Loans received from related companies 33 - - 378,395 Investment in subsidiary - - - (235,557) Net proceeds on disposal of subsidiary 15 97,568 4,050 25,000 76,049 Dividend received - - 40,000 60,000 Purchases of property and equipment (268,653) (132,944) (15,975) (19,720) Net cash (payments) in investing activities (1,270,163) (141,760) (1,074,629) (250,733) Cash flows from financing activities Purchases of convertible bonds (201,303) (49,599) (201,303) (49,599) Proceeds from bonds issued to financial institutions 900,000 950,000 900,000 950,000 Payments on long-term borrowings, net (278,127) (1,124,400) (176,227) (947,812) Loan repayment to related companies 63,514 369 59,914 1,716 Dividend paid (125,000) (100,000) (125,000) (100,000) Net cash receipts/(payments) from financing activities 359,084 (323,630) 457,384 (145,695) Net increase /(decrease) in cash and cash equivalents 116,045 (454,051) 135,915 (417,553) Beginning balance 635,206 615,979 532,277 515,770 Ending balance 751,251 161,928 668,192 98,217 Cash and cash equivalents : Cash on hand and at banks 577,725 92,742 495,327 37,707 Fixed deposits with maturity less or equal to 3 months 72,753 61,420 72,092 60,510 Promissory notes with financial institution with maturity less or equal to 3 months 100,773 7,766 100,773 - 751,251 161,928 668,192 98,217 The notes to the interim consolidated and company financial statements on pages 11 to 27 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 Nine-Month Period Ended 30 September 2000 1 Accounting Policies The interim consolidated and company financial statements are prepared in accordance with the accounting principles generally accepted in Thailand and are presented in the condensed format as required by Thai Accounting Standard No. 41, "Interim Financial Reporting" with additional disclosure, in case of the primary financial statements (i.e. balance sheets, statements of income, changes in shareholders' equity, retained earnings and cash flows) based on the format prescribed by the Ministerial Regulation No. 7 (B.E. 2539) in accordance with the Securities and Exchange Commission and the Stock Exchange of Thailand. 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 nine-month period ended 30 September 2000 Rental and Food and Consolidated Services Beverage Baht' 000 Baht' 000 Baht' 000 Revenues 1,661,740 285,803 1,947,543 Segment result 900,273 67,152 967,425 Operating profit 342,270 For the nine-month period ended 30 September 1999 Rental and Food and Consolidated Services Beverage Baht' 000 Baht' 000 Baht' 000 Revenues 1,488,999 296,346 1,785,345 Segment result 795,935 75,574 871,509 Operating profit 247,405 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 September Consolidated Company 2000 1999 2000 1999 (Restated) (Restated) Baht' 000 Baht' 000 Baht' 000 Baht' 000 Other operating expenses Provision for loan to related company - 40,000 - 40,000 For the nine-month period ended 30 September Consolidated Company 2000 1999 2000 1999 (Restated) (Restated) Baht' 000 Baht' 000 Baht' 000 Baht' 000 Other operating income 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 operating expenses Provision for loss of property under development 147,786 30,000 91,226 - Provision for loan to related company - 80,000 - 80,000 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 and paid up 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 for the nine-month period ended 30 September 2000 of Baht 471.2 million (1999: Baht 229.5 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 nine-month periods ended 30 September 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 5.1 The Company invested in jointly controlled entities which are Central Pattana Conburi Co., Ltd. and Central Pattana Rama 3 Co., Ltd. with a venturer per joint venture agreements signed in September 1996 and August 2000, respectively. The interim consolidated financial statements for the period ended 30 September 2000 were presented using the proportionate consolidation method of accounting for an interest in the jointly controlled entities. The Company's share of each individual assets and liabilities of the jointly controlled entities were added to the amount appearing the same type of assets and liabilities in the consolidated financial statement as required by the Thai Accounting Standard No. 46 effective on 1 January 2000. Therefore, the Company had restated the consolidated financial statements for the year ended 31 December 1999 and the interim consolidated financial statements for the three-month and nine- month period ended 30 September 1999, for comparative purpose with the interim consolidated financial statements for the period ended 30 September 2000. 5.2 In addition, the Company restated the interim consolidated and company financial statements for the nine- month period ended 30 September 1999 to reflect the result of cumulative effect 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. The adjustments were parts of transactions that the Company made adjustments in retained earning for the year ended 31 December 1999 (per note to financial statements for the year ended 31 December 1999 No. 25). 6 Trade Accounts Receivable Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Trade accounts receivable -Related companies 27,860 34,936 30,043 24,791 -Others 95,715 93,721 40,784 48,972 123,575 128,657 70,827 73,763 Less Allowance for doubtful accounts (2,807) (4,648) (769) (1,969) 120,768 124,009 70,058 71,794 6 Trade Accounts Receivable (Cont'd) Outstanding trade accounts receivable greater than three months can be analysed as follows: Consolidated Consolidated As at 30 September 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 4,544 11,138 15,682 1,565 17,055 18,620 6 - 12 months 2,097 12,473 14,570 2,582 3,283 5,865 Over 12 months 6,975 11,549 18,524 10,487 14,051 24,538 Total 13,616 35,160 48,776 14,634 34,389 49,023 Customers deposit 3,725 42,659 46,384 7,089 94,962 102,051 Company Company As at 30 September 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 3,588 1,617 5,205 673 10,171 10,844 6 - 12 months 1,305 2,444 3,749 2,167 1,264 3,431 Over 12 months 5,977 2,773 8,750 9,061 4,111 13,172 10,870 6,834 17,704 11,901 15,546 27,447 Customers deposit 3,725 42,659 46,384 7,089 69,557 76,646 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. As at 30 September 2000, the negotiation with the financial institution was finalised. The Company received payments for all of the balance totaling of Baht 449 million from the financial institution including the indemnity of Baht 7.6 million. 