UNAUDITED REVIEWED CENTRAL PATTANA PUBLIC COMPANY LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1998 AND 1997 In Thousand Baht 1998 1997 REVENUES (Note 4) Rental and service income 479,460 459,503 Food and beverage income 56,737 60,113 Interest income 81,679 69,708 Other income Management fee 1,859 8,291 Others 36,323 22,941 Total Revenues 656,058 620,556 COSTS AND EXPENSES Cost of rental and service (Note 4) 235,035 182,801 Cost of food and beverage (Note 4) 43,331 47,745 Operating and administrative expenses (Note 4) 89,595 107,966 Interest expense 130,641 59,546 Directors remuneration 2,134 1,917 Total Costs and Expenses 500,736 399,975 Income before income tax and minority interest 155,322 220,581 Income tax (Note 5) 59,873 68,014 Income before minority interest 95,449 152,567 Minority interest in loss (income) in subsidiaries 11,159 (779) Income from operations 106,608 151,788 Gain on exchange rate (Note 1) 367,736 - Income before cumulative effect of accounting change 474,344 151,788 UNAUDITED REVIEWED - 2 - In Thousand Baht 1998 1997 Cumulative effect of accounting change (Note 5) - 5,503 NET INCOME 474,344 157,291 Earnings per Share (Baht) Primary Earnings per Share Income before cumulative effect of accounting change 4.74 1.52 Cumulative effect of accounting change (Note 5) - 0.05 Net income 4.74 1.57 Fully Diluted Earnings per Share Net income (Note 3) 1.59 See accompanying Notes to Interim Financial Statements. (With Mr. Methee Ratanasrimethas report dated May 7, 1998) UNAUDITED REVIEWED CENTRAL PATTANA PUBLIC COMPANY LIMITED STATEMENTS OF INCOME FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1998 AND 1997 In Thousand Baht 1998 1997 REVENUES (Note 4) Rental and service income 307,679 340,873 Interest income 90,042 70,481 Other income Management fee 7,446 8,291 Others 11,942 14,756 Total Revenues 417,109 434,401 COSTS AND EXPENSES Cost of rental and service (Note 4) 102,850 103,255 Equity in net loss (income) of subsidiaries 16,748 (19,016) Operating and administrative expenses (Note 4) 59,880 95,337 Interest expense 75,927 44,177 Directors remuneration 2,134 1,917 Total Costs and Expenses 257,539 225,670 Income before income tax 159,570 208,731 Income tax (Note 5) 52,962 56,943 Income from operations 106,608 151,788 Gain on exchange rate (Note 1) 367,736 - Income before cumulative effect of accounting change 474,344 151,788 UNAUDITED REVIEWED - 2 - In Thousand Baht 1998 1997 Cumulative effect of accounting change (Note 5) - 5,503 NET INCOME 474,344 157,291 Earnings per Share (Baht) Primary Earnings per Share Income before cumulative effect of accounting change 4.74 1.52 Cumulative effect of accounting change (Note 5) - 0.05 Net income 4.74 1.57 Fully Diluted Earnings per Share Net income (Note 3) 1.59 See accompanying Notes to Interim Financial Statements. (With Mr. Methee Ratanasrimethas report dated May 7, 1998) CENTRAL PATTANA PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO INTERIM FINANCIAL STATEMENTS MARCH 31, 1998 AND 1997 1. EFFECT OF THE ECONOMIC CRISIS The accompanying interim financial statements for the three-month period ended March 31, 1998, include the effects of the economic crisis on the Company and subsidiaries to the extent they are known and can be estimated. The economic crisis have been affected from the announcement by the Ministry of Finance on July 2, 1997, relative to the change in foreign currency exchange from the pegged basket system to the managed float system and currency volatility. After the announcement, the effects of which will be continued for the foreseeable future. As a result, there are uncertainties that might affect future operations of the Company and subsidiaries in 1998. The ultimate outcome of this matter cannot presently be determined. The interim financial statements do not include any adjustments that might result from these uncertainties. Related effects will be reported in the financial statements as they become known and estimable. As at March 31, 1998, the Company has gain on exchange rate amounting to appoximately Baht 525.3 million. The Company presented this separately in the statements of income net of the related income tax amounting to approximately Baht 157.6 million. 2. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Central Pattana Public Co., Ltd. and the following subsidiaries: Direct and Indirect Percentage of Holdings 1998 1997 Central Realty Service Co., Ltd. 99.99 99.99 Lang Suan Realty Co., Ltd. 99.99 99.99 Central Food Avenue Co., Ltd. 99.99 99.99 Focus Holding Co., Ltd. 99.99 99.99 Central Pattana Chiang Mai Co., Ltd. 99.99 99.99 Central Pattana Ko Raj Co., Ltd. 99.99 99.99 Food Novelties Co., Ltd. 99.99 - Coffee Partners Co., Ltd. 99.93 - Central Pattana Khon Kaen Co., Ltd. 61.74 61.74 Central Pattana Chonburi Co., Ltd. 60.00 60.00 Central Pattana Nine Square Co., Ltd. 60.00 60.00 Namsap Pattana Co., Ltd. 50.00 50.00 Numsup Pattana Realty Service Co., Ltd. 50.00 50.00 The significant intercompany transactions between the Company and subsidiaries have already been eliminated. 