FINANCIAL STATEMENTS QUARTER 1 - PL

PHATRA LEASING PUBLIC COMPANY LIMITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 2000 AND REVIEW REPORT OF CERTIFIED PUBLIC ACCOUNTANT EXPRESSED IN Thai Baht REVIEW REPORT OF CERTIFIED PUBLIC ACCOUNTANT To the Board of Directors of Phatra Leasing Public Company Limited I have reviewed the balance sheet of Phatra Leasing Public Company Limited as at December 31, 2000, and the related statements of income, changes in shareholders' equity, retained earnings and cash flows for the three-month periods ended December 31, 2000 and 1999. These financial statements are the responsibility of the Company's management as to their correctness and completeness of the presentation. My responsibility is to issue a report on these financial statements based on my review. I conducted my review in accordance with auditing standard applicable to review engagements. This standard requires that I plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit in accordance with generally accepted auditing standards. Accordingly, I do not express such an opinion. Based on my review, nothing has come to my attention that causes me to believe that the financial statements referred to above are not presented fairly, in all material respects, in accordance with generally accepted accounting principles. I have previously audited the financial statements of Phatra Leasing Public Company Limited for the year ended September 30, 2000, in accordance with generally accepted auditing standards and issued my report dated November 1, 2000, expressing an unqualified opinion on those financial statements. The balance sheet as at September 30, 2000, presented herein for comparative purposes, is a part of such audited financial statements. I have not performed any auditing procedures subsequent to such report date. The operations of the Company have been affected, and may continue to be affected for the foreseeable future, by the adverse economic conditions in Thailand and in the Asia Pacific region, including the volatile foreign exchange rates, slowdown in economic growth and the general deterioration of the economies of countries in the Asia Pacific region. Further, it is not possible to determine the future effect that a continuation of the economic crisis may have on the Company's liquidity and earnings. As of December 31, 2000, deferred income tax account included future tax benefit arising from loss carryforward amounting to Baht 2.9 million. Management strongly believes that the future tax benefit arising from loss carryforward can be utilized in the succeeding fiscal years. However, there are uncertainties that the above economic conditions may affect future operations and the adequacy of taxable income available against which such deferred income tax can be utilized. The accompanying financial statements do not include any adjustment that might result from these uncertainties. VICHIEN THAMTRAKUL C.P.A. (THAILAND) Registration No. 3183 Bangkok January 29, 2001 BALANCE SHEETS DECEMBER 31, 2000 AND SEPTEMBER 30, 2000 A S S E T S In Thousand Baht December 31, September 30, 2000 2000 "Unaudited" Note "Reviewed" "Audited" CURRENT ASSETS Cash on hand and in banks 3 19,484 6,635 Leasing receivables under operating lease contracts 45,869 47,662 Less allowance for doubtful accounts ( 34,216) ( 36,086) Leasing receivables under operating lease contracts - net 4 11,653 11,576 Receivables under finance lease contracts net of unearned interest income 168,638 184,423 Less allowance for doubtful accounts ( 84,263) ( 84,263) Receivables under finance lease contracts - net 3, 5 84,375 100,160 Other current assets 3 Prepaid expenses 24,346 22,820 Others 15,793 13,599 Total Current Assets 155,651 154,790 INVESTMENTS IN SHARES Associated company and related company net of allowance for impairment in value of investment of Baht 4.1 million for the period ended December 31, 2000 3, 6 245 245 Other company net of allowance for impairment in value of investment of Baht 5.0 