THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
AUDITOR'S REPORT AND FINANCIAL STATEMENTS
AS AT JUNE 30, 1999 AND 1998
UNAUDITED/REVIEWED ONLY
AUDITOR'S REPORT
To The Shareholders of
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
I have reviewed the balance sheets of THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED as at June
30, 1999 and 1998, and related statements of income, statements of changes in shareholders' equity, retained earnings and statements of
cash flows for the three months and six months then ended. Our review was made in accordance with standards prescribed by the
Institute of Certified Accountants and auditors of Thailand.
Investments in four associated companies were recorded under equity method, for the six months ended June 30, 1999 and
1998, were taken from their respective unreviewed financial statements. Investment in the aforementioned associated companies of the
company which has shareholding of 0.70 per cent and 1.21 per cent of total assets, respectively. The company's profit (loss) from
investments represented 3.20 per cent and 0.62 per cent in 1999 and (6.84) per cent and (196.51) per cent in 1998 of net profit (loss) for
the three months and six months, respectively.
An interim review of the financial statements mostly comprises the study of financial statements preparation system, the
analytical review of financial information and the inquiries made among the company's staff whose duties are relevant to the company's
finance and accounting. Such a review normally has more limitations than generally accepted auditing standards for an auditor to
express his opinion on the financial statements. We, therefore, cannot express our opinion on the financial statements that we have only
reviewed due to the aforementioned reason.
However, during our review of the aforementioned financial statements except for limited scope mentioned in the second
paragraph, we have not found any material discrepancies that need to be adjusted in the interim financial statements in conformity with
the 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
of expansion part at factory with the investment value amount of Baht 368.22 million in 1999, and amount of Baht 361.18 million
in 1998, due to the economic volatility as stated in note 1 and slowdown in the real estate business. However, the company expects
to take benefit in the future when the economic is recovered.
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3. As stated in notes to financial statements no. 10, appraisal surplus of land Baht 266,102,532.00 represents surplus
from reappraisal of land in 1996 by the independent appraiser. Up to now, the company has no reappraise on such land. Due to
economic crisis in Thailand having much affect to the real estate business, it is uncertain whether the value of land will be equal
to current appraisal value. Moreover, the result of the company's operation incurred net loss for three consecutive years with
unappropriated deficit of Baht 437,827,625.76 in 1999 and Baht 253,206,919.38 in 1998. Consequently, the shareholders' equity as
at June 30, 1999 and 1998 showed the outstanding balance of Baht 679,074,906.24 and Baht 863,695,612.62, respectively, but
the management expects that the company will have better operation in the future.
4. As stated in notes to financial statements no. 14, regarding to long-term liabilities, the company had modified the loans
agreement by having current portion of long-term debt in 1999 and 1998 amount of Baht 615,212,240.00 and Baht 345,609,960.00,
respectively. 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.
5. As stated in notes to financial statements no. 11, the deposit for machinery of Baht 45.5 million in 1999 and Baht 45.7
million in 1998. The company has suspended to purchase machinery due to the economic volatility as stated in note 1. The company
has not provided the allowance for doubtful accounts of such deposit. The management believes that when the economic is recovered,
the company will able to purchase machinery.
Office of D I A International Auditing
(Mrs. Vilairat Rojnuckarin)
C.P.A. (Thailand)
Registration No. 3104
August 13, 1999
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
BALANCE SHEETS
AS AT JUNE 30, 1999 AND 1998
UNAUDITED/REVIEWED ONLY
Current assets Assets 1999 Baht 1998
Cash in hand and at banks (note 4) 11,135,738.97 14,534,131.19
Short-term investments (note 5) 67,871,364.88 96,426,832.97
Accounts and notes receivable (note 6) 316,119,955.48 356,284,261.16
Less Allowance for doubtful accounts (28,131,933.79) (20,978,619.10)
Accounts and notes receivable - net 287,988,021.69 335,305,642.06
Short-term loans 6,570.00 11,385.00
Inventories (note 7) 373,041,471.30 452,384,815.48
Other current assets
Advance 3,705,706.44 3,689,379.90
