cash equivalents 1,121,172 (157,278) 1,110,873 (116,685) Beginning balance 645,564 621,743 532,277 515,770 Ending balance 1,766,736 464,465 1,643,150 399,085 Cash and cash equivalents : Cash on hand and at banks 1,183,015 94,745 1,060,649 38,901 Fixed deposits with maturity less or equal to 3 months 423,450 251,730 422,234 250,728 Promissory notes with financial institution with maturity less or equal to 3 months 160,271 117,990 160,267 109,456 1,766,736 464,465 1,643,150 399,085 The notes to the interim consolidated and company financial statements on pages 11 to 26 are an integral part of these interim financial statements. Central Pattana Public Company Limited Notes to the Interim Consolidated and Company Financial Statements (Unaudited) For the Six-Month period Ended 30 June 2000 and 1999 1 Accounting Policies The interim consolidated and company financial statements are prepared in accordance with the accounting principles generally accepted in Thailand. However, the primary statements (i.e. balance sheets, statements of income, changes in shareholders' equity, retained earnings and cash flows) are presented in the full format as prescribed by the Ministerial Regulation No. 7 (B.E. 2539) in accordance with the Securities and Exchange Commission's and the Stock Exchange of Thailand's requirements, rather than in the condensed format as required by Thai Accounting Standard No. 41, "Interim Financial Reporting." The accounting policies used in the preparation of the interim financial statements are consistent with those used in the annual financial statements for the year ended 31 December 1999. The Group has implemented the following new Thai Accounting Standards, effective 1 January 2000, in these interim financial statements: TAS 43 - Business Combinations TAS 44 - Consolidated Financial Statements and Accounting for Investment in Subsidiaries TAS 45 - Accounting for Investment in Associates TAS 46 - Financial Reporting of Interests in Joint Ventures TAS 47 - Related Party Disclosures TAS 48 - Financial Instruments Disclosure and Presentation The comparatives, if any, have been adjusted or extended to take into account the requirements of those newly effective standards. Costs that are incurred unevenly during the financial year are anticipated or deferred in the interim report only if it would be also appropriate to anticipate or defer such costs at the end of the financial year. Income tax expense is recognised based on the best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used is 30%. These interim financial statements should be read in conjunction with the 1999 annual financial statements. 2 Segment Information Financial information by business segments - Group For the six-month period ended 30 June 2000 Rental and Food and Services Beverage Consolidated Baht' 000 Baht' 000 Baht' 000 Revenues 1,175,117 219,383 1,390,450 Segment result 640,544 51,406 691,950 Operating profit 192,236 For the six-month period ended 30 June 1999 Rental and Food and Services Beverage Consolidated Baht' 000 Baht' 000 Baht' 000 Revenues 1,067,881 188,290 1,256,171 Segment result 569,774 48,867 618,641 Operating profit 201,999 3 Operating profit The following items of unusual nature have been charged to the operating profit during the interim period: For the three-month period ended 30 June Consolidated Company 2000 1999 2000 1999 (Restated) (Restated) Baht' 000 Baht' 000 Baht' 000 Baht' 000 Other operating income Interest income 15,412 13,046 21,149 24,922 Gain from redemption of convertible bonds 17,775 - 17,775 - Gain from foreign exchange - 35,557 - 35,557 Gain on disposal of subsidiary (Note 15) 81,721 - 19,835 - Other 25,274 31,729 26,850 15,696 140,182 80,332 85,609 76,175 Other operating expenses Provision for loss of property under development 147,790 - 91,226 - Provision for loan to related company - 40,000 - 40,000 Loss on foreign exchange 57,809 - 57,809 - Directors' remuneration 2,898 3,492 2,898 3,492 208,497 43,492 151,933 43,492 3 Operating profit (Cont'd) For the six-month period ended 30 June Consolidated Company 2000 1999 2000 1999 (Restated) (Restated) Baht' 000 Baht' 000 Baht' 000 Baht' 000 Other operating income Interest income 24,485 25,210 35,987 45,999 Gain from redemption of convertible bonds 17,775 56,185 17,775 56,185 Gain on disposal of subsidiary (Note 15) 81,721 - 19,835 - Other 49,840 68,816 50,736 46,980 173,821 150,211 124,333 149,164 Other operating expenses Provision for loss of property under development 147,790 30,000 91,226 - Provision for loan to related company - 40,000 - 40,000 Loss on foreign exchange 68,898 4,972 68,901 4,972 Directors' remuneration 5,999 6,840 5,999 6,840 222,687 81,812 166,126 51,812 4 Earnings Per Share Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the period (2000: 100,000,000 shares; 1999: 100,000,000 shares). For the calculation of the diluted earnings per share, the net profit adjusted for the interest expense of convertible bond of Baht 93.5 million (1999: Baht 41.0 million) and the weighted average number of shares assuming conversion of all dilutive potential ordinary shares is 107,815,500 shares (1999: 108,905,750 shares). Since loan converted resulted in diluted earnings per share for the three-month and six-month periods ended 30 June 2000 and 1999 are higher than basic earnings per share. Therefore, basic earnings per share is presented as diluted earnings per share in the statement of income. 