million - - Total Investments in Shares 245 245 PROPERTY AND EQUIPMENT - Net 10 1,406,027 1,322,814 PROPERTY FORECLOSED - Net 47,013 54,641 OTHER ASSETS Deferred income tax - net 7 147,962 158,624 Other receivables net of allowance for doubtful accounts of Baht 51.9 million for the period ended December 31, 2000 and Baht 55.9 million for the year ended September 30, 2000 6,250 2,033 Others 14,734 17,526 Total Other Assets 168,946 178,183 TOTAL ASSETS 1,777,882 1,710,673 The accompanying notes are an integral part of these financial statements. BALANCE SHEETS DECEMBER 31, 2000 AND SEPTEMBER 30, 2000 LIABILITIES AND SHAREHOLDERS' EQUITY In Thousand Baht December 31, September 30, 2000 2000 "Unaudited" Note "Reviewed" "Audited" CURRENT LIABILITIES Bank overdrafts and loans from financial institutions 3, 9 91,534 3,221 Accounts payable trade 52,277 35,063 Debentures due within one year 8 350,000 - Current portion of long-term loans 3, 9 31,252 42,125 Payables to related companies 3 6,258 4,657 Other current liabilities Rental income received in advance 3 2,630 2,971 Accrued interest expense 3 11,450 10,550 Others 3 8,904 10,783 Total Current Liabilities 554,305 109,370 DEBENTURES 8 400,000 750,000 LONG-TERM LOANS FROM RELATED COMPANIES - Net 3, 9 77,445 119,672 ADVANCES RECEIVED FROM LESSEES FOR EXERCISING PURCHASE OPTION 3, 10 67,374 75,763 Total Liabilities 1,099,124 1,054,805 SHAREHOLDERS' EQUITY Share capital - common share; Baht 10 par value Authorized, issued and fully paid-up - 30,000,000 shares 300,000 300,000 Premium on share capital 156,000 156,000 Retained earnings Appropriated for legal reserve 15,000 15,000 Unappropriated 207,758 184,868 Total Shareholders' Equity 678,758 655,868 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,777,882 1,710,673 The accompanying notes are an integral part of these financial statements. "UNAUDITED" "REVIEWED" STATEMENTS OF INCOME FOR THE THREE-MONTH PERIODS ENDED DECEMBER 31, 2000 AND 1999 In Thousand Baht Note 2000 1999 REVENUES Rental income from operating lease contracts 3 162,101 163,552 Income from finance lease contracts 3 4,138 2,332 Other income Gain on sales of assets held for lease and property foreclosed 12,587 4,211 Others 3,656 3,021 Total Revenues 182,482 173,116 COSTS AND EXPENSES Direct rental costs 109,235 111,337 Interest expense 3 18,371 19,371 General and administrative expenses 3 20,880 19,084 Directors' remuneration 345 144 Total Costs and Expenses 148,831 149,936 INCOME BEFORE INCOME TAX 33,651 23,180 INCOME TAX ( 10,761) ( 7,169) NET INCOME 22,890 16,011 Earnings per Share (Baht) 0.76 0.53 The accompanying notes are an integral part of these financial statements. "UNAUDITED" "REVIEWED" STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE THREE-MONTH PERIODS ENDED DECEMBER 31, 2000 AND 1999 In Thousand Baht 2000 1999 Common Share Capital Balance, beginning of period 300,000 300,000 Addition - - Balance, end of period 300,000 300,000 Premium on Share Capital Balance, beginning of period 156,000 156,000 Addition - - Balance, end of period 156,000 156,000 Retained Earnings Appropriated Legal Reserve Balance, beginning of period 15,000 11,716 Addition - - Balance, end of period 15,000 11,716 Unappropriated Retained Earnings Balance, beginning of period 184,868 147,669 Net income for the period 22,890 16,011 Balance, end of period 207,758 163,680 TOTAL SHAREHOLDERS' EQUITY 678,758 631,396 The accompanying notes are an integral part of these financial statements. "UNAUDITED" "REVIEWED" STATEMENTS OF RETAINED EARNINGS FOR THE THREE-MONTH PERIODS ENDED DECEMBER 31, 2000 AND 1999 In Thousand Baht 2000 1999 UNAPPROPRIATED RETAINED EARNINGS: Brought forward from previous period 184,868 147,669 Net income for the period 22,890 16,011 Total Unappropriated Retained Earnings, End of Period 207,758 163,680 APPROPRIATED RETAINED EARNINGS Legal reserve 15,000 11,716 TOTAL RETAINED EARNINGS 222,758 175,396 The accompanying notes are an integral part of these financial