"UNAUDITED"
"REVIEWED"
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS
MARCH 31, 2001
1. EFFECT OF ECONOMIC CRISIS
Since 1997, until now 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. At present, the economic crisis is
being relaxed but it may still affect the future company's operations.
At March 31, 2001 the current liabilities were Baht 1,112.17 million higher
than current assets for consolidated financial statements (Baht 1,154.45 million for the
Company's financial statements). The Company has incurred loss for several consecutive
years with total deficit as at March 31, 2001 amounting to Baht 970.54 million and net
loss for the three-month period ended March 31, 2001 amounting to Baht 88.44 million.
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 affected the financial statements in the foreseeable future.
Nevertheless, these consolidated financial statements and financial statements
have been prepared in accordance with generally accepted accounting principles based on going
concern assumption. Therefore, the asset value has not been adjusted at a salable price, and
the liabilities have not been adjusted according to the amount to be repaid, and the accounts
have not been reclassified thereof may be necessary if the Company and its subsidiaries are
not able to carry on continuously the operations.
2. INTERIM FINANCIAL STATEMENTS PREPARATION BASIS
The accompanying interim 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.
"UNAUDITED"
"REVIEWED"
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3. PRINCIPLES OF CONSOLIDATION
3.1 The consolidated financial statements include the financial statements of The
Union Mosaic Industry Public Company Limited and Subsidiaries as follows:
Percentage of holding
(% of share capital)
As at March As at March
Type of Business 31, 2001 31, 2000
Cermas Co.,Ltd. Sale of mineral and soil 21.55 21.55
UMI Property Co.,Ltd. Real estate 37.5666 37.5666
Ruampat Ceramic Co.,Ltd. Ceramic Agent 49 49
Siam Art Ceramic Co.,Ltd. Designed ceramic 7.5 7.5
UMI International Co.,Ltd. Consumer products 40 40
2.1 These consolidated financial statements are prepared by including the financial
statements of its subsidiaries under control by The Union Mosaic Industry Public Company
Limited. These financial statements are prepared under the equity method after eliminating
inter-company transactions between The Union Mosaic Industry Public Company Limited and its
subsidiaries. Investments in other companies in which The Union Mosaic Industry Public Company
Limited has significant influence are shown as "Investments in affiliated company" under the
equity method. Except for the aforementioned investments are shown as "Investments in other
companies" under the cost method.
2.2 Transactions between The Union Mosaic Industry Public Company Limited and its subsidiaries
have been eliminated under the equity method as if The Union Mosaic Industry Public Company
Limited owns 100 per cent shareholding in those subsidiaries and the interest of other shareholders
is shown as "Minority Interest"
2.3 These consolidated financial statements are prepared according to the requirements of the
Stock Exchange of Thailand with the objective to show the consolidated financial position of The
Union Mosaic Industry Public Company Limited and its subsidiaries, and the consolidated results
of their operations only. The usefulness of these financial statements for other purposes may
be limited due to the difference in types of business of those consolidated companies.
"UNAUDITED"
"REVIEWED"
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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4.1 Revenues and Expenses Recognition
Revenues and Expenses are recorded on an accrual basis. Revenue from sales are
recognized as revenue when the delivery of goods is made.
4.2 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.
4.3 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.
A subsidiary valued its finished goods at the lower of weighted average cost or net
realizable value. Raw material - Granite is valued at cost by specific method.
Another subsidiary valued its office condominium units for sale at the lower of cost
or net realizable value.
4.4 Property, plant and equipment
Land is valued at appraised value. Plant and equipment are stated at cost less
accumulated depreciation.
Subsidiaries' property, plant and equipment are stated at cost less accumulated
depreciation.
Property, plant and equipment are depreciated on a straight-line method over the
estimated useful lives of the assets as follows :-
Building 20Years
Office improvements and fixture 20Years
Machinery 5-15Years
Furniture and office equipment 5Years
Other fixed assets 5Years
4.5 Deferred charges
Deferred charges 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.
"UNAUDITED"
"REVIEWED"
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4.6 Impairment of Assets
The Company has considered the impairment of assets - land, building and equipment
including intangible assets whenever events or change indicated that the carrying amount
of assets exceeded its net realizable value. The Company will consider the impairment for
each asset item or each asset unit generating cash flows, whichever is practical.
In case that the carrying amount of an asset exceeds its net realizable value, the
Company will recognize as impairment loss in the statements of income for the period. The
Company will reverse the impairment loss whenever there is an indication that there is no
longer impairment or reduction in impairment by recording as "other income".
4.7 Foreign Currency Transactions
The Company records the transactions in foreign currencies throughout the year at
the rates prevailing at the date of transactions. Assets and liabilities denominated in
foreign currencies at the balance sheets date are translated into Thai Baht at the prevailing
rates at those dates. Gains or losses from translation are credited or charged to current
operations. Transactions covered by forward exchange contract are translated into Thai Baht
at the forward contract rates. Premium on forward contract is amortized over the period of
the forward contract.
The Company has policy to protect exchange rate risk for loans denominated in foreign
currencies by making forward exchange contracts for part of loans and interest denominated in
foreign currencies. The amount of credit covers the debt repayment due in the next year to
reduce such exchange rate risk.
4.8 Investments
Investments in subsidiaries companies and associated company are recorded under the
equity basis.
