THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND 1997
Baht
1998 1997
Cash flows from operating activities
Net profit (loss) (54,484,172) 4,195,740
Items to reconcile net income to cash flows from operating activities
Depreciation 220,247,808 240,968,241
Allowance for doubtful accounts 22,462,754 5,669,180
Amortization of other assets 144,366 144,365
Profit on sale of property, plant and equipment (403,746) (505,778)
Unappropriated net loss of associated companies 37,456,859 25,641,640
Unrealized gain on exchange 51,370,032 (530,312,404)
Profit on sale of investment from associated companies 0 (6,741,792)
Unrealized loss from devaluation of investments in common share 32,229,227 4,910,390
Income from operations before changes in operating assets and liabilities 309,023,128 (256,030,418)
Operating assets (increase) decrease
Short - term investments (12,453,392) (37,201,110)
Accounts and notes receivable 129,466,185 (31,096,440)
Investments in related companies (2,793) 16,080
Inventories 77,624,996 (92,933,148)
Deposits 210,976 0
Deposits with commitment (5,011,000) (25,000,000)
Other current assets 542,718 (5,472,408)
Other assets 384,341 8,932,161
Operating liabilities increase (decrease)
Accounts payable (141,038,935) (5,405,276)
Accrued expenses (42,125,711) (624,377)
Other current liabilities (6,091,328) 16,622,191
Net cash provided by operating activities 310,529,185 (428,192,745)
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Baht
1998 1997
Cash flows from investing activities
Investments in associated and other companies (increase) 0 22,994,000
Proceeds from sale of property, plant and equipment 883,182 505,782
Payment for property, plant and equipment (42,713,095) (170,465,242)
Net cash used by investing activities (41,829,913) (146,965,460)
Cash flows from financing activities
Bank overdrafts and loans from financial institutions increase (decrease) (4,530,021) 57,956,586
Long - term debt increase (decrease) (264,372,994) 517,920,000
Net cash used by financing activities (268,903,015) 575,876,586
Cash and cash equivalents increase (203,743) 718,381
Cash and cash equivalents increase at January 1, 890,896 172,515
Cash and cash equivalents increase at December 31, 687,153 890,896
Supplemental disclosures of cash flow information :
1. Cash paid during the year for :
Interest 153,328,748 95,782,403
2. Cash and cash equivalents consist of cash in hand and at banks.
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1998 AND 1997
1. EFFECT OF ECONOMIC CRISIS
In 1997, Thailand and overall Asia Pacific countries have encountered economic crisis reluting 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, 1998 has the excess of current
liabilities over current assets of Baht 270,997,498.10. 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 sheet and
statements of income for the Public Company Limited.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 Revenue recognition
Revenues and expenditures 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 which do not exceed the rates prescribed by the Revenue Code.
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 cost deducting by accumulated amortization under concession period.
Excess of cost over book value of investments in associated companies is recognized as goodwill and
amortized on a straight-line basis within 10 years.
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3.5 Transactions in foreign currencies
3.5.1 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.
3.5.2 On July 2, 1997, the Ministry of Finance announced a change in the exchange rate system for Thai
Baht to a Managed Float system, loss from assets and liabilities conversion for th period ended September 30, 1997
is recorded as deferred loss by using Managed Float system and presented as a deduction with shareholders equity.
The company will amortized such expense within 5 years compliance with to the instruction of the Revenue
Department no. 72/1997 which has not prepared in conformity with generally accepted accounting principles.
3.5.3 From December 31, 1997, the company changed the recording of loss from assets and liabilities
conversion in foreign currency from recorded as deferred loss note in 3.5.2 to recognized as expenses in the
statements of income in conformity with the generally accepted accounting principles.
3.6 Investment Valuation
Investments in listed securities and unit trust are stated at the lower of aggregate cost or aggregate market
value. Market value is the closing prices prevailing by the Stock Exchange of Thailand at the end of period.
Market value of mutual fund are stated at their book value as at the end of the period.
Investments in associated companies are stated under equity method
Investments in other companies are stated at cost, except for investment in company which has the capital
deficiency. The company has provision for doubtful accounts in accordance with he criteria of committees.
3.7 Capitalization of Interest
Borrowing costs are capitalized to be 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.
3.8 Earnings (Loss) per share
Earnings (Loss) per share are determined by dividing net profit (loss) by the number of shares
outstanding at the end of the year.
