SET Announcements

CAPITAL DEFICIENCY ( 1,070,949) ( 711,968) ( 878,495) ( 574,142) See accompanying Notes to Interim Financial Statements. (With Mr. Vichien Thamtrakul's report dated November 5, 1999) "UNAUDITED" "REVIEWED" LOXLEY PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 In Thousand Baht Consolidated The Company 1999 1998 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) ( 814,481) 500,187 ( 764,572) 521,318 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 77,124 95,694 36,432 37,668 Wrote-off deferred income tax and income taxes deducted at sources 8,829 - - - Provision for bonds redemption 92,864 97,517 92,864 97,517 Loss (gain) on foreign exchange rates 998,133 ( 696,864) 998,133 ( 696,864) Set up (Reversal) provision for doubtful accounts 15,988 5,381 14,375 ( 8,581) Provision for decline in value of investments in related companies 500 10,000 - 10,000 Set up (Reversal) of provision for decline in value of inventories ( 977) 8,674 ( 5,847) 9,048 Excess of investments over net assets - amortization 51,074 4,674 - - Contribution to employees' provident fund - net 1,510 3,089 1,185 1,581 Gain on sales of investments - net ( 17,720) ( 130,682) ( 1,305) ( 130,682) Equity in results of operations of associated companies - net ( 80,578) ( 69,830) ( 80,578) ( 69,830) Equity in results of operations of subsidiaries - net - - ( 31,879) ( 36,732) Translation adjustment ( 443) ( 273) - - "UNAUDITED" "REVIEWED" - 2 - In Thousand Baht Consolidated The Company 1999 1998 1999 1998 Loss (gain) on sales of fixed assets ( 1,105) 36,245 ( 444) 1,812 Decrease (increase) in collateralized fixed deposits ( 163) 5,464 - - Decrease (increase) in receivables from related companies-trade and others 17,979 ( 46,608) ( 26,421) ( 38,675) Decrease (increase) in accounts receivable-trade and others ( 41,795) 203,994 ( 15,611) 236,933 Decrease (increase) in inventories 77,300 ( 61,499) 67,121 ( 70,655) Decrease (increase) in deferred income tax ( 376,928) 116,166 ( 376,928) 118,117 Decrease (increase) in other current assets 23,699 ( 51,812) 19,678 ( 38,727) Increase in income taxes deducted at sources ( 15,162) ( 10,230) ( 5,998) ( 7,347) Decrease (increase) in refundable deposits and others ( 11,494) ( 8,163) ( 2,405) 1,547 Increase (decrease) in payables to related companies -trade ( 23,320) ( 21,597) ( 14,673) 1,646 Increase (decrease) in accounts payable-trade 1,682 97,955 ( 1,095) 52,785 Increase (decrease) in advance received from customers ( 36,336) 82,667 ( 41,916) 101,874 Increase in income tax payable 2,523 14,549 - - Increase (decrease) in employees' provident fund - net ( 2,461) 4,468 ( 1,980) ( 5,142) Increase (decrease) in other current liabilities ( 1,761) 81,850 23,767 173,419 Increase (decrease) in other liabilities 574 ( 6,394) - - Net Cash Provided by (Used in) Operating Activities ( 54,945) 264,622 ( 118,097) 262,030 "UNAUDITED" "REVIEWED" - 3 - In Thousand Baht Consolidated The Company 1999 1998 1999 1998 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in investments of subsidiaries, associated, related and other companies ( 22,410) - ( 4,800) ( 115,030) Decrease in loan to related companies 3,575 65,503 1,000 75,000 Increase in minority interest in net income of subsidiaries 11,234 8,876 - - Increase in fixed assets ( 89,073) ( 73,598) ( 11,239) ( 6,916) Cash dividends from associated companies 105,798 24,790 105,798 24,790 Proceeds from increase in share capital of subsidiaries 138,443 - - - Proceeds from sales of investments 22,062 151,759 4,207 149,347 Proceeds from sales of fixed assets 1,315 16,191 756 2,335 Net Cash Provided by Investing Activities 170,944 193,521 95,722 129,526 CASH FLOWS FROM FINANCING ACTIVITIES: Increase in loans from financial institutions 7,217 7,161 64,159 67,328 Increase in loans from directors - 11,971 - - Decrease in long-term loans - net - ( 12,951) - - Increase (decrease) in loans and