Securities available for sales and debt instruments held to maturity are carried
at fair value less allowance for impairment of investments. The differences between book
value and fair value are presented as unrealized gain or loss in the shareholders' equity.
Premiums or discounts are amortized be the straight-line method over the term of the related
securities.
Other investments are stated at cost less allowance for impairment in value. The
devaluation of investment is present as impairment loss of investment, which reflected in
the statement of income.
Cost of short-term and long-term investments sold during the period were computed
by the weighted average method.
"UNAUDITED"
"REVIEWED"
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4.9 Capitalization of Interest
Borrowing cost are capitalized as cost of assets that the Company has incurred
borrowing cost on assets that required a period of time to get them ready for sale.
Capitalization of borrowing cost will stop when such assets are ready for their intended use.
4.10 Corporate Income tax
The Company records income tax expense, if any, based on the amount currently
payable under the Revenue Code.
4.11 Use of estimates in the preparation of financial statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses and disclosure of
contingent assets and liabilities. Actual results could differ from those estimates.
5. SHORT - TERM INVESTMENT
Baht
The Company s balance sheet only
As at March As at December
31, 2001 31, 2000
Cash at bank - -
Temporary investments 713,250.00 794,600.00
Total 713,250.00 794,600.00
The consolidation information was not presented due to insufficient information.
Temporary investments consist of :
Baht
The Company s balance sheet only, 2001
Available Other Total
for sale securities
Equity securities 713,250.00 - 713,250.00
Equity securities -
investment units - - -
Total 713,250.00 - 713,250.00
The consolidation information was not presented due to insufficient information.
"UNAUDITED"
"REVIEWED"
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6. ACCOUNTS AND NOTES RECEIBVABLE
As at March 31, 2001 and December 31, 2000, the Company's delinquent accounts
receivable classified by aging are as follows :
Baht
The Company s balance sheets only
As at March As at December
312,001 31, 2000
Over 3 months - 6 months 134,661,721.61 94,689,491.96
Over 6 months - 12 months 7,400,561.11 2,561,539.56
Over 12 months 23,415,451.19 22,999,591.35
Less Allowance for doubtful -28,131,933.79 -28,131,933.79
Net 137,345,800.12 92,118,689.08
The Management of the Company and subsidiaries believed that the allowance for doubtful
accounts equal to the amount of excepted uncollectible.
The consolidation information was not presented due to insufficient information.
7. INVENTORIES
Baht
The Company s balance sheets only
As at March As at December
31, 2001 31, 2000
Finished goods 258,024,440.14 282,552,025.49
Work in process 48,990,926.62 38,236,654.23
Raw materials 82,430,003.19 95,365,929.57
Supply 49,420,267.73 47,871,406.03
Goods in transit 13,611,787.31 9,218,531.37
Total 452,477,424.99 473,244,546.69
The consolidation information was not presented due to insufficient information.
"UNAUDITED"
"REVIEWED"
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8. INVESTMENTS
8.1 Investments in subsidiaries consist of :
Company s name Type of Paid-up Capital Holding Relationship Cost Method Th
Business (Baht) portion (Baht) Equity Method (Baht)
March 31, 2001 December 31, 2000
Subsidiaries
Cermas Co.,Ltd. Sale of mineral Shareholding
and soil 8,000,000.00 21.55% and director 1,224,500.00 1,579,855.86 1,574,205.72 -
UMI Property Co.,Ltd. Real estate Shareholding
150,000,000.00 37.57% and director 56,350,000.00 46,287,788.39 49,570,845.69 -
Ruampat Ceramic Ceramic Agent Shareholding
Co.,Ltd. 20,000,000.00 49.00% and director 9,800,000.00 14,372,178.08 14,318,136.00 -
Siam Art Ceramic Designed ceramic Shareholding
Co.,Ltd. 110,000,000.00 7.50% and director 8,250,000.00 8,680,635.69 8,427,626.82 -
UMI International consumer products Shareholding
Co.,Ltd. 25,000,000.00 40.00% and director 10,000,000.00 7,347,819.14 8,512,101.62 -
Total investments in subsidiaries 85,624,500.00 78,268,277.16 82,402,915.85 -
The Company has shareholding in associated and other companies up to 7.50% - 49.00%
of share capital of such subsidiaries and is able to control through majority committee of such
companies. Such companies, therefore, are considered to be subsidiaries, according to According
Standard no. 44 "Consolidated Financial Statements and Accounting for Investments in Subsidiaries".
For the first quarter of 2001
(1) To the interim financial statements, for the consolidated interim financial statements, the
consolidated interim financial statements include the accounts of the Company and five (5)
subsidiaries which were reviewed by other auditors. Total assets of such subsidiaries as at
March 31, 2001 amounted to approximately Baht 471.83 million (18.23% of the consolidated
total assets).
(2) For the interim financial statements of the Company only, the Company recorded its
investments in shares of five subsidiaries by the equity method, which were computed from
the financial statements of these subsidiaries for the three-month period ended March 31, 2001,
which were review by other auditors. As at March 31, 2001, the investments in these subsidiaries
totalled approximately Baht 78.27 million (3.70% of total assets), and the equity in net loss of
these subsidiaries for the three-month period ended March 31, 2001 totalled approximately Baht
4.13 million (4.68% of net loss).