5 Prior year adjustments The Company has restated the consolidated balance sheet as at 31 December 1999, present for comparative purposes, to reflect the result of cumulative effect of the adoption of new Thai Accounting Standard No. 46 - "Financial Reporting of Interest in Joint Ventures". The consolidated and company statement of income for the three- month and six-month period ended 30 June 1999, changes in shareholders' equity, retained earnings and cash flows for the three-month period ended 30 June 1999 were restated to reflect the result of cumulative effects from the change in its accounting policy on pre-operating expenses to comply with the new accounting framework and prior year adjustments relating to the correction of errors in the capitalisation of interest expenses as cost of assets. 6 Trade Accounts Receivable Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Trade accounts receivable -Related companies 19,359 29,707 24,105 24,791 -Others 117,314 112,100 44,972 48,972 136,673 141,807 69,077 73,763 Less Allowance for doubtful accounts (3,357) (4,801) (1,085) (1,969) 133,316 137,006 67,992 71,794 Outstanding trade accounts receivable greater than three months can be analysed as follows: Consolidated Consolidated As at 30 June 2000 As at 31 December 1999 Related Others Total Related Others Total Companies Companies Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 3 - 6 months 2,408 7,846 10,254 1,565 17,055 18,620 6 - 12 months 481 12,264 12,745 2,582 3,283 5,865 Over 12 months 6,771 11,347 18,118 10,487 14,051 24,538 9,660 31,457 41,117 14,634 34,389 49,023 Customers deposit 1,875 83,522 85,397 7,089 94,962 102,051 6 Trade Accounts Receivable (Cont'd) Company Company As at 30 June 2000 As at 31 December 1999 Related Others Total Related Others Total Companies Companies Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 3 - 6 months 1,262 2,516 3,778 673 10,171 10,844 6 - 12 months 258 3,744 4,002 2,167 1,264 3,431 Over 12 months 5,826 2,550 8,376 9,061 4,111 13,172 7,346 8,810 16,156 11,901 15,546 27,447 Customers deposit 1,875 50,152 52,027 7,089 69,557 16,646 7 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 27 September 1999 which was the due date of forward contracts. 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. Up to July 2000, eventhough the financial institution received the settlement from the Company's related companies, the suspension of the outstanding amount has not been finalised. However, the Company had partially received Baht 349 million from the financial institution. This amount is considered as the part of the total amount to be settled when it is fixed in the future. In case where the negotiation results as unfavorable to the Company, the Company will further proceed with the law suit against the financial institution. 8 Other Current Assets Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Accrued income 87,728 62,116 51,920 30,572 Other accounts receivable 53,457 60,901 6,971 6,740 Inventories 8,217 29,496 - - Prepaid expenses 4,712 9,502 290 4,031 Advance payments 1,292 8,243 591 729 Prepaid construction expenses 7,753 - - - Loan to other companies 5,010 - 5,010 - Accrued interest income 1,787 3,244 1,750 3,212 169,956 173,502 66,532 45,284 9 Capital Commitment For the six-month Consolidated Company period ended 30 June Property Property Property Property 2000 and under and under equipment development Total equipment development Total Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Opening net book amount 7,379,047 2,184,759 9,563,806 3,343,470 - 3,343,470 Addition 55,857 106,888 162,745 15,361 - 15,361 Disposal (4,689) (218) (4,907) (15) - (15) Sales of subsidiaries (note 13) (71,914) - (71,914) - - - Provision for loss on impairment of asset - (147,790) (147,790) (91,226) - (91,226) Depreciation (232,246) - (232,246) (88,786) - (88,786) Closing net book amount 7,126,055 2,143,639 9,269,694 3,178,804 - 3,178,804 Long-term bank borrowings are secured by the Group' s properties with book values of Baht 2,507 million. The Group's project under development comprises total 6 projects. However, the balances included development costs of 4 shopping center development projects (1999 : 5 projects), located both in Bangkok and up- country, which were temporarily suspended. The management decision to continue the construction of the remaining projects depends on the future economic situation and the ability to obtain additional funds. The total costs of these projects, which are still temporarily suspended, and related allowance for project loss as of 30 June 2000 are amounting to Baht 1,279 million and 337 million, respectively (As at 31 December 1999: Baht 1,904 million and Baht 257 million). Commitment as at 30 June 2000 The Group has commitments in respect of further development costs to complete property development projects in progress of Bht 194.7 million (as at 31 December 1999: Baht 118.2 million). 