advance from related companies ( 823) 16,591 - - Net Cash Provided by Financing Activities 6,394 22,772 64,159 67,328 "UNAUDITED" "REVIEWED" - 4 - In Thousand Baht Consolidated The Company 1999 1998 1999 1998 NET INCREASE IN CASH AND CASH EQUIVALENTS 122,393 480,915 41,784 458,884 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIODS 1,323,297 921,438 1,249,912 836,035 CASH AND CASH EQUIVALENTS AT END OF PERIODS 1,445,690 1,402,353 1,291,696 1,294,919 Supplemental Disclosures of Cash Flows Information: Cash and cash equivalents consisted of: Cash on hand and at banks (excluded collateralized fixed deposits) 393,512 340,375 126,977 166,506 Short-term investments 1,361,443 1,329,920 1,166,719 1,135,379 Bank overdrafts ( 309,265) ( 267,942) ( 2,000) ( 6,966) Total 1,445,690 1,402,353 1,291,696 1,294,919 Cash paid during the periods for: Interest expense 37,707 67,193 6,694 20,453 Income tax 24,418 12,749 5,998 7,348 See accompanying Notes to Interim Financial Statements. (With Mr. Vichien Thamtrakul's report dated November 5, 1999) "UNAUDITED" "REVIEWED" LOXLEY PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 In Thousand Baht Consolidated The Company 1999 1998 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) ( 767,628) 1,258,225 ( 724,092) 1,292,793 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 227,966 239,265 110,112 113,715 Wrote - off deferred income tax and income taxes deducted at sources 11,230 - - - Provision for bonds redemption 270,842 303,936 270,842 303,936 Loss (gain) on foreign exchange rates 1,018,903 (1,827,860) 1,018,903 (1,828,736) Set up provision for doubtful accounts 17,347 36,145 13,084 1,419 Provision for decline in value of investments to related companies 500 10,000 - 10,000 Reversal of provision for decline in value of inventories ( 8,235) ( 11,423) ( 13,112) ( 8,042) Provision for doubtful accounts on loans - 14,193 - 28,869 Provision for doubtful accounts on interest on loans to related companies - - - 5,156 Excess of investments over net assets - amortization 66,004 14,022 - - Contribution to employees' provident fund - net 6,805 17,575 4,280 5,984 Gain on sales of investments - net ( 17,720) ( 132,776) ( 1,305) ( 155,001) Equity in results of operations of associated companies - net ( 254,960) ( 179,825) ( 254,960) ( 179,825) Equity in results of operations of subsidiaries - net - - ( 60,009) ( 45,800) Translation adjustment 6,935 ( 5,617) - - "UNAUDITED" "REVIEWED" - 2 - In Thousand Baht Consolidated The Company 1999 1998 1999 1998 Loss (gain) on sales of fixed assets 8,910 36,470 ( 5,115) 1,658 Decrease (increase) in collateralized fixed deposits ( 552) 5,464 - - Increase in receivables from related companies - trade and others ( 15,435) ( 55,740) ( 12,564) ( 45,080) Decrease (increase) in accounts receivable-trade and others ( 357,764) 626,637 ( 235,953) ( 37,640) Decrease in inventories 198,113 460,538 185,276 544,589 Decrease (increase) in deferred income tax ( 438,761) 411,118 ( 438,761) 413,069 Increase in other current assets ( 4,419) ( 120,732) ( 40,567) ( 42,543) Increase in income taxes deducted at sources ( 26,507) ( 24,579) ( 10,847) ( 16,036) Decrease (increase) in refundable deposits and others ( 54,002) ( 10,010) ( 6,213) 7,182 Increase (decrease) in payables to related companies-trade ( 53,904) 883 ( 17,555) ( 24,125) Decrease in accounts payable-trade ( 70,854) ( 61,004) ( 14,912) ( 11,253) Increase (decrease) in advance received from customers 80,322 226,309 ( 4,482) 108,147 Increase (decrease) in income tax payable ( 3,301) 22,932 - - Decrease in employees' provident fund - net ( 13,853) ( 47,005) ( 10,276) ( 32,576) "UNAUDITED" "REVIEWED" - 3 - In Thousand Baht Consolidated The Company 1999 1998 1999 1998 Increase (decrease) in other current liabilities 9,401 ( 229,642) 41,294 ( 71,768) Increase (decrease) in other liabilities 12,589 ( 8,093) - - Net Cash Provided by (Used