THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
AUDITOR'S REPORT AND FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1998 AND 1997
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 31,1998, and related statements of income, statements of changes in shareholders' equity, retained earnings
and cash flows for the year then ended. These financial statements are the responsibility of these 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 audit. The financial statements for the year ended December 31, 1997 which were presented for comparison
purpose, was audited by other auditor and expressed an qualified opinion, regarding the uncertainties from calculation of
unappropriated net profit (loss) of an associated company which was taken from unaudited financial statements by other
auditor on the report dated 20th February 1998.
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.
I was appointed auditor on April 29, 1998 so that I was unable to perform physical count of ending inventories as at
December 31, 1997 amount of Baht 520,635,300.99, which was the beginning inventories of the year 1998. I also was unable
to apply other auditing procedures satisfactorily in such amount of beginning inventories of the year 1998.
As mentioned in note 8.1, the unaudited financial statements as at December 31, 1998 of three associated companies
were represented under equity method and prepared by the company's management. Investment in such associated companies
were 0.63 per cent of total assets and loss sharing of 68.75 per cent of net loss ending December 31, 1998.
In my opinion, firstly except for the results of necessary adjustment on the Profit and Loss Statement for the year
1998, if I had observed the physical count of inventories as stated in the third paragraph. Secondly, except for the effect of
adjustment on the 1998 financial statements 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 fourth 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, 1998 and the results of its operation,changes in
shareholders'equity and its cash flows for the year then ended in conformity with generally accepted accounting principles.
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 countries resulting from the currency devaluation and the economic slowdown. The company operates the real estate
business, which is 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 with the investment value amount of Baht 366.97 million 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 stated in notes to financial statements no. 10, the excess value of land appraisal of Baht 266,102,532.00 is land
pre-appraisal in 1996 by the independent appraiser. Up to now, the company has not reappraised of such land. Due to economic
crisis in Thailand having much affect to the real estate business, it is uncertain whether the recent appraisal value of land will be
equal to current appraisal value. Morever, the result of the company's operation incurred net loss for three consecutive years
with unappropriated deficit of Baht 297,326,951.45. The shareholders' equity as at December 31, 1998 showed the outstanding
balance of Baht 819,575,580.55, but the management expects that the company will have better operation in the future.
4. As stated in notes to financial statements no. 13, regarding to long-term loan, the company had modified the loan
agreement with the first instalment due in 1998 totalling Baht 153,426,000.00 and current portion of long-term debt amount of
Baht 306,852,000.00. Up to now, the company has not made repayment upon the new agreement since the company is
negotiating to decrease the interest rate and extend term of principal repayment.
The aforementioned notes to financial statements may possibly continue to be affect the 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 possibly incurred 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 18, 1999
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
BALANCE SHEET
AS AT DECEMBER 31, 1998 AND 1997
Baht
Current assets Assets 1998 1997
Cash in hand and at banks (note 4) 687,153.00 890,895.91
Short-term investments (note 5) 67,410,438.01 54,120,622.54
Accounts and notes receivable (note 6) 274,778,253.14 404,244,438.30
