THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
AUDITOR'S REPORT AND FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1999 AND 1998
AUDITOR'S REPORT
To The Shareholders of
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
I have audited the balance sheet of THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED as
at December 31,1999 and 1998, and related statements of income, statements of changes in shareholders' equity, statements
of retained earnings and statements of cash flows for the years then ended. 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 the financial statements based on my audits.
Except for the matters mentioned in the following paragraphs, I conducted my audits in accordance with generally
accepted auditing standards. Those standards require that I plan and perform the audit to obtain the 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 principle
used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe
that my audit provides a reasonabale basis for my opinion.
As mentioned in note 8.1, the unaudited financial statements of three associated companies were represented under
equity method and prepared by the company's management. Investment in such associated companies were 0.72 and 0.63
per cent of total assets and net (gain) loss sharing of (0.09) and 69.34 per cent ending December 31, 1999 and 1998, respectively.
In my opinion, except for the effect of adjustment on the financial statements in 1999 and 1998 regarding the
presentation of the investment in three associated companies under equity method were computed from the unaudited financial
statements by other auditors as mentioned in the third paragraph, the financial statements referred to the above present fairly,
in all material respects, the financial position of the UNION MOSIAC INDUSTRY PUBLIC COMPANY LIMITED as at
December 31,1999 and 1998 and the results of its operation, changes in shareholders' equity and cash flows for the years
then ended in conformity with generally accepted accounting principles.
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I draw your attention to the following notes to financial statements:
1. As stated in notes to financial statements no.1, the effect of adverse economic crisis in Thailand and overall Asia-
Pacific resulting from the currency devaluation and the economic slowdown. The business engaged in real estate in which
the company operating, have severely affected from the above situation and may continue to be affected for the foreseeable future.
2. As stated in notes to financial statements no. 10, the company has temporarily suspended the project under
construction - factory expansion having the investment value amount of Baht 367.95 million in 1999, and amount of Baht 366.97
million in 1998 due to the economic fluctuation and slowdown in the real estate business as stated in note 1. However, the
company expects to take benefit in the future when the economic is recovered.
3. As shown in the financial statements, the result of the company's operation incurred loss for three consecutive years
having the total unappropriated deficit of Baht 599.74 million and Baht 302.19 million in 1999 and 1998, respectively. The
shareholders' equity as at December 31, 1999 and 1998 shown the outstanding balance of Baht 459.74 million and 814.71 million,
respectively, but the management expects that the company's operation will be recovered in the future.
4. As stated in notes to financial statements no. 14, regarding to long-term liabilities, the company entered into
additional loan agreement which incurred current portion of long-term debt amount of Baht 781.07 million and Baht 460.28
million in 1999 and 1998, respectively. Up to now, the company has not made principles repayment upon the new agreement
because of the company is under the proceed of debt restructuring.
The aforementioned notes to financial statements may possibly be affected to the continuity of company's operation.
These financial statements have been prepared as the company's going concern. Therefore, the financial statements do not include
any adjustment of assets and liabilities that might be arise from the uncertainties which cannot be presently determined.
Office of D I A International Auditing
(Mrs. Vilairat Rojnuckarin)
C.P.A. (Thailand)
Registration No. 3104
February 25, 2000
(Except, note to financial statements no. 10 dated February 28, 2000).
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
BALANCE SHEETS
AS AT DECEMBER 31, 1999 AND 1998
Assets 1999 Baht 1998
(Adjustment)
Current assets
Cash in hand and at banks (note 4) 7,997,908.06 687,153.00
Short-term investments (note 5) 36,461,954.47 67,410,438.01
Accounts and notes receivable (note 6) 327,557,947.50 275,282,118.62
Less Allowance for doubtful accounts (28,131,933.79) (28,131,933.79)
Accounts and notes receivable - net 299,426,013.71 247,150,184.83
Short-term loans 0.00 17,928.00
Inventories (note 7) 463,353,379.60 443,010,304.52
Other current assets
Advance 3,746,036.11 2,881,962.09
Revenue Department - receivable 4,461,477.17 0.00
Refundable custom tax 2,510,522.67 2,142,938.36
Prepaid expenses 6,002,569.43 4,247,979.55
Other 1,381,056.86 1,325,149.59
Total current assets 825,340,918.08 768,874,037.95
Investments in related companies - net (note 8) 25,839,149.95 25,558,186.64
Deposits with commitment (note 9) 30,000,000.00 30,011,000.00
Property, plant and equipment - net (note 10) 1,287,803,854.97 1,537,169,203.86
Deposit (note 11) 773,400.00 46,395,274.19
