SET Announcements

expenditures which were previously recorded as assets (Note 4.2) - ( 72,877) - ( 72,877) As adjusted (2,450,509) (1,639,584) (2,311,781) (1,535,998) Net Income (Loss) ( 621,831) 63,349 ( 617,928) 52,209 Balance, end of period (3,072,340) (1,576,235) (2,929,709) (1,483,789) "UNAUDITED" "REVIEWED" - 2 - STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CONTINUED) In Thousand Baht Consolidated The Company June 30, June 30, June 30, June 30, 2000 1999 2000 1999 (Restated) (Restated) Minority interest in subsidiaries 389,154 416,229 - - Excess (lower) from change in value of available-for-sale securities (Notes 4.1 and 6.6) ( 845,632) 408,488 ( 845,632) 408,488 Cumulative translation adjustments ( 230,931) ( 166,197) ( 230,931) ( 166,197) SHAREHOLDERS' EQUITY - Net (1,112,192) 1,224,767 (1,358,715) 900,984 See accompanying Notes to Interim Financial Statements. (With Mr. Vichien Thamtrakul's report dated August 7, 2000) "UNAUDITED" "REVIEWED" LOXLEY PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2000 AND 1999 In Thousand Baht Consolidated The Company June 30, June 30, June 30, June 30, 2000 1999 2000 1999 (Restated) (Restated) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) ( 621,831) 63,349 ( 617,928) 52,209 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation 120,143 120,302 54,280 56,924 Provision for bonds redemption 158,523 177,977 158,523 177,977 Loss on foreign exchange rates 396,465 17,680 396,465 17,680 Set up (Reversal) provision for doubtful accounts 26,964 ( 720) - ( 1,291) Reversal of provision for decline in value of inventories ( 8,932) ( 7,257) ( 10,340) ( 7,265) Provision for doubtful accounts on interest on loans to related company 45,588 - 45,588 - Provision for decline in value of investment 1,463 - 1,463 - Provision for decline in value of income tax deducted at source 5,847 2,401 - - Excess of investments over net assets - amortization 7,233 9,218 - - Contribution to employees' provident fund - net 6,475 5,044 4,902 3,095 Gain on sales of investments - net ( 124) ( 5,413) ( 124) - Equity in results of operations of associated companies - net ( 156,438) ( 164,857) ( 207,112) ( 174,382) Equity in results of operations of subsidiaries - net - - 93,835 ( 28,130) Translation adjustment - 7,378 - - Loss (gain) on sales of fixed assets ( 8,456) 9,944 617 ( 4,670) Increase in collateralized fixed deposits ( 1,620) ( 389) - - "UNAUDITED" "REVIEWED" - 2 - In Thousand Baht Consolidated The Company June 30, June 30, June 30, June 30, 2000 1999 2000 1999 (Restated) (Restated) Decrease (increase) in receivables from related companies - trade and others ( 26,318) ( 109,041) 59,785 13,857 Decrease (increase) in accounts receivable-trade and others 238,791 ( 296,061) 120,383 ( 220,340) Decrease in inventories 30,739 125,305 15,901 118,156 Increase in deferred income tax - ( 56,808) - ( 56,808) Increase in other current assets ( 46,362) ( 31,816) ( 48,315) ( 60,245) Increase in income tax deducted at source ( 15,069) ( 9,551) ( 6,234) ( 4,849) Increase in refundable deposits and others ( 1,473) ( 39,413) ( 2,135) ( 3,808) Increase (decrease) in payables to related companies-trade ( 14,953) 21,086 10,622 ( 2,882) Decrease in accounts payable-trade ( 166,656) ( 87,143) ( 67,650) ( 13,817) Increase (decrease) in deposits and advance received from customers ( 50,094) 116,658 ( 18,927) 37,434 Increase (decrease) in income tax payable 5,638 ( 5,824) - - Decrease in employees' contribution to provident fund - net ( 2,145) ( 11,140) ( 574) ( 8,296) Increase in other current liabilities 137,303 6,060 105,819 17,527 Increase in other liabilities 56,048 11,413 - - Net Cash Provided by (Used in) Operating Activities 116,749 ( 131,618) 88,844 ( 91,924) "UNAUDITED" "REVIEWED" - 3 - In Thousand Baht Consolidated The Company June 30, June 30, June 30, June 30, 2000 1999 2000 1999 (Restated) (Restated) CASH FLOWS FROM INVESTING ACTIVITIES: Increase in investments of subsidiaries, associated, related and other companies ( 6,000) ( 168,961) - ( 130,000) Increase in loan to related companies ( 3,883) ( 7,164) ( 7,617) ( 14,500) Increase (decrease) in minority interest in net income of subsidiaries ( 42,975) 16,260 - - Increase in fixed assets ( 70,100) ( 69,172) ( 15,164) ( 28,484) Cash dividends from associated companies 186,050 135,558 211,050 135,558 Proceeds from sales of investments 4,411 23,650 4,411 - Proceeds from sales of fixed assets 13,508 43,519 10,694 6,503 Net Cash Provided by (Used in) Investing Activities 81,011 ( 26,310) 203,374 ( 30,923) CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in loans from financial institutions 62,167 ( 143,259) 29,527 ( 142,408) Increase in note payable - 10,000 - - Increase (decrease) in loans from directors ( 4,729) 48 - - Decrease