Less Allowance for doubtful accounts (28,131,933.79) (5,669,179.96)
Accounts and notes receivable - net 246,646,319.35 398,575,258.34
Short-term loans 17,928.00 15,135.00
Inventories (note 7) 443,010,304.52 520,635,300.99
Other current assets 10,598,029.59 11,140,747.86
Total current assets 768,370,172.47 985,377,960.64
Investments in related companies - net (note 8) 25,558,186.64 96,080,695.99
Deposits with commitment (note 9) 30,011,000.00 25,000,000.00
Property, plant and equipment - net (note 10) 1,537,169,203.86 1,715,183,352.18
Deposit 46,395,274.19 46,606,250.00
Other assets (note 11) 8,961,413.96 9,490,120.30
Total assets 2,416,465,251.12 2,877,738,379.11
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
- 2 -
Baht
Liabilities and shareholders' equity 1998 1997
Current liabilities
Bank overdrafts and loans from financial institutions (note 12) 441,515,782.72 446,045,803.63
Accounts payable 104,150,842.75 244,872,739.19
Current portion of long-term debt (note 13) 460,278,000.00 351,380,800.00
Accrued expenses 21,204,883.94 63,330,594.83
Other loan payables 10,000,000.00 10,000,000.00
Other current liabilities 2,218,161.16 8,309,488.88
Total current liabilities 1,039,367,670.57 1,123,939,426.53
Long-term liabilities (note 13) 557,522,000.00 879,739,200.00
Total liabilities 1,596,889,670.57 2,003,678,626.53
Shareholders' equity
Share capital
Registered 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
Unrealized increment per land appraisal 266,102,532.00 266,102,532.00
Retained earnings (Deficit)
Appropriated
Legal reserve 32,000,000.00 32,000,000.00
Unappropriated (297,326,951.45) (242,842,779.42)
Total shareholders' equity 819,575,580.55 874,059,752.58
Total liabilities and shareholders' equity 2,416,465,251.12 2,877,738,379.11
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, 1998 AND 1997
Baht
1998 1997
Revenues
Sales 1,279,545,522.30 1,651,677,642.85
Other income
Gain (Loss) on exchange rate 254,248,154.76 (1,181,320.39)
Other income 32,499,653.20 94,342,057.82
Total revenues 1,566,293,330.26 1,744,838,380.28
Expenses
Cost of sales 1,185,517,793.76 1,371,585,173.75
Unappropriated net loss of associated companies 37,456,859.14 25,641,640.26
Selling and administrative expenses 205,467,595.50 229,158,032.14
Interest expenses 160,106,026.79 109,347,404.76
Unrealized loss from investment in common share 32,229,227.10 4,910,390.00
Total expenses 1,620,777,502.29 1,740,642,640.91
Net profit (loss) before extraordinary item (54,484,172.03) 4,195,739.37
Extraordinary items
Loss from exchange rate by using manage float system (note 15) 0.00 (530,312,404.25)
Net profit (loss) (54,484,172.03) (526,116,664.88)
Earnings (Loss) per share
Net profit (loss) before extraordinary items (1.70) 0.13
Extraordinary items 0.00 (16.57)
Net profit (loss) (1.70) (16.44)
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1998 AND 1997
Baht
1998 1997
Share capital
Common shares
Beginning of the year 320,000,000.00 320,000,000.00
Ending of the year 320,000,000.00 320,000,000.00
Paid-in capital
Premium on share capital
Beginning of the year 498,800,000.00 498,800,000.00
Ending of the year 498,800,000.00 498,800,000.00
Unrealized increment per land appraisal
Beginning of the year 266,102,532.00 266,102,532.00
Ending of the year 266,102,532.00 266,102,532.00
Retained earnings (Deficit)
Appropriated
Legal reserve
Beginning of the year 32,000,000.00 32,000,000.00
Ending of the year 32,000,000.00 32,000,000.00
Unappropriated
Beginning of the year (242,842,779.42) 283,273,885.46
Net profit (loss) (54,484,172.03) (526,116,664.88)
Ending of the year (297,326,951.45) (242,842,779.42)
Total shareholders' equity 819,575,580.55 874,059,752.58
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND 1997
Baht
1998 1997
Unappropriated retained earnings (deficit)
Beginning Balance (242,842,779.42) 283,273,885.46
Less Net profit (loss) for the year (54,484,172.03) (526,116,664.88)
Total unappropriated retained earnings (deficit) (297,326,951.45) (242,842,779.42)
Appropriated retained earnings (deficit) 32,000,000.00 32,000,000.00
Total retained earnings (deficit) (265,326,951.45) (210,842,779.42)
Notes to financial statements are parts of these financial statements.
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