Other assets (note 12) 3,967,212.42 4,100,466.90
Total assets 2,173,724,535.42 2,412,108,169.54
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
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Liabilities and shareholders' equity 1999 Baht 1998
(Adjustment)
Current liabilities
Bank overdrafts and loans from bank (note 13) 421,620,545.53 441,515,782.72
Accounts payable 213,119,369.51 104,609,708.23
Current portion of long-term debt (note 14) 781,066,600.00 460,278,000.00
Accrued expenses 33,970,795.22 21,204,883.94
Other loan payables 10,000,000.00 10,000,000.00
Other current liabilities 1,072,936.84 2,263,161.16
----------------- -----------------
Total current liabilities 1,460,850,247.10 1,039,871,536.05
Long-term liabilities (note 14) 253,129,400.00 557,522,000.00
----------------- -----------------
Total liabilities 1,713,979,647.10 1,597,393,536.05
----------------- -----------------
Shareholders' equity
Share capital
Authorized share capital
50,000,000 ordinary shares of Baht 10 each 500,000,000.00 500,000,000.00
Issued and paid-up capital
32,000,000 ordinary shares of Baht 10 each 320,000,000.00 320,000,000.00
Premium on share capital 498,800,000.00 498,800,000.00
Appraisal surplus of land 207,515,676.00 266,102,532.00
Unrealized (gain) loss from changing fair
value of investments (note 15) 1,173,000.00 0.00
Retained earnings (Deficit)
Appropriated
Legal reserve 32,000,000.00 32,000,000.00
Unappropriated (599,743,787.68) (302,187,898.51)
Total shareholders' equity 459,744,888.32 814,714,633.49
Total liabilities and shareholders' equity 2,173,724,535.42 2,412,108,169.54
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1999 AND 1998
1999 Baht 1998
(Adjustment)
Revenues
Sales 1,259,048,899.71 1,279,545,522.30
Other income
Gain (Loss) on foreign exchange rate (17,970,505.26) 254,248,154.76
Others 37,679,604.28 32,499,653.20
----------------- -----------------
Total revenues 1,278,757,998.73 1,566,293,330.26
----------------- -----------------
Expenses
Cost of sales 1,160,969,202.24 1,185,517,793.76
Selling and administrative expenses 199,739,436.31 205,001,032.37
Unrealized loss from valuation of investment in common share 0.00 32,229,227.10
Loss from impairment of assets 23,545,375.13 0.00
Loss from non-refundable deposits 45,284,230.58 0.00
Unappropriated net (gain) loss of
associated companies on equity (280,963.31) 37,456,859.14
----------------- -----------------
Total expenses 1,429,257,280.95 1,460,204,912.37
Profit (Loss) before interest expenses (150,499,282.22) 106,088,417.89
----------------- -----------------
Interest expenses 147,056,606.95 160,106,026.79
----------------- -----------------
Net profit (loss) (297,555,889.17) (54,017,608.90)
----------------- -----------------
Earnings (Loss) per share (9.30) (1.69)
Dividend per share - -
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999 AND 1998
1999 Baht 1998
(Adjustment)
Share capital
Common shares
Beginning of the period 320,000,000.00 320,000,000.00
----------------- -----------------
End of the period 320,000,000.00 320,000,000.00
----------------- -----------------
Paid-in capital
Premium on share capital
Beginning of the period 498,800,000.00 498,800,000.00
----------------- -----------------
End of the period 498,800,000.00 498,800,000.00
----------------- -----------------
Appraisal surplus of land
Beginning of the period 266,102,532.00 266,102,532.00
Decrease during the period (58,586,856.00) 0.00
----------------- -----------------
End of the period 207,515,676.00 266,102,532.00
----------------- -----------------
Unrealized (gain) loss from changing fair
value of investments (note 15) 1,173,000.00 0.00
Retained earnings (Deficit)
Appropriated
Legal reserve
Beginning of the period 32,000,000.00 32,000,000.00
----------------- -----------------
End of the period 32,000,000.00 32,000,000.00
----------------- -----------------
Unappropriated
Beginning of the period (302,187,898.51) (248,170,289.61)
Net profit (loss) (297,555,889.17) (54,017,608.90)
----------------- -----------------
End of the period (599,743,787.68) (302,187,898.51
----------------- -----------------)
Total shareholders' equity 459,744,888.32 814,714,633.49
----------------- -----------------
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
STATEMENTS OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND 1998
1999 Baht 1998
(Adjustment)
Unappropriated retained earnings (deficit)
Beginning balance (297,326,951.45) (242,842,779.42)
Cumulative effects from change in accounting policy (4,860,947.06) (5,327,510.19)
----------------- -----------------
Beginning balance after adjustments (302,187,898.51) (248,170,289.61)
Less Net profit (loss) for the period (297,555,889.17) (54,017,608.90)
----------------- -----------------
Total unappropriated retained earnings (deficit) (599,743,787.68) (302,187,898.51)
Appropriated retained earnings (deficit) 32,000,000.00 32,000,000.00
----------------- -----------------
Total retained earnings (deficit) (567,743,787.68) (270,187,898.51)
----------------- -----------------
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND 1998
1999 Baht 1998
(Adjustment)
Cash flows from operating activities
Net profit (loss) (297,555,889.17) (54,017,608.90)
Adjustment to reconcile net profit to cash receipt (disbursement)
from operating activities
Depreciation 175,877,777.84 220,247,807.51
Amortization of other assets 144,365.52 144,365.52
Amortization of factory deposit 413,243.61 0.00
Doubtful accounts 0.00 22,462,753.83
