F/S Quarter 1 (As of December 31,1997)

PHATRA LEASING PUBLIC COMPANY LIMITED INTERIM FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED DECEMBER 31, 1997 (With Comparative Figures for The Three-Month Period Ended December 31, 1996) AND AUDITORS' REPORT EXPRESSED IN Thai Baht The Shareholders Phatra Leasing Public Company Limited We have made a review of the balance sheet of Phatra Leasing Public Company Limited as at December 31, 1997, and the related statement of income for the three-month period then ended, in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. The financial statements for the three-month period ended December 31, 1996, which are presented for comparative purposes, were reviewed by other auditors whose report was dated February 3, 1997 and stated the conclusion that such auditors were not aware of any material modifications that should be made to the said interim financial statements for them to be in conformity with generally accepted accounting principles. A review of interim financial statements consists principally ofobtaining an understanding of the system for the preparation of interim financial statements, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an option regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the interim financial statements for the three-month period ended December 31, 1997, for them to be in conformity with generally accepted accounting principles. The financial statements of Phatra Leasing Public Company Limited for the year ended September 30, 1997 were audited by other auditors, who expressed an unqualified opinion thereon under the report dated November 14, 1997. PRASIT MUSIKABHANTU C.P.A. (THAILAND) Registration No. 2675 February 6, 1998 UNAUDITED REVIEWED PHATRA LEASING PUBLIC COMPANY LIMITED BALANCE SHEET DECEMBER 31, 1997 (With Comparative Figures As At December 31, 1996) A S S E T S In Baht 1997 1996 CURRENT ASSETS (Note 3) Cash on hand and in banks 19,669 14,048 Short-term investment in promissory notes 10,000 - Leasing receivables under operating lease contracts - net 68,081 67,287 Receivables under finance lease contracts - net 530,009 1,050,266 Prepaid expenses 28,535 47,287 Other current assets 32,908 47,064 Total Current Assets 689,202 1,225,952 INVESTMENTS IN SHARES OF ASSOCIATED AND OTHER COMPANIES (Note 3) 5,245 5,245 PROPERTY AND EQUIPMENT - Net 1,751,435 1,848,476 PROPERTY FORECLOSED - Net 49,121 18,264 OTHER ASSETS Deferred income tax 169,808 162,823 Other receivable 41,860 47,840 Withholding tax deducted at source and others 6,558 1,360 Total Other Assets 218,226 212,023 TOTAL ASSETS 2,713,229 3,309,960 See accompanying Notes to Interim Financial Statements. (With Mr. Prasit Musikabhantus report dated February 6, 1998) UNAUDITED REVIEWED PHATRA LEASING PUBLIC COMPANY LIMITED BALANCE SHEET DECEMBER 31, 1997 (With Comparative Figures As At December 31, 1996) LIABILITIES AND SHAREHOLDERS EQUITY In Baht 1997 1996 CURRENT LIABILITIES (Note 3) Bank overdrafts and loans from banks 509,939 340,806 Notes payable - 115,000 Accounts payable - trade 42,180 50,149 Current portion of long-term loans 820,900 - Loans from and payables to related companies 355,004 403,518 Rental income received in advance 12,151 12,062 Accrued interest payable 41,634 44,586 Income tax payable - 61,182 Accrued expenses and other current liabilities 9,616 15,868 Total Current Liabilities 1,791,424 1,043,171 LONG TERM LOANS - Related Company (Note 3) 100,000 100,000 - Other Companies - 1,274,168 AMOUNT RECEIVED IN ADVANCE FOR EXERCISING PURCHASE OPTION (Note 3) 114,351 139,482 Total Liabilities 2,005,775 2,556,821 SHAREHOLDERS EQUITY Share capital - common shares, Baht 10 par value Authorized and fully paid-up - 30,000,000 shares 300,000 300,000 Premium on share capital 156,000 156,000 Retained earnings Appropriated for reserve fund 9,216 7,696 Unappropriated 242,238 289,443 Total Shareholders Equity 707,454 753,139 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 2,713,229 3,309,960 See accompanying Notes to Interim Financial Statements. (With Mr. Prasit Musikabhantus report dated