statements. "UNAUDITED" "REVIEWED" STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIODS ENDED DECEMBER 31, 2000 AND 1999 In Thousand Baht 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES: Net income 22,890 16,011 Reconciliations of net income to net cash provided by (used in) operating activities: Depreciation and amortization 89,456 99,614 Gain on sales of assets for lease and property foreclosed ( 12,587) ( 4,211) Income from operating activities before changes in operating assets and liabilities 99,759 111,414 Decrease (increase) in operating assets Leasing receivables under operating lease contracts ( 76) 3,159 Receivables under finance lease contracts 15,784 14,789 Prepaid expenses and other current assets ( 3,721) 4,214 Property foreclosed ( 15,262) ( 1,629) Deferred income tax 10,662 7,058 Other assets ( 4,211) ( 4,086) Increase (decrease) in operating liabilities Accounts payable trade 17,214 ( 11,632) Other current liabilities ( 1,320) ( 1,130) Advances received from lessees for exercising purchase option ( 8,389) ( 336) Net Cash Provided by Operating Activities 110,440 121,821 CASH FLOWS FROM INVESTING ACTVITIES: Increase in property and equipment (198,975) (112,545) Proceeds from sales of assets for lease and property foreclosed 64,570 63,757 Net Cash Used in Investing Activities (134,405) ( 48,788) CASH FLOWS FROM FINANCING ACTIVITIES: Increase in short-term loans from financial institutions 20,000 - Increase (decrease) in short-term loans from and payables to related companies 61,602 (181,880) Increase in debentures - 350,000 Decrease in long-term loans from related companies ( 53,101) (234,588) Net Cash Provided by (Used in) Financing Activities 28,501 ( 66,468) NET INCREASE IN CASH AND CASH EQUIVALENTS 4,536 6,565 Cash and Cash Equivalents at Beginning of Period 3,414 38,896 CASH AND CASH EQUIVALENTS AT END OF PERIOD 7,950 45,461 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: Cash and cash equivalents consist of: Cash on hand and in banks 19,484 46,428 Bank overdrafts ( 11,534) ( 967) Net 7,950 45,461 Cash paid during the period for: Interest expense 17,471 20,631 Income tax 99 112 The accompanying notes are an integral part of these financial statements. NOTES TO INTERIM FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999 (REVIEWED) SEPTEMBER 30, 2000 (AUDITED) 1. BASIS FOR INTERIM FINANCIAL STATEMENTS The accompanying interim financial statements have been prepared in accordance with the Accounting Standards No. 41 "The Interim Financial Statements" and the announcements of the Stock Exchange of Thailand. The accompanying interim financial statements have been prepared to provide an update on the latest complete set of annual financial statements by focusing on new activities, events and circumstances and does not duplicate information previously reported. Accordingly, the accompanying interim financial statements should be read in conjunction with the financial statements for the year ended September 30, 2000. The Company maintains its official accounting records in Thai Baht and prepares its interim financial statements in the Thai language in conformity with financial accounting standards in Thailand, which were approved and announced by the Accounting Act B.E. 2543. The accounting standards applied by the Company 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, these 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 Thai language interim financial statements which are issued for domestic reporting purposes. 2. SIGNIFICANT ACCOUNTING POLICIES The accompanying interim financial statements have been prepared in accordance with the accounting standards issued by the Institute of Certified Accountants and Auditors of Thailand. The significant accounting policies adopted by the Company for the preparation of the accompanying interim financial statements for the three-month period ended December 31, 2000 are the same as those adopted in the preparation of the Company's financial statements for the year ended September 30, 2000. 