STATEMENTS OF CASH FLOWS , CONT' (UNAUDITED) FOR THE THREE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 CASH FLOWS FROM FINANCING ACTIVITIES: Receipts of loan from financial institution 950,000 - 950,000 - Repayment of loans from banks (1,080,091) (91,016) (953,797) (60,484) Redemption of convertible bonds - (89,449) - (89,449) Increase (decrease) in advances and loans from related companies 524 (18,025) 26,018 - Net cash (used in) provided by financing activities (129,567) (198,490) 22,221 (149,933) Net increase (decrease) in cash and cash equivalents (298,902) (4,003) (301,498) 32,048 Cash and cash equivalents at beginning of period 470,031 802,775 399,715 673,573 Cash and cash equivalents at end of period 171,129 798,772 98,217 705,621 The accounting policies and notes to interim financial statements on pages 14 to 30 form an integral part of these interim financial statements. CENTRAL PATTANA PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 CASH FLOWS FROM OPERATING ACTIVITIES: Net income for period 151,001 278,329 151,001 278,329 Minority interests 18,395 (25,106) - - Interest expense 305,623 480,383 208,842 301,383 Income tax 85,259 85,320 74,007 75,036 Income before interest expense and tax 560,278 818,926 433,850 654,748 Adjustments to reconcile income before interest and tax to net cash from operating activities:- Depreciation and amortisation 347,602 338,563 150,134 152,778 Amortisation of unearned rental income (146,213) (150,426) (66,809) (69,098) Share of loss in subsidiaries - - 14,848 106,085 Gain from redemption of convertible bonds (56,185) (87,427) (56,185) (87,427) Gain from sale of investment in subsidiary (1,420) - (1,420) - Impairment charge and doubtful accounts 110,203 444,183 75,899 427,476 Loss (gain) on exchange 180,863 (412,735) 180,863 (412,735) Loss on cancellation of sale contracts 1,093 - - - Movement in operating working capital (Note 18) (364,949) 167,387 (394,119) 122,416 Cash inflow from operating activities before interest and tax 631,272 1,118,471 337,061 894,243 Interest expense paid (260,925) (439,201) (163,493) (260,258) Income tax paid (203,772) - (194,693) - Net cash from (used in) operating activities 166,575 679,270 (21,125) 633,985 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (172,962) (294,227) (19,720) (12,984) (Increase) decrease in advances and loans to related company (9,077) (28,131) (131,280) 91,453 Investment in subsidiaries - - (235,557) (419,870) Proceeds from sale of investment in subsidiary 4,050 - 76,049 - Investment in securities available-for-sale (225) - (225) - Dividend received - - 60,000 100,000 Net cash used in investing activities (178,214) (322,358) (250,733) (241,401) The accounting policies and notes to interim financial statements on pages 14 to 30 form an integral part of these interim financial statements CENTRAL PATTANA PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS , CONT' (UNAUDITED) FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 CASH FLOWS FROM FINANCING ACTIVITIES: Receipts of loan from financial institution 950,000 - 950,000 - Repayment of loans from banks (1,245,311) (234,532) (947,812) (179,265) Redemption of convertible bond (49,599) (89,449) (49,599) (89,449) Decrease in advances and loans from related companies 369 (23,970) 1,716 (54,430) Dividend paid (100,000) - (100,000) - Net cash used in financing activities (444,541) (347,951) (145,695) (323,144) Net (decrease) increase in cash and cash equivalents (456,180) 8,961 (417,553) 69,440 Cash and cash equivalents at beginning of period 627,309 789,811 515,770 636,181 Cash and cash equivalents at end of period 171,129 798,772 98,217 705,621 The accounting policies and notes to interim financial statements on pages 14 to 30 form an integral part of these interim financial statements. CENTRAL PATTANA PUBLIC COMPANY LIMITED NOTES TO INTERIM FINANCIAL STATEMENTS (UNAUDITED) 30 SEPTEMBER 1999 AND 1998 1 Principal accounting policies a) Basis of preparation of the interim financial statements The interim consolidated and company financial statements have been prepared in accordance with and comply with accounting principles generally accepted in Thailand and regulations of The Stock Exchange of Thailand. The company previously presented the interim financial statements for the three-month and nine-month periods ended 30 September 1998 which did not include the consolidated and company statements of cash flows for the three-month and nine-month periods ended 30 September 1998 