment. VICHIEN THAMTRAKUL C.P.A. (THAILAND) Registration No. 3183 Bangkok February 10, 2000 HAAD THIP PUBLIC COMPANY LIMITED BALANCE SHEETS DECEMBER 31, 1999 AND 1998 A S S E T S In Baht 1999 1998 CURRENT ASSETS Cash on hand and in banks 16,133,584 16,650,072 Accounts and notes receivable - trade (Note 4) 71,183,082 71,392,089 Less allowance for doubtful accounts ( 2,679,926) ( 1,127,741) Accounts and notes receivable - trade - net 68,503,156 70,264,348 Inventories - net (Note 5) 60,209,686 51,311,722 Other current assets Claim and other receivables - net 25,087,816 25,316,306 Prepaid expenses 5,849,458 6,479,763 Others 670,803 320,966 Total other current assets 31,608,077 32,117,035 Total Current Assets 176,454,503 170,343,177 ADVANCES AND LOANS TO DIRECTORS AND EMPLOYEES 1,902,277 1,770,822 INVESTMENT IN SHARES - Net (Note 6) 2,839,913 3,239,913 PROPERTY, PLANT AND EQUIPMENT - At Cost; net of accumulated depreciation (Note 7) 558,198,988 612,696,713 OTHER ASSETS Land not used in operations - at cost; net of allowance for impairment loss of Baht 0.5 million in 1999 60,231,812 60,731,812 Refundable deposits and others 2,599,429 3,621,005 Total Other Assets 62,831,241 64,352,817 TOTAL ASSETS 802,226,922 852,403,442 See accompanying Notes to Financial Statements. (With Mr.Vichien Thamtrakul's report dated February 10,2000) HAAD THIP PUBLIC COMPANY LIMITED BALANCE SHEETS DECEMBER 31, 1999 AND 1998 LIABILITIES AND SHAREHOLDERS' EQUITY In Baht 1999 1998 CURRENT LIABILITIES Bank overdraft and loans from financial institutions (Note 8) 64,871,720 60,456,953 Accounts payable - trade 93,440,179 112,133,313 Current portion of long-term loan (Note 9) 1,495,000 799,728 Other current liabilities Accounts payable - others 10,713,775 14,110,817 Accrued bonus - 14,274,646 Dividend payable (Note 10) 16,601,500 - Income tax payable 20,148,151 28,037,828 Others 11,227,978 15,059,570 Total other current liabilities 58,691,404 71,482,861 Total Current Liabilities 218,498,303 244,872,855 DEPOSITS RECEIVED FROM CUSTOMERS AND OTHERS 143,197,645 167,394,265 LONG-TERM LOAN - Net of Current Portion (Note 9) 5,779,582 7,197,609 Total Liabilities 367,475,530 419,464,729 SHAREHOLDERS' EQUITY Share capital Authorized - 25,000,000 shares; Baht 10 par value 250,000,000 250,000,000 Issued and fully paid up - 16,601,500 shares 166,015,000 166,015,000 Premium on share capital 154,727,500 154,727,500 Retained earnings Appropriated Legal reserve (Note 10) 16,457,404 14,706,620 General reserve 19,000,000 16,000,000 Unappropriated 78,551,488 81,489,593 Total Shareholders' Equity 434,751,392 432,938,713 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 802,226,922 852,403,442 See accompanying Notes to Financial Statements. (With Mr. Vichien Thamtrakul's report dated February 10, 2000) HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 In Baht 1999 1998 REVENUES Net sales 1,215,784,608 1,372,299,597 Other income Reversal of unclaimed customers' deposits 17,850,555 9,593,698 Others 5,552,799 7,033,590 Total other income 23,403,354 16,627,288 Total Revenues 1,239,187,962 1,388,926,885 COSTS AND EXPENSES Cost of sales 834,396,667 927,872,824 Selling and administrative expenses 345,195,777 360,356,564 Interest expense 4,225,718 8,883,438 Directors' remuneration 200,000 200,000 Total Costs and Expenses 1,184,018,162 1,297,312,826 INCOME BEFORE INCOME TAX 55,169,800 91,614,059 INCOME TAX ( 20,154,121) ( 28,061,486) NET INCOME 35,015,679 63,552,573 Earnings per Share 2.11 3.83 See accompanying Notes to Financial Statements. (With Mr.Vichien Thamtrakul's report dated February 10,2000) HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 In Baht 1999 1998 SHARE CAPITAL - Common shares Balance, beginning of year 166,015,000 166,015,000 Increase during the year - - Balance, end of year 166,015,000 166,015,000 PREMIUM ON SHARE CAPITAL Balance, beginning of year 154,727,500 154,727,500 Increase during the year - - Balance, end of year 154,727,500 154,727,500 RETAINED EARNINGS Appropriated Legal reserve Balance, beginning of year 14,706,620 11,528,992 Increase during the year (Note 10) 1,750,784 3,177,628 Balance, end of year 16,457,404 14,706,620 General reserve Balance, beginning of year 16,000,000 13,000,000 Increase during the year (Note 10) 3,000,000 3,000,000 Balance, end of year 19,000,000 16,000,000 Unappropriated Balance, beginning of year 81,489,593 73,919,148 Increase during the year 35,015,679 63,552,573 Decrease during the year ( 37,953,784) ( 55,982,128) Balance, end of year 78,551,488 81,489,593 TOTAL SHAREHOLDERS' EQUITY 434,751,392 432,938,713 See accompanying Notes to Financial Statements. (With Mr. Vichien Thamtrakul's