in) Operating Activities ( 152,028) 969,406 ( 206,932) 338,092 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in investments in subsidiaries, associated, related and other companies ( 172,371) ( 45,315) ( 134,800) ( 123,563) Decrease (increase) in loan to related companies ( 2,589) 151,588 ( 13,500) 28,600 Increase in minority interest in net income of subsidiaries 27,494 10,962 - - Excess of investments over net assets - ( 2,600) - - Increase in fixed assets ( 192,788) ( 156,724) ( 39,722) ( 21,575) Cash dividends from associated companies 241,356 137,469 241,356 138,344 Proceeds from increase in share capital of subsidiaries 138,443 - - - Proceeds from sales of investments 22,062 151,797 4,207 174,397 Proceeds from sales of fixed assets 44,994 25,486 7,259 4,366 Net Cash Provided by Investing Activities 106,601 272,663 64,800 200,569 CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in loans from financial institutions ( 119,838) ( 703,409) ( 81,339) ( 246,977) Increase in loans from directors 48 11,971 - - Decrease in long-term loans - net ( 16,664) ( 33,767) - - Decrease in loan and advance from related companies ( 35,324) ( 94,774) - - Net Cash Used in Financing Activities ( 171,778) ( 819,979) ( 81,339) ( 246,977) "UNAUDITED" "REVIEWED" - 4 - In Thousand Baht Consolidated The Company 1999 1998 1999 1998 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 217,205) 422,090 ( 223,471) 291,684 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIODS 1,662,895 980,263 1,515,167 1,003,235 CASH AND CASH EQUIVALENTS AT END OF PERIODS 1,445,690 1,402,353 1,291,696 1,294,919 Supplemental Disclosures of Cash Flows Information: Cash and cash equivalents consisted of: Cash on hand and at banks (excluded collateralized fixed deposits) 393,512 340,375 126,977 166,506 Short-term investments 1,361,443 1,329,920 1,166,719 1,135,379 Bank overdrafts ( 309,265) ( 267,942) ( 2,000) ( 6,966) Total 1,445,690 1,402,353 1,291,696 1,294,919 Cash paid during the periods for: Interest expense 142,456 557,330 22,859 386,045 Income tax 75,376 55,230 10,847 16,037 See accompanying Notes to Interim Financial Statements. (With Mr. Vichien Thamtrakul's report dated November 5, 1999) LOXLEY PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO INTERIM FINANCIAL STATEMENTS SEPTEMBER 30, 1999 AND 1998 "UNAUDITED", "REVIEWED" 1. EFFECT OF ECONOMIC CRISIS The interim financial statements for the three-month and nine-month periods ended September 30, 1999 have been prepared in conformity with the accounting assumptions to a going concern and included the effects of the economic crisis to the extent they are known and can be estimated. Starting from the middle of 1997, the operations of the Company and subsidiaries have been affected and continue to be affected to the date of this report by the volatility in Baht currency and adverse economic conditions in Thailand. In addition, the commencing in commercial operations of a subsidiary according to its operations' plan is uncertain due to certain legal issues. Even though, during the past year upto the present, the volatility in Baht currency was changed for the better, interest rates were lowered and more credit was provided by the financial institutions to the private sector, the general deterioration of the economies of countries in this region caused the slow recovery of the economy in Thailand. Management of the Company has developed plans and implemented certain measures to cushion the impact of the crisis. Among others, these include : a) reviewing the viability of certain investment projects. b) negotiating the debt restructuring of Euro Convertible Bonds with the bondholders. c) reducing the holding of investments in non-core businesses. d) establishing control procedures with the aim to improve productivity as well as implementing various cost reduction programs. The operations of the Company and subsidiaries have