Other 10,630,436.24 8,364,895.68
Total current assets 754,379,309.52 910,717,082.28
Investments in related companies - net (note 8) 26,433,456.47 59,181,136.59
Deposits with commitment (note 9) 30,011,000.00 25,000,000.00
Property, plant and equipment - net (note 10) 1,453,771,614.08 1,631,483,931.12
Deposit (note 11) 46,273,888.66 46,467,757.50
Other assets (note 12) 12,863,329.95 9,458,377.19
Total assets 2,323,732,598.68 2,682,308,284.68
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
Current liabilities
Bank overdrafts and loans from financial institutions (note 13) 394,110,765.58 430,444,348.11
Accounts payable 190,064,666.50 186,070,163.29
Current portion of long-term debt (note 14) 615,212,240.00 345,609,960.00
Accrued expenses 27,619,076.16 58,133,108.54
Other loan payables 10,000,000.00 10,000,000.00
Other current liabilities
Payable - Revenue Department 0.00 291,181.64
Unearned revenue 2,777,684.20 1,861,870.48
Other 67,500.00 18,000.00
Total current liabilities 1,239,851,932.44 1,032,428,632.06
Long-term liabilities (note 14) 404,805,760.00 786,184,040.00
Total liabilities 1,644,657,692.44 1,818,612,672.06
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
Appraisal surplus of land 266,102,532.00 266,102,532.00
Retained earnings (Deficit)
Appropriated
Legal reserve 32,000,000.00 32,000,000.00
Unappropriated (437,827,625.76) (253,206,919.38)
Total shareholders' equity 679,074,906.24 863,695,612.62
Total liabilities and shareholders' equity 2,323,732,598.68 2,682,308,284.68
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
UNAUDITED/REVIEWED ONLY
April - June January - June
1999 Baht 1998 1999 Baht 1998
Revenues
Sales 308,085,447.71 310,844,702.71 572,240,936.65 766,157,808.23
Other income
Gain (Loss) on foreign exchange rate 19,299,314.94 (85,224,181.20) (1,222,393.49) 120,883,818.67
Other income 10,257,554.70 3,146,329.52 15,695,673.94 17,567,454.29
Total revenues 337,642,317.35 228,766,851.03 586,714,217.10 904,609,081.19
Expenses
Cost of sales 292,537,635.69 301,981,320.50 568,184,397.23 691,237,490.81
Unappropriated net loss (gain) of
associated companies on equity (1,112,613.84) 13,775,864.99 (875,269.83) 20,366,734.29
Selling and administrative expenses 45,412,983.93 63,512,264.49 85,810,828.58 116,114,892.80
Interest expenses 35,529,504.38 34,384,717.66 74,094,935.43 70,721,278.14
Other expenses 0.00 16,532,825.11 0.00 16,532,825.11
Total expenses 372,367,510.16 430,186,992.75 727,214,891.41 914,973,221.15
Net profit (loss) (34,725,192.81) (201,420,141.72) (140,500,674.31) (10,364,139.96)
Earnings (loss) per share (1.09) (6.29) (4.39) (0.32)
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 THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
UNAUDITED/REVIEWED ONLY
April - June January - June
1999 Baht 1998 1999 Baht 1998
Share capital
Common shares
Beginning of the period 320,000,000.00 320,000,000.00 320,000,000.00 320,000,000.00
Ending of the period 320,000,000.00 320,000,000.00 320,000,000.00 320,000,000.00
Paid-in capital
Premium on share capital
Beginning of the period 498,800,000.00 498,800,000.00 498,800,000.00 498,800,000.00
Ending of the period 498,800,000.00 498,800,000.00 498,800,000.00 498,800,000.00
Appraisal surplus of land
Beginning of the period 266,102,532.00 266,102,532.00 266,102,532.00 266,102,532.00
Ending of the period 266,102,532.00 266,102,532.00 266,102,532.00 266,102,532.00
Retained earnings (Deficit)
Appropriated
Legal reserve
Beginning of the period 32,000,000.00 32,000,000.00 32,000,000.00 32,000,000.00
Ending of the period 32,000,000.00 32,000,000.00 32,000,000.00 32,000,000.00
Unappropriated
Beginning of the period (403,102,432.95) (51,786,777.66) (297,326,951.45) (242,842,779.42)
Net profit (loss) (34,725,192.81) (201,420,141.72) (140,500,674.31) (10,364,139.96)
Ending of the period (437,827,625.76) (253,206,919.38) (437,827,625.76) (253,206,919.38)
Total shareholders' equity 679,074,906.24 863,695,612.62 679,074,906.24 863,695,612.62
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
STATEMENTS OF RETAINED EARNINGS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
UNAUDITED/REVIEWED ONLY
April - June January - June
1999 Baht 1998 1999 Baht 1998
Unappropriated retained earnings (deficit)
Beginning Balance (403,102,432.95) (51,786,777.66) (297,326,951.45) (242,842,779.42)
Less Net profit (loss) for the period (34,725,192.81) (201,420,141.72) (140,500,674.31) (10,364,139.96)
Total unappropriated retained
earnings (deficit) (437,827,625.76) (253,206,919.38) (437,827,625.76) (253,206,919.38)
Appropriated retained earnings (deficit) 32,000,000.00 32,000,000.00 32,000,000.00 32,000,000.00
Total retained earnings (deficit) (405,827,625.76) (221,206,919.38) (405,827,625.76) (221,206,919.38)
Notes to financial statements are parts of these financial statements.