February 6, 1998) UNAUDITED REVIEWED PHATRA LEASING PUBLIC COMPANY LIMITED STATEMENT OF INCOME FOR THE THREE-MONTH PERIOD ENDED DECEMBER 31, 1997 (With Comparative Figures For The Three - Month Period Ended Dece mber 31, 1996) In Baht 1997 1996 REVENUES (Note 3) Rental income from operating lease contracts 227,077 199,013 Income from finance lease contracts 20,510 32,709 Other income 8,581 6,913 Total Revenues 256,168 238,635 COSTS AND EXPENSES (Note 3) Direct rental cost 156,159 129,507 General and administrative expenses 48,384 27,063 Interest expense 61,561 56,348 Directors remuneration 72 238 Total Costs and Expenses 266,176 213,156 INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (10,008) 25,479 CUMULATIVE EFFECT OF ACCOUNTING CHANGE (Note 1) (19,616) - INCOME (LOSS) BEFORE INCOME TAX (29,624) 25,479 INCOME TAX - 9,010 NET INCOME (LOSS) (29,624) 16,469 Earnings (Loss) per Share (Baht) Income (loss) before cumulative effect of accounting change (0.33) 0.55 Cumulative effect of accounting change (0.65) - Net income (loss) (0.98) 0.55 Pro Forma Amounts Net income (loss) (10,008) 14,869 Earnings (loss) per share (0.33) 0.50 See accompanying Notes to Interim Financial Statements. (With Mr. Prasit Musikabhantus report dated February 6, 1998) PHATRA LEASING PUBLIC COMPANY LIMITED NOTES TO INTERIM FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 1. ACCOUNTING CHANGE Starting from October 1, 1997, the Company changed the method o f the recognition of rental income from operating lease contracts and income from finance lease contracts for lessees who had not paid rentals for more than six months, which was previously recog nized as income on the accrual basis over the term of leases. Un der the changed method, such income is recognized on the accrual basis only for six months on the ground of conservatism of revenu e recognition. As a result of the change , revenues for the thre e-month period ended December 31, 1997 reduced by approximately B aht 8.6 millon. The cumulative effect of this change up to Septe mber 30, 1997 was separately presented in the statement of income . 2. EARNINGS (LOSS) PER SHARE Earnings (Loss) per share is determined by dividing the net inc ome (loss) by the number of shares outstanding at the end of the periods. 3. TRANSACTIONS WITH RELATED COMPANIES The Company has certain transactions with its related companie s. These companies are related through common shareholdings and/ or management. The effects of these transactions are reflected i n the accompanying financial statements. Investment in shares of an associated company which is held for long-term purpose is valued at cost. The Company has not adjust ed the investment in shares of the associated company to the equi ty method since the effect is not material. - 2 - Significant account balances with the related companies, arisin g from transactions in the normal course of business, as of Decem ber 31, 1997 and 1996 and for the three - month periods then ende d were as follows: In Thousand Baht 1997 1996 Cash at banks 19,531 13,961 Promissory notes 10,000 - Leasing receivables under operating lease contracts 1,376 5,001 Receivabes under finance lease contracts - net 11,036 29,369 Prepaid expenses and other current assets 20,764 31,439 Bank overdrafts and loans from banks 389,675 140,019 Short-term loans from and payables to related companies 355,004 403,518 Long-term loan from related company 100,000 100,000 Accrued expenses and other current liabilities 567 321 Amount received in advance for exercising purchase option 1,469 5,929 Rental income from operating lease contracts 32,631 16,939 Income from finance lease contracts 388 1,178 General and administrative expenses 152 203 Interest expense 14,827 23,071 4. CONTINGENT LIABILITY As at December 31, 1997, the Company was contingently liable fo r letters of guarantee issued by a local bank amounting to approx imately Baht 0.5 million. 5. RECLASSIFICATION OF ACCOUNTS Certain accounts in the 1996 interim financial statements were reclassified to conform with the 1997 interim financial statement s presentation.