report dated February 10, 2000) HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF RETAINED EARNINGS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 In Baht 1999 1998 UNAPPROPRIATED RETAINED EARNINGS: Beginning of year 81,489,593 73,919,148 Less appropriation of net income for previous year: (Note 10) General reserve ( 3,000,000) ( 3,000,000) Dividend ( 16,601,500) ( 24,902,250) Interim dividend (Note 10) ( 16,601,500) ( 24,902,250) Net income for the year 35,015,679 63,552,573 Appropriation for legal reserve for the year (Note 10) ( 1,750,784) ( 3,177,628) Total Unappropriated Retained Earnings 78,551,488 81,489,593 APPROPRIATED RETAINED EARNINGS: Legal reserve 16,457,404 14,706,620 General reserve 19,000,000 16,000,000 Total Appropriated Retained Earnings 35,457,404 30,706,620 TOTAL RETAINED EARNINGS 114,008,892 112,196,213 See accompanying Notes to Financial Statements. (With Mr. Vichien Thamtrakul's report dated February 10, 2000) HAAD THIP PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 In Baht 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net income 35,015,679 63,552,573 Reconciliation of net income to net cash provided by (used in) operating activities: Bad debts expense and provision 1,860,067 - for doubtful accounts Provision (reversal of provision) for obsolete inventories ( 244,612) 436,667 Increase in allowance for decline in value of investments 400,000 262,647 Provision for impairment loss on land not usedin operations 500,000 - Depreciation and amortization 73,809,591 81,634,086 Loss on sales of investment in shares - 347,863 Gain on sales of fixed assets ( 654,524) ( 643,624) Promotion materials amortized and book value of containers written off 14,141,961 21,641,740 Reversal of unclaimed customers deposits ( 17,850,555) ( 9,593,698) Net cash provided by operating activities before changes in operational assets and liabilities 106,977,607 157,638,254 Decrease (increase) in operational assets Accounts and notes receivable - trade 209,007 ( 5,336,687) Inventories ( 8,653,352) 8,414,261 Claim and other receivables ( 79,392) 1,194,457 Prepaid expenses 630,305 ( 205,685) Other current assets ( 349,837) ( 103,326) Refundable deposits and others 472,809 ( 4,117,669) -2- In Baht 1999 1998 Increase (decrease) in operational liabilities Accounts payable - trade ( 18,693,134) ( 10,342,657) Accounts payable - others ( 3,397,042) 2,163,364 Accrued bonus ( 14,274,646) ( 1,074,356) Income tax payable ( 7,889,677) 18,325,333 Other current liabilities ( 3,831,592) 1,607,740 Customers' deposits and others ( 6,346,065) 7,674,052 Net Cash Provided by Operating Activities 44,774,991 175,837,081 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in property, plant and equipment ( 32,757,536) ( 80,614,090) Proceeds from sales of fixed assets 507,000 1,215,000 Net Cash Used in Investing Activities ( 32,250,536) ( 79,399,090) CASH FLOWS FROM FINANCING ACTIVITIES: Decrease (increase) in advances and loans to directors and employees ( 131,455) 90,591 Decrease in loans from banks ( 5,000,000) ( 30,000,000) Decrease in long - term loan ( 722,755) - Payment of dividends ( 16,601,500) ( 66,406,000) Net Cash Used in Financing Activities ( 22,455,710) ( 96,315,409) NET INCREASE (DECREASE) IN CASH AND CASH QUIVALENTS ( 9,931,255) 122,582 Cash and Cash Equivalents, Beginning of Year 6,193,119 6,070,537 CASH AND CASH EQUIVALENTS, END OF YEAR ( 3,738,136) 6,193,119 -3- In Baht 1999 1998 ADDITIONAL INFORMATION FOR CASH FLOWS: 1.Cash and Cash Equivalents consisted of: Cash on hand and in banks 16,133,584 16,650,072 Bank overdraft ( 19,871,720) ( 10,456,953) Net ( 3,738,136) 6,193,119 2.Cash Paid During the Year for: Interest expense 5,777,811 8,549,674 Income tax 28,043,798 9,736,153 See accompanying Notes to Financial Statements. (With Mr. Vichien Thamtrakul's report dated February 10, 2000) HAAD THIP PUBLIC COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 1. GENERAL Haad Thip Public Company Limited was established as a public company and is being listed on the Stock Exchange of Thailand. The Company is engaged in the manufacturing and distribution of soft drink. At the end of the year 1999, the Company has 1,682 employees. The registered office of the Company is located at 87/1, Kanchanavanich Road, Thambol Banphru, Amphur Hadyai, Songkhla, Thailand. 