8 Other Current Assets Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Accrued income 80,367 55,288 56,925 30,572 Other accounts receivable 38,642 47,059 6,858 6,740 Prepaid expenses 8,315 9,491 5,057 4,031 Inventories 7,148 29,496 - - Accrued interest income 6,357 3,286 6,320 3,212 Prepaid construction expenses 6,349 4,972 - - Advance payments 1,196 3,242 644 729 148,374 152,834 75,804 45,284 9 Capital Commitment Consolidated Company For the nine-month Property Property Total Property Property Total period ended and under and under 30 September 2000 equipment development equipment development Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Opening net book amount - As previously reported 7,379,047 2,245,381 9,624,428 3,343,470 - 3,343,470 - Adjustment from Joint ventures (1,031,551) (61,452) (1,093,003) - - - - As restated 6,347,496 2,183,929 8,531,425 3,343,470 - 3,343,470 Addition 54,113 225,481 279,594 15,953 - 15,953 Disposal (899) (218) (1,117) (61) - (61) Sales of subsidiaries (note 15) (71,914) - (71,914) - - - Provision for loss on impairment of asset - (147,790) (147,790) (91,226) - (91,226) Depreciation (318,023) - (318,023) (132,933) - (132,933) Closing net book amount 6,010,773 2,261,402 8,272,175 3,135,203 - 3,135,203 Long-term bank borrowings are secured by the Group' s properties with book values of Baht 2,528 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 September 2000 are amounting to Baht 1,430 million and 246 million, respectively (As at 31 December 1999: Baht 1,664 million and Baht 256 million). Commitment as at 30 September 2000 The Group has commitments in respect of further development costs to complete property development projects in progress which the contracts were signed of Bht 150.9 million (as at 31 December 1999: Baht 118.2 million). 10 Other Assets Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Guarantee for leasehold right 401,389 403,704 102,816 105,130 Withholding tax deducted at source 85,400 87,102 56,140 56,140 Euro convertible bond issue cost 4,183 10,053 4,183 10,053 Deposit and intangible assets 10,721 25,850 3,039 3,523 501,693 526,709 166,178 174,846 11 Other Current Liabilities Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Accrued expenses 128,150 121,495 88,281 65,865 Accrued interest expenses 113,249 85,977 113,007 84,677 Other accounts payable 73,344 114,093 31,582 40,881 Retention payable 47,136 39,186 3,170 2,932 Contractor payable 46,170 27,747 1,311 1,125 Others 28,600 23,828 12,960 10,249 436,649 411,326 250,311 205,729 12 Borrowings Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Due within one year 266,963 255,800 266,963 246,139 Due between 2-5 years 2,452,127 1,833,208 1,914,621 1,216,036 Total 2,719,090 2,089,008 2,181,584 1,462,175 The movements in the borrowings can be analysed as follows: For the nine-month period ended 30 September 2000 Consolidated Company Baht' 000 Baht' 000 Opening amount - As previously reported 2,506,896 1,462,175 - Adjustment from Joint Venture Accounting (417,888) - - As restated 2,089,008 1,462,175 Bond (debt equity) issued - due within 3 years, secured 900,000 900,000 Repayment of borrowings (269,918) (180,591) Closing amount 2,719,090 2,181,584 The Company and its subsidiaries mortgaged 2 plots of land and buildings of the Company and its subsidiaries as a collateral of long-term loans as mentioned in Note 9 to the financial statements. 13 Contingencies As of 30 September 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 70.4 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 nine-month period ended 30 September: Consolidated Company 2000 1999 2000 1999 (Restated) (Restated) Baht' 000 Baht' 000 Baht' 000 Baht' 000 Net profit 266,663 159,109 266,663 159,109 Interest expense 273,474 261,701 237,010 208,842 Income tax 85,521 85,259 66,959 74,007 Minority interest (9,914) 3,037 - - Net profit before interest and tax 615,744 509,106 570,632 441,958 Adjustments for: Depreciation and amortisation 332,459 315,765 138,905 150,134 Doubtful debts (1,892) (757) (1,200) (4,439) Allowance for doubtful loan to a related company - 80,000 - 80,000 Provision for loss on project under development 147,786 30,000 91,226 - Loss on foreign exchange bond 186,519 184,533 186,519 184,533 Share of (profit)/loss of subsidiaries - - (92,451) 6,740 Gain on disposal of investments in subsidiaries (81,721) - (19,835) - Gain from redemption of Euro convertible bonds (17,775) (56,185) (17,775) (56,185) Recognise unearned rental and service income (109,580) (135,782) (60,244) (66,809) Changes in operating assets and liabilities: ? Trade accounts receivable 6,120 63,103 2,937 45,378 ? Other accounts receivables 449,093 (449,093) 449,093 (449,093) ? Other current assets (34,487) (15,305) (30,520) 9,683 ? Deferred income tax (44,486) (12,690) (34,463) 3,903 ? Other assets (3,210) (35,929) 2,776 (13,176) ? Trade accounts payable (761) (45,544) (909) (3,555) ? Other current liabilities 32,164 (5,564) 20,700 (4,602) ? Unearned rental income 12,270 93,452 (11,119) 439 ? Deposit from customers 74,800 15,331 30,220 8,249 ? Guarantee for leasehold (8,482) (15,109) - 3,903 Cash generated from operations before interest and income tax 1,554,561 519,332 1,224,492 337,061 Interest expense paid (176,089) (304,221) (139,567) (163,493) Income tax paid (351,348) (203,772) (331,765) (194,693) Net cash generated from operations 1,027,124 11,339 753,160 (21,125) 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: Consolidated financial statements 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) (more)