because the presentation of these financial statements was not required by The Stock Exchange of Thailand at that time. The company has now prepared and presented these financial statements for comparative purpose with the financial statements for three- month and nine-month periods ended 30 September 1999 which is complying with the regulations of The Stock Exchange of Thailand, relating to the preparation of financial statements effective in 1999. Consolidation The interim consolidated financial statements include the interim financial statements for the three-month and nine-month periods ended 30 September 1999 and 1998 of the company and its subsidiaries. The results of subsidiaries are accounted for from their effective date of acquisition. Subsidiaries Subsidiaries are those companies in which the Group holds, directly or indirectly, more than 50% of the voting shares and control is exercised over their management. b) Revenue recognition Rental income is recognised as income over the lease period. Service income is recognised when services have been rendered. Unearned rental and service income are recognised using straight-line method over the periods of lease. Revenue from foods and beverage sales is recognised upon delivery of goods to customers. c) Short-term investment Short-term investments comprise fixed deposits at banks, deposits at financial institution in form of promissory notes with maturity date within three-month or less, and investments in securities available-for-sale, both in listed common shares and debenture. Fixed deposits and deposits at financial institution are stated at face value. To comply with Thai Accounting Standards No.40, effective on 1 January 1999, investments in securities designated as available-for-sale are stated at fair value. Fair value of investment in listed common shares and debenture is calculated by reference at Stock Exchange of Thailand quoted buying prices and Bond Dealer Club's recent buying prices at the close of business on the balance sheet date, respectively. Unrealised gain or loss on investments in securities available-for-sale is presented as a component in shareholders' equity section. The company will recognise the difference between disposal proceeds and the carrying amount as income or expense in the statement of income upon disposal of an investment. Prior to 1 January 1999, short-term investments in listed securities are valued at the lower of aggregate average cost or market. d) Allowance for doubtful accounts The Group's management estimates the allowance for doubtful accounts from the ending balance of accounts receivable. The estimate encompasses consideration of past collection experiences, customers' deposit and other factors such as, changes in the composition and volume of the receivable, the relationship of the allowance to the receivable and the local economic conditions. e) Inventories Inventories are stated at the lower of cost and net realisable value, cost being determined on either the first-in, first-out or the weighted average basis. f) Investments in subsidiaries Investments in subsidiaries are stated at fair value as of the acquisition date and adjusted by the share of results in subsidiaries under the equity method. In case where a subsidiary incurs a loss in excess of investment, the company will reduce the investment cost until it reached zero. In case the company is held responsible for subsidiary obligations, the negative investment in the subsidiary will be recorded as liability. g) Other investments Investments in related and other companies, representing the investments in which the Group holds, directly or indirectly, less than 50% of voting shares and has no significant influence in their management, are stated at cost or the carrying amount of the investment less provision for impairment in value. Deposit at financial institution is stated at face value. h) Property and equipment and depreciation Property and equipment comprise assets for lease and operating furniture fixture and equipment. Land is stated at cost. Property and equipment, except land, are stated at cost less accumulated depreciation. Depreciation is provided for all other fixed assets, except land, using the straight-line method over their estimated useful lives as follows: Leasehold right 25 - 30 years years Buildings and improvement 25 - 30 years years Furniture, fixtures and equipment 5 - 15 years years Motor vehicles 5 years years Expenditures for additions, renewals and betterment