in long-term loans - net - ( 16,664) - - Decrease in loan and advance from related companies ( 3,886) ( 34,501) - - Net Cash Provided by (Used in) Financing Activities 53,552 ( 184,376) 29,527 ( 142,408) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 251,312 ( 342,304) 321,745 ( 265,255) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,443,621 1,741,253 1,320,894 1,515,167 CASH AND CASH EQUIVALENTS AT END OF PERIOD 1,694,933 1,398,949 1,642,639 1,249,912 "UNAUDITED" "REVIEWED" - 4 - In Thousand Baht Consolidated The Company June 30, June 30, June 30, June 30, 2000 1999 2000 1999 (Restated) (Restated) Supplemental Disclosures of Cash Flows Information: Cash and cash equivalents consisted of: Cash on hand and at banks (excluded collateralized fixed deposits) 346,326 337,653 167,223 146,214 Short-term investments 1,544,271 1,258,895 1,478,219 1,108,248 Bank overdrafts ( 195,664) ( 197,599) ( 2,803) ( 4,550) Total 1,694,933 1,398,949 1,642,639 1,249,912 Cash paid during the period for: Interest expense 51,377 92,744 16,153 16,165 Income tax 44,376 49,328 6,234 4,849 See accompanying Notes to Interim Financial Statements. (With Mr. Vichien Thamtrakul's report dated August 7, 2000) LOXLEY PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2000 AND 1999 (REVEWED) AND DECEMBER 31, 1999 (AUDITED) 1. BASIS OF FINANCIAL STATEMENT PREPARATION The accompanying interim financial statements have been prepared in accordance with accounting standards No. 41 "Interim Financial Reporting" and the Accounting Regulations of the Stock Exchange of Thailand. The interim financial report is intended to provide an update on the financial statements for the year ended December 31, 1999. It focuses on new activities, events and circumstances. To avoid repetition of information previously reported, these interim financial statements should be read in conjunctions with the financial statements for the year ended December 31, 1999. The Company maintains its official accounting records in Thai Baht and prepares its statutory financial statements in the Thai language in conformity with financial accounting standards in Thailand, which may not conform with generally accepted accounting principles in other countries. The accompanying financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Thailand. Accordingly, the financial statements are not designed for those who are not informed about Thai accounting principles and practices. For the convenience of the reader, an English translation of financial statements has been prepared from the statutory Thai language financial statements which are issued for domestic reporting purposes. 2. EFFECT OF ECONOMIC CRISIS The accompanying financial statements have been prepared in conformity with the accounting assumptions for a going concern and include 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 has been affected and continue to be affected by the volatility in Baht currency and adverse economic conditions in Thailand. Even though, during the past year up to 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 : - 2 - 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 has 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 the burden on foreign liabilities in terms of Baht currency, especially, the liabilities from Euro Convertible Bonds (ECD) (Note 6.9). Because the redemption period will begin in the near future, the Company has appointed financial advisors to provide assistance relating to the debt restructuring of these ECD. The Company is still in the process of negotiating the conditions in the proposal submitted by the Steering Committee of Bondholders. The eventual outcome of such negotiation cannot be presently determined. Therefore, the Company's continued operation as a going concern is dependent upon a) success in the debt restructuring plan b) the ability to operate successfully and to generate sufficient funds to meet the debts as well as being able to generate a sufficient amount of taxable income that will fully utilize the deferred income tax. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of the assets or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 3. PRINCIPLES OF CONSOLIDATION The consolidated financial statements included the accounts of Loxley Public Company Limited and the following subsidiaries owned directly and indirectly by the Loxley Public Company Limited or the companies over which Loxley Public Company Limited has control. - 3 - Percentage of Shareholding As at June 30, 2000 December 31, 1999 Direct Indirect Direct Indirect Subsidiaries 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 - 74 - Loxley Comware Company Limited 70 - 70 - Loxley Newtech Company Limited 67 - 67 - Societed Commercial Lao Company Limited 67 - 67 - Loxley Pacific Company Limited 63 - 63 - 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 - 99 Open Systems Integrator Company Limited - 92 - 92 Loxley Video Post (Bangkok) Company Limited - 74 - 74 Hutchison Telecommunications (Thailand) Company Limited - 55 - 55 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 - 49 Significant intercompany transactions with the above subsidiaries have already been eliminated. In August 1997, a subsidiary purchased all of the common shares of Hutchison Telecommunications (Thailand) Company Limited (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 recorded the "Excess of Investment Over Net Assets" as part of "Other Assets" which is being amortized as expense over a period of 8 years. As at June 30, 2000, the unamortized balance amounted to approximately Baht 57.1 million. The Company has included the financial statements of Loxley Trading Company Limited, in which the Company invested 50% of the shareholding in May 1994, for consolidation since it had control over the investee. At the date of the acquisition of the shares in Loxley Trading Company Limited, the Company had to pay for the share capital exceeding the net assets value of that subsidiary. As a result, the Company recorded the "Excess of Investment Over Net Assets" as part of "Other Assets" which is being amortized as an expense over a period of 15 years. As at June 30, 2000, the unamortized balance amounted to approximately Baht 30.9 million. - 5 - During the third quarter of 1996, the Company invested 90% in the share capital of Loxley Utilities Services Company Limited. In this connection, the Company had to pay for the share capital exceeding the net assets value of that subsidiary. As a result, the Company recorded the "Excess of Investment Over Net Assets" as part of "Other Assets" which is being amortized as an expense over a period of 15 years. However, in the third quarter of 1999, the Company wrote-off the unamortized balance of approximately Baht 47.6 million as an expense in the consolidated financial statements because this excess of investment over net assets had no further benefit. During the third quarter of 1999, Point Asia Dot Com (Thailand) Limited (Formerly Loxley Information Holding Limited) (PAD), a subsidiary of Loxley Business Information Technology Company Limited (LOXBIT), sold out its additional increase in share capital amounting to Baht 7.3 million to third parties for Baht 138.4 million. Subsequently, LOXBIT sold a portion of investment in common shares of PAD to third parties, which affected the percentage of shareholding of LOXBIT in PAD reducing its to 66.67%. During the fourth quarter of 1999, PAD additionally increased share capital amounting to Baht 0.8 million, and sold its to LOXBIT at Baht 38 million. Consequently, the percentage of shareholding of LOXBIT in PAD increased from 66.67% to 67.77%. During the second quarter of 2000, PAD sold out its additional increase in share capital amounting to Baht 17.5 million to its third parties for Baht 1,086.9 million, which effected the percentage of LOXBIT in PAD reducing its to 41%. As a result, the equity in net assets of LOXBIT in PAD was increased by approximately Baht 505.1 million and Baht 76.9 million as at June 30, 2000 and December 31, 1999, respectively. Since the Company directly holds 99.99% of share in LOXBIT, therefore, the Company recognized this effect and presented its as a "Premium on capital in equity of subsidiary" as part of "Shareholders' Equity" in the balance sheets so that the percentage of directly and indirectly held or controled shares by LOXBIT decreased to become associated companies as follows: Point Asia Dot Com (Thailand) Limited (Formerly Loxley Information Holding Limited) PointAsia Dot Com Company Limited Loxley Information Company Limited Loxley Information Service Company Limited Netone Network Solution Company Limited - 6 - As a result, the consolidated interim financial statements for the three- month period and six-month period ended June 30, 2000 did not include those companies. However, the Company accounted these investments by the equity method. The Company, for comparative purposes, applied the change retroactively to the consolidated financial statements for the three-month period and six-month period ended June 30, 1999 and the consolidated financial statements for the year ended December 31, 1999. The effects of the restatement are as follows: Per Share Data In Thousand Baht Baht Ordinary Diluted Increase in the consolidated net income (loss) for the three-month period ended June 30, 1999 5,473 0.14 0.11 Increase in the consolidated net income (loss) for the six-month period ended June 30, 1999 4,767 0.12 0.09 Decrease in the consolidated deficit at (more)