4.CASH IN HAND AND AT BANKS Baht
1998 1997
Cash 100,727.75 100,000.00
Current accounts 325,997.81 774,594.09
Savings deposit 260,427.44 16,301.82
Total 687,153.00 890,895.91
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5.SHORT - TERM INVESTMENTS
Short term investments consist of the following :
Baht
1998 1997
Cash at banks 3,280,192.97 35,000,000.00
Deposits at financial institutions 51,900,000.00 18,116,862.54
Investments in listed securities and unit trust 12,230,245.04 1,003,760.00
Total 67,410,438.01 54,120,622.54
Investments in listed securities consist of the following :
Baht
1998 1997
Listed securities and unit trust 24,359,438.44 17,487,568.45
Less Allowance for diminution in value of securities (12,129,193.40) (16,483,808.45)
Total 12,230,245.04 1,003,760.00
6. ACCOUNTS AND NOTES RECEIVABLE
85 and 118 receivables in 1998 and 1997, which have repayment problem on as follows:
Baht
1998 1997
Over 3 months - 6 months 37,064,497.62 13,527,587.58
Over 6 months - 12 months 8,394,531.50 7,122,469.46
Over 12 months 16,170,976.20 7,534,517.60
Total 61,630,005.32 28,184,574.64
The company provides the allowance for doublful accounts amount of Baht 22,462,753.83 in 1998 (In 1997,
the amount was Baht 5,669,179.96)
7. INVENTORIES Baht
1998 1997
Finished goods 297,818,224.43 344,575,112.73
Work in process 14,198,208.75 17,935,214.14
Raw materials 90,184,472.12 108,048,679.50
Supply used 38,695,208.66 40,216,595.84
Goods in transit 2,114,190.56 9,859,698.78
Total 443,010,304.52 520,635,300.99
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8. INVESTMENTS IN RELATED COMPANIES
Investments in common shares consist of : 1998
Baht
TYPE OF PAID-UP HOLDING COST EQUITY
BUSINESS CAPITAL % METHOD METHOD
BAHT BAHT BAHT
Associated companies
TEKNO CER S.R.L Supplier 428,000.00 45.00 192,600.00 192,600.00
Co., Ltd.
Cermas Co., Ltd. Sale of feldspar and soil 8,000,000.00 21.55 1,224,500.00 169,163.18
UMI Property Co., Ltd. Real estate 150,000,000.00 37.57 56,350,000.00 1,146,109.23
Ruampat Ceramic Ceramic Agent 20,000,000.00 49.00 9,800,000.00 13,800,314.23
Co., Ltd.
Total investments in associated companies 67,567,100.00 15,308,186.64
Cost Method
Other companies
UMI-Laufen Producer of Sanitaryware 430,000,000.00 11.04 33,065,650.21
Sanitaryware Ltd.
Less Provision for diminution in value of investments (33,065,650.21) 0.00
Siam Art Ceramic Seller of Ceramic 110,000,000.00 7.50 8,250,000.00
Co., Ltd.
Surf Dynamics Co., Ltd. Water Sports Equipment 14,000,000.00 14.28 2,000,000.00
Total investments in other companies 10,250,000.00
Total investments in related companies 25,558,186.64
1997
Baht
TYPE OF PAID-UP HOLDING COST EQUITY
BUSINESS CAPITAL % METHOD METHOD
BAHT BAHT BAHT
Associated companies
TEKNO CER S.R.L Supplier 428,000.00 45.00 192,600.00 192,600.00
Co., Ltd
Cermas Co., Ltd Sale of feldspar and 8,000,000.00 21.55 1,224,500.00 619,635.22
soil
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1997
Baht
TYPE OF PAID-UP HOLDING COST EQUITY
BUSINESS CAPITAL % METHOD METHOD
BAHT BAHT BAHT
UMI Property Co., Ltd Real estate 150,000,000.00 37.57 56,350,000.00 38,843,445.95
Ruampat Ceramic Ceramic Agent 20,000,000.00 49.00 9,800,000.00 13,109,364.61
Co., Ltd.
Total investments in associated companies 67,567,100.00 52,765,045.78
Other companies Cost Method
UMI-Laufen Sanitaryware Producer of 430,000,000.00 11.04 33,065,650.21
Ltd. Sanitaryware
Siam Art Ceramic Co., Ltd. Seller of Ceramic 110,000,000.00 7.50 8,250,000.00
Surf Dynamics Co., Ltd. Water Sports 14,000,000.00 14.28 2,000,000.00
Equipment
Total investments in other companies 43,315,650.21
Total investments in related companies 96,080,695.99
8.1 Investment in associated companies
Investment in TEKNO CER S.R.L. Co., Ltd. is valued at cost method, because of insufficient information
to state under equity method. Such investment has no material to the position and the results of company's operation.
Net profit (loss) of three associated companies for the year ended December 31, 1998, brought into the
computation of investment under equity method, were taken from unaudited financial statements. (In 1997, there
were four associated companies).
8.2 Investment in other companies
Investment in UMI-Laufen Sanitaryware Ltd. had book value lower than cost as at December 31, 1997
of Baht 97.50 million. As at December 31, 1998, the company provided the allowance for declining in value of
investments of Baht 33,065,650.21. The company believed that the declining in value of investment is impermanent
and its operation will be recovered in the near future. In addition, the major shareholder agrees to provide additional
fund in the future and plans to expand the operations.
9.DEPOSITS WITH COMMITMENT
Fixed deposit of Baht 30,011,000.00 as at December 31, 1998 (in 1997, Baht 25 million) is used as collateral for
bank overdraft and loans from financial institutions as mentioned in note no.12 and for bank's issuance of letter
of guarantee to the Metropolitan Power Authority by bank for electricity usage.
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