3. TRANSACTIONS WITH RELATED COMPANIES The Company has certain transactions with its related companies. These companies are related through common shareholdings and/or management. The effects of these transactions are reflected in the accompanying financial statements. Significant account balances with the related companies, arising from transactions in the normal course of business, as of December 31, 2000 and September 30, 2000 and for the three-month periods ended December 31, 2000 and 1999 were as follows: In Thousand Baht December 31, September 30, 2000 2000 Balance Sheets Cash in bank (mainly represented Thai Farmers Bank Public Co., Ltd.) 18,746 5,892 Receivables under finance lease contracts- net 1,193 1,293 Prepaid expenses (mainly represented prepaid insurance - Muang Thai Insurance Co., Ltd.) 23,057 20,788 Other current assets 594 233 Investment in associated company and related company - net 245 245 Bank overdraft and loans from financial institution 71,534 3,221 NOTES TO INTERIM FINANCIAL STATEMENTS (Continued) DECEMBER 31, 2000 AND 1999 (REVIEWED) SEPTEMBER 30, 2000 (AUDITED) In Thousand Baht December 31, September 30, 2000 2000 Current portion of long-term loans 31,252 42,125 Payables to related companies 6,258 4,657 Rental income received in advance 118 88 Accrued interest expense 110 73 Other current liabilities 52 398 Long-term loans from related companies-net 77,445 119,672 Advances received from lessees for exercising purchase option 1,158 1,158 In Thousand Baht December 31, December 31, 2000 1999 Statements of Income Rental income from operating lease contracts (mainly represented Thai Farmers Bank Public Co., Ltd.) 68,399 51,947 Income from financial lease contracts 231 106 Interest expense (mainly represented Thai Farmers Bank Public Co., Ltd.) 5,625 17,127 General and administrative expenses 111 75 4. LEASING RECEIVABLES UNDER OPERATING LEASE CONTRACTS The 91 leasing receivables under operating lease contracts which may be uncollectible as at December 31, 2000, categorized by aging schedules, were as follows: In Thousand Baht Over 3 months to 6 months 4,505 Over 6 months to 12 months 11,093 Over 12 months 12,196 Total 27,794 The Company provided allowance for doubtful accounts covering leasing receivables under operating lease contracts equal to the estimated losses that may be incurred in the collection of receivables amounted to approximately Baht 34.2 million. 5. RECEIVABLES UNDER FINANCE LEASE CONTRACTS - Net In Thousand Baht December 31, September 30, 2000 2000 Receivables under finance lease contracts (including portion due within one year from December 31, 2000 amounting to Baht 103.1 million) 194,128 210,276 Less Unearned interest income (including portion due within one year from December 31, 2000 amounting to Baht 11.7 million) ( 25,490) ( 25,853) Allowance for doubtful accounts ( 84,263) ( 84,263) Net 84,375 100,160 NOTES TO INTERIM FINANCIAL STATEMENTS (Continued) DECEMBER 31, 2000 AND 1999 (REVIEWED) SEPTEMBER 30, 2000 (AUDITED) The 59 receivables under finance lease contracts which may be uncollectible as at December 31, 2000, categorized by aging schedules, were as follows: In Thousand Baht Over 3 months to 6 months 9,293 Over 6 months to 12 months 28,451 Over 12 months 35,342 Total 73,086 The Company provided allowance for doubtful accounts covering receivables under finance lease contracts equal to the estimated losses that may be incurred in the collection of receivables amounted to approximately Baht 84.3 million. 6. INVESTMENTS IN ASSOCIATED COMPANY AND RELATED COMPANY - At Cost In Thousand Baht Percentage December 31, 2000 September30, 2000 Company's Name Business Relation Type of Share of Holding(%) Investment Dividend Investment Dividend Associated Company Sarathi Co., Ltd. Car driving service Shareholder Common share 49 245 - 245 - Related Company Phatra Real Estate Public Company Limited Real Estate Shareholder Preferred share 0.4 4,082 - - - Less allowance for impairment in value of investment (4,082) - - - Total 245 245 (more)