10 Other Assets Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Guarantee for leasehold right 402,162 403,704 103,587 105,130 Withholding tax deducted at source 105,968 102,284 56,140 56,140 Euro convertible bond issue cost 6,162 8,641 6,162 12,290 Deposit and intangible assets 13,011 27,746 4,913 1,286 527,303 542,375 170,802 174,846 11 Other Current Liabilities Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Accrued expenses 124,856 134,595 71,332 65,865 Other accounts payable 90,001 128,233 34,448 40,881 Accrued interest expenses 80,210 85,178 79,989 84,677 Retention payable 62,914 61,678 2,700 2,932 Contractor payable 21,811 34,614 1,513 1,125 Others 32,013 26,961 12,142 10,249 411,805 471,259 202,124 205,729 12 Borrowings Consolidated Company 30 June 31 December 30 June 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Due within one year 259,944 262,240 259,944 246,139 Due between 2-5 years 2,928,968 2,244,656 1,982,575 1,216,036 Total 3,188,912 2,506,896 2,242,519 1,462,175 The movements in the borrowings can be analysed as follows: For the six-month period ended 30 June 2000 Consolidated Company Baht' 000 Baht' 000 Opening amount 2,506,896 1,462,175 Bond (debt equity) issued - due within 3 years, unsecured 900,000 900,000 Repayment of borrowings (217,984) (119,656) Closing amount 3,188,912 2,242,519 The company mortgaged 2 plots of land and buildings of the Company and its subsidiaries as a collateral of long-term loans as mentioned in Note 8 to the financial statements. 13 Contingencies As of 30 June 2000, the Company and subsidiaries have contingent liabilities in respect of letter of guarantees issued by the banks in favor of a state enterprise for the consumption of electricity totaling of Baht 65.9 million (As at 31 December 1999: Baht 65.9 million). 14 Cash Flows from Operating Activities Reconciliation of net profit to cash flows from operating activities for the six-month period ended 30 June: Consolidated Company 2000 1999 2000 1999 (Restated) (Restated) Baht' 000 Baht' 000 Baht' 000 Baht' 000 Net profit 192,236 201,999 192,236 201,999 Interest expense 192,871 199,287 150,916 131,036 Income tax 76,979 104,566 51,605 96,692 Minority interest 6,074 14,532 - - Net profit before interest and tax 468,160 520,384 394,757 429,727 Adjustments for: Depreciation and amortisation 243,669 231,149 92,715 94,158 Doubtful debts (1,434) 75,431 (884) 38,218 Provision for loss on project under development 147,786 - 91,226 - Loss on cancellation of sale contract - 1,093 - - Loss on foreign exchange - bond 68,901 5,278 68,901 5,278 Share of (profit)/loss of subsidiaries - - (53,873) 21,510 Gain on disposal of investments in subsidiaries (81,721) (1,420) (19,835) (1,420) Gain from redemption of Euro convertible bonds (17,775) (56,185) (17,775) (56,185) Recognise unearned rental and service income (78,909) (77,188) (40,072) (40,083) Changes in operating assets and liabilities: - Trade accounts receivable 32,705 20,937 4,686 22,636 - Other accounts receivables 180,000 - 180,000 - - Other current assets (58,127) 8,469 (16,238) 10,883 - Deferred income tax (27,647) - (22,812) - - Other assets (9,633) 997 129 10,934 - Trade accounts payable 575 (24,714) (64) (3,349) - Other current liabilities (26,024) (9,625) 588 (5,494) - Unearned rental income 46,377 26,001 8,589 (5,774) - Deposit from customers 47,731 (7,414) 16,515 3,577 - Guarantee for leasehold (9,439) (27,339) 1 3,903 Cash generated from operations before interest and income tax 925,195 685,854 686,554 528,519 Interest expense paid (153,658) (178,425) (111,423) (109,555) Income tax paid (275,740) (203,772) (268,119) (194,693) Net cash generated from operations 495,797 303,657 307,012 224,271 15 Disposal of subsidiary During the period, The Group disposed a subsidiary, Coffee Partners Company Limited. The net book value of the assets of the subsidiary was as follows: Baht'000 Cash on hand and at banks 14,356 Short-term investment 835 Trade accounts receivable, net 1,077 Short-term loans and advances to related parties 604 Inventories 14,428 Other current assets 8,569 Property and equipment, net 71,914 Other assets 16,683 Bank overdrafts and loans from financial institutions (3,210) Other payable (80,178) Short-term loans and advance from directors and related parties (8,332) Other current liabilities (1,928) Total 34,818 Less: Net book value of assets attributable to Minority interests (4,615) Net book value of assets attributable to the Group 30,203 Less: Cash received from sale of investment 111,924 Gain from sale of investment 81,721 Cash received from sale of investment 111,924 (more)