2. BASIS OF FINANCIAL STATEMENT PREPARATION The Company maintains its official accounting records in Thai Baht and prepares its statutory financial statements in the Thai language in conformity with financial accounting standards in Thailand, which may not conform with generally accepted accounting principles in other countries. The accompanying financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Thailand. Accordingly, these financial statements are not designed for those who are not informed about Thai accounting principles and practices. For the convenience of the reader, an English translation of financial statements has been prepared from the statutory Thai language financial statements which are issued for domestic reporting purposes. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Income Recognition The Company recognizes income from sales upon delivery and products and issuance of tax invoice. Allowance for Doubtful Accounts The Company provides allowance for doubtful accounts equal to the estimated losses that may be incurred in the collection of receivables. The estimated losses are based on a review of the current status of the existing receivables. - 2 - Inventories Inventories are valued at the lower of cost (first-in, first-out method) or net realizable value. Investments Long-term general investments are valued at cost, net of allowance for decline in value of investments. Impairment of Assets Starting from January 1, 1999, the Company has adopted the accounting for impairment of assets as required by a newly effective Accounting Statement No. 36 issued by the Institute of Certifiled Accountants and Auditors of Thailand. Investment, property and equipment and other assets are reviewed for impairment whenever events or changes in circumstances indicate that the recoverable amount of assets is below their carrying amount. A reversal of impairment loss is recognized as income whenever the carrying amount of an asset exceeds its recoverable amount, and such a reversal should not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the assets in prior periods. Depreciation and Amortization The Company depreciates its property, plant and equipment acquired prior to 1990 and containers by the declining balance method. Assets acquired since 1990 are depreciated by the straight-line method over the estimated useful lives of the assets. The difference of depreciation between the straight-line method and declining balance method is not materialas. The useful lives of the assets are determined as follows: No. fo Years Land improvements 10 Buildings 20 Leasehold improvements 4 Machinery and equipment 5 and 20 Furniture and office equipment 5 and 10 Vehicles 5 Containers 5 - 3 - Promotion materials are amortized by the straight-line method over a period of five (5) years upon use in the operations. Deferred charges pertaining to advertising and sale promotion expenses are amortized by the straight-line method over the term of agreements. The amortization charges for 1999 and 1998 and the unamortized balances as at December 31,1999 and 1998 are not material. Income tax The Company records income tax based on the amount currently payable under the Revenue Code. Earnings per Share Earnings per share is determined by dividing the net income by the weighted average number of paid-up shares outstanding during the years (16,601,500 shares). 4. ACCOUNTS AND NOTES RECEIVABLE - Trade Long-outstanding balances of the accounts and notes receivable as at December 31, 1999 were as follows: Amount (In Million Baht) Over 3 months to 6 months 1.7 Over 6 months to 12 months 1.8 Over 12 months 3.3 Total 6.8 As at December 31, 1999, the Company provided allowance for doubtful accounts equal to the estimated losses that may be incurred in the collection of receivables (which are based on a review of the current status of the existing receivables) amounting to approximately Baht 2.7 million which mainly represented the receivables from modern trade. - 4 - 5. INVENTORIES In Baht 1999 1998 Finished goods 38,612,022 28,495,073 Less allowance for obsolescence ( 192,055) ( 436,667) Finished goods - net 38,419,967 28,058,406 Work in process 42,022 - Raw materials and packing materials 8,411,120 8,986,164 Spare parts and factory supplies 7,903,152 8,636,362 Promotion materials 5,433,425 5,630,790 Net 60,209,686 51,311,722 6. INVESTMENT IN SHARES Percentage of In Baht Holdings 1999 1998 Long-term general investments Sky Packs Company Limited 19 1,140,000 1,140,000 Songkhla Thai Canadian Venture Company Limited 0.37 200,000 200,000 Bangkok Hatyai Hospital Company Limited 0.66 3,300,000 3,300,000 Phuket Island Public Company Limited 0.01 40,000 40,000 Total 4,680,000 4,680,000 Less allowance for decline in value (1,840,087) (1,440,087) Net 2,839,913 3,239,913 7. PROPERTY, PLANT AND EQUIPMENT - At Cost In Baht Balance as at Movement during the year Balance as at January 1, 1999 Addition Deduction December 31,1999 Cost Land 147,160,641 147,160,641 (more)