THE UNION MOSAIC INDUSTRY PUBLIC COMPANY LIMITED
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
UNAUDITED/REVIEWED ONLY
April - June January - June
1999 Baht 1998 1999 Baht 1998
Cash flows from operating activities
Net profit (loss) (34,725,192.81) (201,420,141.72) (140,500,674.31) (10,364,139.96)
Items to reconcile net income to cash flows
from operating activities
Depreciation 43,918,439.39 59,092,193.27 87,493,748.99 117,818,899.50
Allowance for doubtful
accounts increase 0.00 15,386,489.31 0.00 15,309,439.14
Provision for diminution in value of
investment 0.00 16,532,825.11 0.00 16,532,825.11
Amortization of other assets 36,091.38 36,091.38 72,182.76 72,182.76
(Profit) Loss on sales of property, plant
and equipment 12,311.75 217,534.31 12,311.75 (412,839.78)
(Gain) on sales of securities (1,419,245.13) 0.00 (1,419,245.13) 0.00
Unappropriated net (profit) loss of
associated companies on equity (1,112,613.84) 13,775,864.99 (875,269.83) 20,366,734.29
Unrealized (gain) loss on exchange rate (19,136,295.75) 84,786,652.79 2,166,082.56 252,884,999.57
Unrealized (gain) loss from increment
of securities (1,598,571.91) 1,615,110.00 (1,768,971.91) 338,120.00
Profit (loss) from operations before changes in
operating assets and liabilities (14,025,076.92) (9,977,380.56) (54,819,835.12) 412,546,220.63
Operating assets (increase) decrease
Short - term investments (7,326,552.79) (36,016,000.00) 2,727,290.17 (42,644,330.43)
Accounts and notes receivable (26,291,907.71) 89,129,337.27 (41,341,702.34) 47,960,177.14
Short - term loans 6,429.00 1,875.00 11,358.00 3,750.00
Inventories (5,472,644.85) (12,741,346.69) 69,968,833.22 70,625,485.51
Deposits 137,505.03 12,292.50 121,385.53 12,292.50
Other current assets (3,042,185.45) (791,618.66) (3,738,113.09) (89,527.72)
Other assets (3,475,120.91) (394,877.30) (3,974,098.75) (738,239.65)
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April - June January - June
1999 Baht 1998 1999 Baht 1998
Operating liabilities increase (decrease)
Accounts payable 76,884,552.62 (19,527,413.90) 86,353,891.19 (59,720,075.47)
Accrued expenses 1,855,188.15 16,983,696.58 6,414,192.22 (5,197,486.29)
Other current liabilities (4,105,448.93) (10,999,623.51) 627,023.04 (6,138,436.76)
Net cash provided by (used in)
operating activities 15,144,737.24 15,678,940.73 62,350,224.07 416,619,829.46
Cash flows from investing activities
Proceeds from sale of property, plant
and equipment 2,000.00 177,272.73 2,000.00 842,727.28
Payment for property, plant and equipment (1,886,564.14) (18,930,429.70) (4,110,470.96) (36,924,365.94)
Net cash provided by (used in)
investing activities (1,884,564.14) (18,753,156.97) (4,108,470.96) (36,081,638.66)
Cash flows from financing activities
Bank overdrafts and loans from financial
institutions increase (decrease) (7,486,253.75) 14,730,489.88 (47,793,167.14) (27,882,955.52)
Long-term loans increase (decrease) 0.00 0.00 0.00 (339,012,000.00)
Net cash provided by (used in)
financing activities (7,486,253.75) 14,730,489.88 (47,793,167.14) (366,894,955.52)
Cash and cash equivalents increase (decrease) 5,773,919.35 11,656,273.64 10,448,585.97 13,643,235.28
Cash and cash equivalents, beginning
of the period 5,361,819.62 2,877,857.55 687,153.00 890,895.91
Cash and cash equivalents, end of the period 11,135,738.97 14,534,131.19 11,135,738.97 14,534,131.19
Supplemental disclosures of cash flow information :
1. Cash paid during the year for :
Interest payment 36,580,469.01 22,043,547.00 75,252,922.69 77,903,089.80
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 JUNE 30, 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 June 30, 1999 and 1998 has the excess of current liabilities over current assets of Baht
485,472,622.92 and amount of Baht 121,711,549.78, 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 sheet and statements of income for the
Public Company Limited.
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 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.
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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