been affected, and may continue to be affected, for the foreseeable future by the adverse economic conditions in Thailand and Asia Pacific. The change in foreign currency exchange system has greatly increased burden on foreign liabilities in terms of Baht currency, especially, the liabilies from Euro Convertible Bonds (ECD) (Note 10). Because the redemption period will be effect in the near future, in consideration, thereon, the Company had appointed the financial advisors to provide assitance relating to the debt restructuring of these ECD. However, as at September 30, 1999, the eventual outcome of the debt restructuring plan cannot be presently determined. Therefore, the Company 's continuted operations as a going concern is dependent upon a) the success in the said debt restructuring plan b) the ability to operate profitable and to generate sufficient fund to meet the debts as well as being able to generate a sufficient amount of taxable income that - 2 - will fully utilize the deferred income tax. The accompanying interim financial statements do no include any adjustments relating to the recoverability of the assets and the restatement of liabilities at the amount which the Company and subsidiaries will have to pay or the classification of assets and liabilities that might be necessary should the Company and subsidiaries be unable to continue as a going concern. 2. PRINCIPLES OF CONSOLIDATION The accompanying interim consolidated financial statements included the accounts of Loxley Public Company Limited and the following subsidiaries owned directly and indirectly by Loxley Public Company Limited or the companies over which Loxley Public Company Limited has control as follow: Percentage of Shareholding As at September 30 1999 1998 Direct Indirect Direct Indirect Subsidiary Companies Loxley Business Information Technology Company Limited 99 - 99 - Loxley Myanmar Company Limited (not yet started principal commercial operations) 99 - 99 - Loxley Wireless Company Limited 99 - 99 - Jago Company Limited (not yet started principal commercial operations) 99 - 99 - Loxley Energy Company Limited (not yet started principal commercial operations) 99 - 99 - Loxley Utilities Services Company Limited 90 - 90 - Loxley Broadcast and Media Company Limited 74 - 60 - Loxley Comware Company Limited 70 - 70 - Loxley Newteck Company Limited 67 - 67 - Societed Commercial Lao Company Limited 67 - 67 - Loxley Pacific Company Limited 63 - 63 - - 3 - Percentage of Shareholding As at September 30 1999 1998 Direct Indirect Direct Indirect Loxley Infra Company Limited 60 - 60 - Loxley Pagephone Company Limited 55 - 55 - Loxley Satellite Communications Company Limited (not yet started principal commercial operations) 51 - 51 - Professional Computer Company Limited - 99 - 99 LoxData Company Limited - 99 52 - Netone Network Solution Company Limited - 98 - 98 Open Systems Integrator Company Limited - 92 - 83 Loxley Video Post (Bangkok) Company Limited - 74 - - Loxley Information Holding Limited - 67 - - Hutchison Telecommunications (Thailand) Company Limited - 55 - 55 Loxley Information Company Limited - - - 65 Loxley Information Services Company Limited - - - 65 Companies Over Which Loxley Public Company Limited Has Control Loxley Trading Company Limited 50 - 50 - Loxley Property Development Company Limited 40 - 40 - North - East Asia Telephone and Telecommunication Company Limited - 49 - 44 Loxley Information Company Limited - 43 - - Loxley Information Services Company Limited - 43 - - Loxley Video Post (Bangkok) Company Limited - - - 31 - 4 - Significant intercompany transactions with the above subsidiaries have already been eliminated. In August 1997, a subsidiary purchased all common shares of Hutchison from the Company and other shareholders. The subsidiary had to pay for the share capital exceeding the net assets value of Hutchison. As a result, the subsidiary (more)