3. EARNINGS PER SHARE Primary earnings per share is computed by dividing the net income by the number of shares outstanding at the balance sheet dates. In 1998, fully diluted earnings per share is determined on the assumption that all the Euro Convertible Bonds were converted to common shares since January 1, 1998. Net income was adjusted by interest, gain on exchange rate and the related income tax of the bonds. In 1997, fully diluted earnings per share is higher than primary earnings per share, hence, fully diluted earnings per share is not present to compare in these financial statements. 4. TRANSACTIONS WITH RELATED COMPANIES The Company has certain transactions with related companies. These companies are related through common shareholdings and/or directorships. The financial statements reflect the effects of these transactions on the basis determined by the companies concerned. A summary of revenues and expenses with related companies during the three-month periods ended March 31, were summarized as follows: In Thousand Baht Consolidated For the Company 1998 1997 1998 1997 Revenues 120,218 108,344 141,133 116,492 Expenses 5,541 7,341 6,371 8,406 Receivables from and payables to related companies as at March 31, were summarized as follows: In Thousand Baht Consolidated For the Company 1998 1997 1998 1997 Receivables 115,418 105,614 94,040 68,419 Payables 4,442 6,855 3,257 - Loans to related companies as at March 31, were summarized as follows: In Thousand Baht Consolidated For the Company 1998 1997 1998 1997 Siam Retail Development Co., Ltd 169,106 147,360 169,106 147,360 Lang Suan Realty Co., Ltd. - - 44,835 29,099 Central Food Avenue Co., Ltd. - - 10,633 - Focus Holding Co., Ltd. - - 370,871 480,530 Central Pattana Chiang Mai Co., Ltd. - - 661,495 534,823 Central Pattana Ko Raj Co., Ltd. - - 53,064 184,486 Food Novelties Co., Ltd. - - 22,939 - Central Pattana Khon Kaen Co., Ltd. - - 298,236 262,302 Central Pattana Nine Square Co., Ltd. - - 4,699 - Namsap Pattana Co., Ltd. - - - 490,222 Total 169,106 147,360 1,635,878 2,128,822 Loans from related companies and a director as at March 31, were summarized as follows: In Thousand Baht Consolidated For the Company 1998 1997 1998 1997 Khun Winyu Kuwanun 1,238 434 - - Fairy Plaza Co., Ltd. 458 619 - - Big C Supercenter Public Co., Ltd. 16,063 68,360 - - Central Superstore Co., Ltd. 31 31 - - Super Asset Co., Ltd. 1,096 - - - Rama Nine Square Co., Ltd. 2,037 - - - Modern Tradition Co., Ltd. 3,286 - - - Central Realty Service Co., Ltd. - - 68,394 - Total 24,209 69,444 68,394 - 5. ACCOUNTING CHANGE FOR INCOME TAX Starting from April 1, 1997, the Company adopted the practice of recognizing income tax effects of transaction in the period in which they are entered into the determination of net income, regardless of when they are recognized for computation of income tax purpose. Accordingly, the income tax applicable to expenses which are not currently deductible for computation of income tax purposes are set up as deferred income tax in the balance sheets. This will be allocated to future periods when the expenses provided for are actually incurred and considered deductible for computation of income tax purpose, the change effective on January 1, 1997. As a result of this deferment, net income for the three-month period ended March 31, 1997 increased by approximately Baht 0.5 million or Baht 0.005 per share. The Company included the cumulative effect of accounting change for income tax from prior years up to December 31, 1996 amounting to approximately Baht 5.5 million or Baht 0.05 per share to determine the net income and is presented separately as cumulative effect of accounting change for the period ended March 31, 1997. 6. INVESTMENTS IN SHARES OF SUBSIDIARIES - Equity Method For the Company In Thousand Baht Percentage Business of Paid-up Investment 1998 Type Holdings Shares At Cost At Equity Dividend Central Realty Service Co., Ltd. (2) 99.99 1,000 1,000 163,557 - Lang Suan Realty Co., Ltd. (3) 99.99 150,000 150,000 132,209 - Central Food Avenue Co., Ltd. (4) 99.99 1,000 1,000 11,832 - Focus Holding Co., Ltd. (1) 99.99 400,000 400,000 399,805 - Central Pattana Chiang Mai Co., Ltd. (1) and (4) 99.99 475,000 474,999 449,530 - Central Pattana Ko Raj Co., Ltd. (1) 99.99 200,000 199,999 188,271 - Food Novelties Co., Ltd. (5) 99.99 1,000 1,000 928 - Coffee Partners Co., Ltd. (5) 99.93 1,000 1,000 964 - In Thousand Baht Percentage Business of Paid-up Investment 1998 Type Holdings Shares At Cost At Equity Dividend Central Pattana Khon Kaen Co., Ltd. (1) 61.74 148,630 91,779 87,499 - Central Pattana Chonburi Co., Ltd. (1) 60.00 315,100 189,084 188,034 - Central Pattana Nine Square Co., Ltd. (1) 60.00 390,000 234,000 234,945 - Namsap Pattana Co., Ltd. (1) 50.00 100,000 324,926 381,127 - Total 2,068,787 2,238,701 - (More)