Loss from impairment of assets 23,545,375.13 0.00
Loss from non-refundable deposits 45,284,230.58 0.00
(Gain) Loss from sale of property, plant and equipment (183,948.93) (403,745.85)
Unrealized (gain) loss from valuation of investment in common share 0.00 32,229,227.10
(Gain) loss on exchange rate 16,948,223.26 (250,453,467.60)
Unappropriated net (profit) loss of associated companies on equity (280,963.31) 37,456,859.14
----------------- -----------------
Profit (Loss) from operations before change in assets and liabilities (35,807,585.47) 7,666,190.75
Operating assets (increase) decrease
Short-term investment 32,121,483.54 (12,453,392.36)
Accounts and notes receivable (52,913,934.90) 129,585,690.62
Short-term loans 17,928.00 (2,793.00)
Inventories (20,343,075.08) 77,624,996.47
Deposit (75,600.00) 210,975.81
Other current assets (7,503,632.65) 542,718.27
Deposit with commitment 11,000.00 (5,011,000.00)
Other assets (11,111.04) (82,222.31)
Operating liabilities increase (decrease)
Accounts payable 111,464,844.04 (141,038,934.30)
Accrued expenses 12,765,911.28 (42,125,710.89)
Other current liabilities (1,190,224.32) (6,091,327.72)
----------------- -----------------
Net cash provided by (used in) operating activities 38,536,003.40 8,825,191.34
----------------- -----------------
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1999 Baht 1998
(Adjustment)
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 198,261.68 883,181.83
Purchase property, plant and equipment (8,658,972.83) (42,713,095.17)
----------------- ----------------
Net cash provided by (used in)investing activities (8,460,711.15) (41,829,913.34)
----------------- ----------------
Cash flows from financing activities
Increase (Decrease) in bank overdrafts and loans from bank (22,764,537.19) 32,800,979.09
----------------- ----------------
Net cash provided by (used in) financing activities (22,764,537.19) 32,800,979.09
----------------- ----------------
Increase (Decrease) in cash and cash equivalents 7,310,755.06 (203,742.91)
Cash and cash equivalents items at January 1, 687,153.00 890,895.91
----------------- ----------------
Cash and cash equivalents items at December 31, 7,997,908.06 687,153.00
----------------- ----------------
Supplemental disclosures of cash flow information :
1. Cash paid during the year for :
Interest expenses 144,476,908.81 181,526,324.05
2. For the purpose of preparing the statement of cash flow, cash and cash equivalent items include cash in hand and
cash at banks which are due within 3 months.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1999 AND 1998
1. EFFECT OF ECONOMIC CRISIS
In 1997, Thailand and overall Asia Pacific countries have encountered economic crisis resulting from the currency devaluation
and economic slowdown. The real estate business has been adversely affected. The company's sales has dramatically dropped. The
financial statement of the company as at December 31, 1999 and 1998 has the excess of current liabilities over current assets of Baht
635,509,329.02 and amount of Baht 270,997,498.10, respectively. However, the company has been solving these problems and
expected to continue its operation as a going concern. These financial statements reflect the assessment of the company's current
status. In addition, the uncertainties, which cannot be presently determined, may have affect to the financial statements in the
foreseeable future.
2. FINANCIAL STATEMENTS PREPARATION BASIS
The accompanying financial statements have been prepared in conformity with the Department Regulation of the Ministry of
Commerce no. 7 (B.E. 2539) dated October 25, 1996, regarding the form of balance sheets and statements of income for the
Public Company Limited and conformed with the generally accepted accounting principles of Thailand.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 Revenues and Expenses Recognition
Revenues and expenses are recorded on an accrual basis. Revenue from sales are recognized as revenue when the delivery
of good is made.
3.2 Allowance for Doubtful Accounts
The company provides allowance for doubtful accounts equal to the amount of expected uncollectible receivable which
are based on management evaluation of ability to pay of each receivable.
3.3 Inventory Valuation
Finished goods and work in process are valued at the lower of cost or net realizable value. Raw materials and supplies
are valued at cost by the average basis.
3.4 Depreciation and Amortization
Property, plant and equipment are depreciated on a straight-line method over the estimated useful lives of the assets as
follows :-
- Building 20 years
- Machinery 5-15 years
- Other fixed assets 5 years
Deferred expense are suspended base on the benefit basis and amortized on a straight-line basis within 1-5 years.
Concession fee is stated at net cost of amortization on a concession period.
Excess of cost over book value of investments in associated companies assums as goodwill is amortized on a straight-line
basis within 10 years.
3.5 Transactions in foreign currencies
The company records its transactions in foreign currencies converting into Thai Baht by using the exchange rates ruling
on the transaction dates. The outstanding balances of accounts in foreign currencies as at the balance sheet's date are converted into
Thai Baht by using the exchange rates ruling on the same day.
Gains or Loss on exchange are taken into income or expense as incurred.
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3.6 Investments
(more)