on fixed assets are capitalised. Repair and maintenance costs are recognised as expenses when incurred. i) Capitalisation of borrowing costs Borrowing costs are capitalised to the extent that the company has incurred borrowing costs on assets that require time to get them ready for sale or for their intended use, at which point capitalisation then ceases. Capitalisation of borrowing costs will be suspended during extended periods in which active development is interrupted. j) Deferred income tax Deferred income tax is accounted for at the current tax rate in respect of temporary differences arising between profit as computed for taxation purpose and profit as stated in the financial statements to the extent that a liability or asset is expected to be payable or receivable in the foreseeable future. The principal temporary differences arise from provision for redemption of convertible bond, provision for impairment in value of investments, allowance for doubtful accounts, accrued interests payable on bond, and other provisions. k) Other assets Other assets mainly comprise guarantee for leasehold right, withholding tax at source, deferred income tax, pre-operating expenses, deferred expenses and refundable deposits. Guarantee for leasehold right, withholding tax at source and refundable deposits are stated at cost. Pre-operating expenses and deferred expenses are amortised using the straight-line method over periods of 5 to 15 years. l) Foreign currency transactions Transactions during the period denominated in foreign currencies are translated into Baht at the rates of exchange ruling on the transaction dates. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised as income or expense when incurred. Such balances are translated into Baht at the exchange rates ruling at that date unless hedged by forward foreign exchange contracts, in which case the contract rates specified in such forward foreign exchange contracts are used. m) Related companies Companies are considered to be related if one company has the ability to control the other company or exercise significant influence over the other company in making financial and operating decisions, or the director or shareholders of both companies are the same persons. n) Earnings per share Basic earnings per share is computed by dividing the net income for period by the weighted average number of paid-up ordinary shares outstanding during the period. Diluted earnings per share is computed on assumption that all outstanding Euro Convertible Bonds are converted to common share at the beginning of the period. Net income is adjusted by interest, related taxes and other related expenses of the bonds. o) Cash and cash equivalents For the purpose of the cash flow statement, cash and cash equivalents comprise cash on hand and at banks and deposits with financial institutions with original maturity of 3 months or less. 2 Financial information by business segment Financial information by geographical segment has not been prepared because the company and its subsidiaries are operating solely in Thailand. Financial information by business segment for the three-month and nine-month periods ended 30 September 1999 and 1998 are as follows: For the three-month period ended 30 September 1999 Rental and Food and services Beverage Consolidated Baht'000 Baht'000 Baht'000 Revenues 537,568 108,056 645,624 Segment results 283,924 29,495 313,419 Interest income 6,102 Other income 18,804 Administrative expenses (77,990) Loss on foreign exchange (179,561) Doubtful debt on loan to related company (40,000) Interest expense (106,336) Income tax 19,307 Minority interests (4,743) Net income (loss) for period (50,998) Fixed assets by segment (As at 30 September) 9,578,818 100,666 9,679,484 Total assets by segment (As at 30 September) 11,501,647 222,736 11,724,383 For the three-month period ended 30 September 1998 Rental and Food and services Beverage Consolidated Baht'000 Baht'000 Baht'000 Revenues 488,384 83,969 572,353 Segment results 232,716 24,102 256,818 Interest income 26,597 Gain from redemption of convertible bonds 87,427 Gain on foreign exchange 130,553 Other income 37,322 Administrative expenses (90,082) Loss on impairment in value of other investments (17,640) Provision for loss of properly under development (114,450) Interest expense (180,691) Income tax (59,306) Minority interests 3,397 Net income for period 79,945 Fixed assets by segment (As at 30 September) 9,805,419 72,448 9,877,867 Total assets by segment (As at 30 September) 12,243,023 121,006 12,364,029 2 Financial information by business segment (Cont'd) For the nine-month period ended 30 September 1999 Rental and Food and Consolidated services Beverage Baht'000 Baht'000 Baht'000 Revenues 1,605,449 296,346 1,901,795 Segment results 852,605 78,362 930,967 Interest income 31,491 Gain from redemption of convertible bonds 56,185 Other income 87,620 Administrative expenses (251,452) Doubtful debt on loan to related company (80,000) Provision for loss of property under development (30,000) Loss on foreign exchange (184,533) Interest expense (305,623) Income tax (85,259) Minority interests (18,395) Net income for period 151,001 Fixed assets by segment (As at 30 September) 9,578,818 100,666 9,679,484 Total assets by segment (As at 30 September) 11,501,647 222,736 11,724,383 For the nine-month period ended 30 September 1998 Rental and Food and Consolidated services Beverage Baht'000 Baht'000 Baht'000 Revenues 1,460,227 205,871 1,666,098 Segment results 722,281 47,665 769,946 Interest income 199,525 Gain from redemption of convertible bonds 87,427 Gain on foreign exchange 336,252 Other income 92,391 Administrative expenses (239,140) Loss from impairment in value of other investments (269,126) Bad debt from loan to related company (43,899) Provision for loss of property under development (114,450) Interest expense (480,383) Income tax (85,320) Minority interests 25,106 Net income for period 278,329 Fixed assets by segment (As at 30 September) 9,805,419 72,448 9,877,867 Total assets by segment (As at 30 September) 12,243,023 121,006 12,364,029 3 Short-term investments Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Fixed deposits 61,420 392,892 60,510 361,998 Promissory notes 13,009 333,452 - 312,403 74,429 726,344 60,510 674,401 Securities available-for-sale 13,167 31,533 13,167 31,533 Plus : Unrealised gain (loss) 1,140 (19,483) 1,140 (19,483) 14,307 12,050 14,307 12,050 88,736 738,394 74,817 686,451 4 Trade accounts receivable Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Trade accounts receivable - Related company 58,654 73,387 46,115 71,957 - Others 138,507 194,765 69,423 108,001 197,161 268,152 115,538 179,958 Less: Allowance for doubtful accounts (7,598) (16,707) (3,917) (11,812) 189,563 251,445 111,621 168,146 Included in trade accounts receivable as at 30 September 1999 of the interim consolidated and company financial statements are 335 and 169 doubtful debtors, respectively, which can be aged as follows. Consolidated Related Companies Others Total Baht'000 Baht'000 Baht'000 Over 3 months to 6 months 4,512 17,905 22,417 Over 6 months to 12 months 6,655 16,296 22,951 Over 12 months 20,538 24,752 45,290 Total 31,705 58,953 90,658 Customers' deposit 12,519 69,537 82,056 4 Trade accounts receivable (Cont'd) Company Related Companies Others Total Baht'000 Baht'000 Baht'000 Over 3 months to 6 months 3,811 7,280 11,091 Over 6 months to 12 months 5,685 3,131 8,816 Over 12 months 15,368 7,018 22,386 Total 24,864 17,429 42,293 Customers' deposit 12,519 47,123 59,642 5 Advances and loans to related companies Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Loans to subsidiaries Central Realty Service Co., Ltd. - - - 13,036 Central Food Avenue Co., Ltd. - - 1 8,447 Coffee Partners Co., Ltd. - - 41,452 8,929 - - 41,453 30,412 Advances to related companies 9,077 8,829 - - 9,077 8,829 41,453 30,412 Loans to subsidiaries are unsecured and denominated in Thai Baht. The loans are repayable on demand and carry interest at fixed deposit rate. 6 Other account receivable Other account receivable represents amount due from an overseas financial institution resulting from a suspension of their delivery of cash amounting to USD 30 million, in accordance with forward foreign exchange contracts, which was converted into Baht at the exchange rate as at 30 September 1999, net of cash denominated in Thai Baht amount which the company have to deliver for the exchange at an average exchange rate per contracts of Baht 25.8 to USD 1. These forward contracts were due for delivery on 27 September 1999. However, the financial institution denied the delivery of USD on the due date and informed that this was a temporary suspension pending for the result of negotiation with the company relating to the default of forward foreign exchange contracts amounting to Baht 590 million between the financial institution and one of the company's related companies which the company hold 15% of shares. The company is currently (more)