SET Announcements

TRANSLATION REPORT OF INDEPENDENT AUDITOR To the shareholders of The Bangchak Petroleum Public Company Limited The Office of the Auditor General has reviewed the accompanying balance sheets as of September 30,1999 and 1998, the related statements of income, statements of changes in shareholderss equity and cash flows for the third quarter and nine months then ended of The Bangchak Petroleum Public Company Limited, in accordance with standards established by the Institute of Certified Accountants and Auditors of Thailand. A review of such interim financial statements consists principally of obtaining an understanding, by enquiries, of the system for preparation of the financial statements, making an analytical review of pertinent financial data and making enquiries of certain officials of the Company who have responsibility for financial and accounting matters. Our review is substantially less in scope than an audit in accordance with generally accepted auditing standards , the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Thus, the Office of the Auditor General does not express such an opinion on the financial statements referred to above. Based on our review, the Office of the Auditor General is not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the generally accepted accounting principles. The Office of the Auditor General requests the observation to Note 13 to the financial statements in regard to a remedy of year 2000 computer problem which is not a qualification and is not included in the opinion to the financial statements on this report. (Signed) Pradharn Darbphechra (Pradharn Darbphechra) Deputy Auditor General For Auditor General (Signed) Soontaree Chaichomloed (Soontaree Chaichomloed) Auditor-in-charge November 1, 1999 REVIEWED THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED BALANCE SHEETS AS OF SEPTEMBER 30,1999 AND 1998 1999 1998 Baht Baht ASSETS Current Assets Cash on hand and at banks 366,274,616 484,864,222 Short -term investments (Note 2)178,172,841 2,028,106,968 Trade accounts and notes receivable - Net (Note 3) 2,685,996,014 1,920,669,841 Inventories (Note 4) 4,881,791,883 3,421,169,338 Other current assets Materials and supplies 419,701,218 446,537,696 Others 561,062,815 448,210,911 Total Current Assets 9,092,999,387 8,749,558,976 Investments and Loans to Related Parties (Note 5) 449,159,393 427,082,035 Property,Plant and Equipment-Net Note 6) 18,321,800,096 18,641,135,738 Other Assets Deferred income tax (Note 7) 628,909,050 1,495,849,767 Deferred charges 184,867,792 195,809,352 Long term investment - service station 651,372,182 402,826,604 Others 42,485,575 17,064,616 TOTAL ASSETS 29,371,593,475 29,929,327,088 The accompanying notes are an integral part of these statements. (Signed) Somchai Richupan (Signed) Chiraya Isarangkun Na Ayuthaya (Somchai Richupan) (Chirayu Isarangkun Na Ayuthaya) Chairman Director LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Bank overdrafts and loans from financial institutions(Note 8) 7,830,025,028 6,424,749,314 Trade accounts payable 3,884,654,675 5,505,620,205 Current portion of long-term loan (Note 9) 1,864,597,340 585,526,450 Short-term loan from related parties - 15,430,000 Other current liabilities Accrued excise tax and oil stabilization fund 226,933,849 241,129,909 Accrued expenses 521,666,738 572,874,442 Others 419,874,570 312,901,681 Total Current Liabilities 14,747,752,200 13,658,232,001 Long - Term Loan (Note 9) 5,963,465,520 5,836,113,390 Other Liabilities Deferred Revenue 83,220,838 88,182,220 Others 194,185,660 37,404,182 Total Liabilities 20,988,624,218 19,619,931,793 Shareholders' Equity Share capital Authorized share capital Common stock 522,040,940 shares par value at Baht 10 per share 5,220,409,400 5,220,409,400 Issued and paid-up share capital Common stock 522,040,940 shares par value at Baht 10 per share 5,220,409,400 5,220,409,400 Paid - in capital Premium on share capital 2,007,950,671 2,007,950,671 Surplus on fixed assets revaluation (Note 4) 4,355,666,614 4,799,343,710 Retained earnings Appropriated Legal reserve 547,594,555 547,594,555 Unappropriated (3,734,154,829) (2,229,660,155) Deferred losses from foreign exchange fluctuations prior to year 1996 (14,497,154) (36,242,886) Total Shareholders' Equity 8,382,969,257 10,309,395,295 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 29,371,593,475 29,929,327,088 The accompanying notes are an integral part of these statements. REVIEWED THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED STATEMENTS OF INCOME FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 THIRD QUARTER FOR NINE MONTHS ENDED 30 SEP 1999 1998 1999 1998 Baht Baht Baht Baht Operating Revenues Sales 10,589,103,768 8,099,877,614 26,720,324,527 27,037,009,670 Other income Interest income 11,990,336 33,566,902 70,811,420 132,943,432 Earnings from associated companies (141,202) 2,721,050 1,556,079 5,621,598 Others 14,617,035 23,128,703 74,397,686 70,414,669 Total Revenues 10,615,569,937 8,159,294,269 26,867,089,712 27,245,989,369 Operating Expenses Cost of sales 9,666,507,061 7,690,959,252 24,618,546,731 25,530,588,465 Administrative and selling expenses 389,913,425 327,610,734 1,033,976,430 883,658,807 Interest Expenses (Note 10) 274,941,438 319,842,958 840,169,381 718,908,750 Directors' remuneratio 142,800 79,200 350,400 329,400 Losses (Gains) from foreign exchange fluctuations 839,459,167 (311,712,961) 806,429,782 (185,690,680) Total Expenses 11,170,963,891 8,026,779,183 27,299,472,724 26,947,794,742 Profit (Loss) before Income Tax (555,393,954) 132,515,086 (432,383,012) 298,194,627 Income Tax - 43,836,904 - 92,668,921 Deferred income tax loss 925,923,499 - 925,923,499 - Net Profit (Loss) (1,481,317,453) 88,678,182 (1,358,306,511) 205,525,706 Earnings Per Share (2.84) 0.17 (2.60) 0.39 The accompanying notes are an integral part of these statements. REVIEWED THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY AS OF SEPTEMBER 30,1999 Unit : Baht Share capital Premium on Surplus on Deferredlossesfrom Retained Total share capital fixed assets foreign exchange earning revaluation prior to year 1996 Balance at December 31,1997 5,220,409,400 2,007,950,671 5,164,565,549 (52,552,184) (1,872,631,149) 10,467,742,287 Accumulated adjustment - - - - (14,960,157) (14,960,157) Ending balance after adjustment5,220,409,400 2,007,950,671 5,164,565,549 (52,552,184) (1,887,591,306) 10,452,782,130 Items not recognised in the income statement (482,355,133) (482,355,133) Items recognised in the income statement 21,745,731 21,745,731 Net Profit for the period 59,337,543 59,337,543 Dividend paid - - Issued share capital - common stock - - - Balance at December 31,1998 5,220,409,400 2,007,950,671 4,682,210,416 (30,806,453) (1,828,253,763) 10,051,510,271 Items not recognised in the income statement (326,543,802) (326,543,802) Items recognised in the income statement 16,309,299 16,309,299 Net Profit for the period (1,358,306,511) (1,358,306,511) Dividend paid - - Issued share capital - common stock - - - Balance at September 30,1999 5,220,409,400 2,007,950,671 4,355,666,614 (14,497,154) (3,186,560,274) 8,382,969,257 The accompanying notes are an integral part of these statements. REVIEWED THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 THIRD QUARTER FOR NINE MONTH ENDED 30 SEP 1999 1998 1999 1998 Baht Baht Baht Baht Cash Flows from Operating Activities : Net Profit (Loss) (1,481,317,453) 88,678,182 (1,358,306,511) 205,525,706 Adjustment to reconcile net profit(loss) to net cash provided by operating activities : Depreciation 220,584,794 192,772,657 657,675,272 526,255,995 Bad debts and doubtful debts 12,691,735 - 23,153,668 - Amortization 74,482,600 94,760,822 237,807,020 256,535,966 Unrealized losses(gains) from foreign exchange fluctuations 815,463,339 (268,494,103) 817,856,295 (494,158,718) Deferred Income tax 925,923,499 43,836,904 925,923,499 92,668,921 Losses (gain) from fixed assets disposal 693,799 4,218,619 1,369,929 2,281,921 Pension fund (10,703,618) 368,216 (9,322,520) 1,104,649 Deferred revenue (1,513,960) (3,118,750) (9,729,536) (10,276,786) Income from related company - - (28,802,082) - Earnings from associated companies 141,202 (2,721,050) (1,556,079) (5,621,598) Trade accounts and notes receivable,( increase ) decrease (780,792,152) 302,262,016 (1,013,501,293) 654,168,056 Inventories ,(increase) decrease (1,558,817,787) (237,224,028) (2,615,941,953) 590,323,582 Other current assets,increase (156,546,042) 42,425,664 (239,336,169) (85,409,721) Trade accounts payable, increase ( decrease ) 1,067,756,616 (2,643,194,624) 1,101,152,284 (2,804,035,063) Other current liabilities, increase ( decrease ) (3,579,726) 52,844,423 (371,159,658) 158,736,702 Other liabilities, increase ( decrease ) 1,692,427 8,429,365 7,997,871 8,429,365 Net Cash Provided by (Used in) Operating Activities (873,840,727) (2,324,155,687) (1,874,719,963) (903,471,023) Cash Flows from Investing Activities : Short-term investments, increase (736,911) (1,823,017,792) (4,786,642) (1,976,407,168) Long-term investments,decrease - - 8,397,060 - Purchase of Property, plant and equipment, ( increase ) (145,303,038) (318,497,383) (382,669,452) (908,762,188) Other assets,increas(65,069,371) 9,030,419 (97,264,471) (75,366,690) Net Cash Used in Investing Activities (211,109,320) (2,132,484,756) (476,323,505) (2,960,536,046) The accompanying notes are an integral part of these statements. Cash Flows from Financing Activities : Bank overdrafts and loans from financial institution, increase (decrease) 1,560,323,958 4,703,702,372 1,037,093,659 1,500,566,087 Short-term loan from related parties - 9,180,000 - 15,430,000 Long-term loan (250,000,000) 137,767,158 908,133,083 652,463,011 Net Cash Provided by (Used in) Financing Activities 1,310,323,958 4,850,649,531 1,945,226,742 2,168,459,098 Increase ( Decrease ) in Cash and Cash Equivalents 225,373,911 394,009,088 (405,816,726) (1,695,547,971) Beginning Balance of Cash and Cash Equivalents 140,900,705 90,855,134 772,091,342 2,180,412,193 Cash and Cash Equivalents as of 30 September 366,274,616 484,864,222 366,274,616 484,864,222 Supplemental Cash Flow Information : Cash paid(refund) during the year for : I nterest expenses 221,697,722 177,883,254 839,486,941 572,942,241 Income tax 29,176,958 (120,537,791) 71,306,154 (58,465,324) The accompanying notes are an integral part of these statements. THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30,1999 AND 1998 1. The Preparation and Presentation of Financial Statements The financial statements are prepared accordance with the generally accepted accounting principles and the rules of Stock Exchange of Thailand. 2. Summary of Significant Accounting Policies 2.1 Recognition of revenue and expense The accounting transactions of the Company have been recorded on the accrual basis. Sale Sales are recognized as revenue when delivery of goods has occurred. Interest income Interest should be recognized on a time proportion basis that takes into account the effective yield on the asset. 2.2 Allowance for Doubtful Accounts The allowance for doubtful accounts is set-up based on debts deemed uncollectable from debtors as judged from the current status of each account receivable. 2.3 Inventories Finished petroleum products and crude oil are stated at cost or at net realizable value whichever one is lower, and is determined on the first-in first-out basis.For the year 1999, the Company has revised its accounting policy related to the inventory of lubrication oil from previously priced at cost or net realizable value whichever is lower, on a first-in-first-out basis, to a moving average method. 2.4 Materials and Supplies Materials and supplies are stated at cost determined by the moving average method. 2.5 Long-Term Investment to Related Parties 2.5.1 The investment equal to or over 20 % of the paid-up share capital is recorded on the equity method. 2.5.2 The investment less than 20 % of the paid-up share capital is recorded on the cost method. 2.6 Property, Plant and Equipment and Depreciation Property, plant and equipment are carried at cost. Interest expenses which are related to fixed assets, are booked to the cost of assets. Upon completion of the project , such interests are booked as expense. Depreciation is computed by the straight-line method at rates varying from 5% to 20% per annum based upon the estimated useful life of the assets. Property, plant and equipment are revalued every five year.The Company recorded the surplus value from the revaluation under account Surplus on fixed assets revaluation in Shareholders Equity, which is not available for dividend distribution.Depreciation on the increased value of the assets is deducted from the Surplus on fixed assets revaluation. 2.7 Income Tax Tax expense or tax income comprises current tax expense determined on the basis of the Revenue Code, and deferred income tax caculated from the temporary differences between net assets in balance sheet and that assets for tax purpose. 2.8 Deferred Charges The prepaid land lease for service stations are amortized within 20 - 30 years over the term of the land lease contract on a straight line basis.Deferred charges related to the exchange of buildings between the Company and the Defence Energy Department,of the Ministry of Defence is amortized over a contracted term of 20 years on a straight line basis.Other deferred charges are amortized within 5 years on a straight line basis. 2.9 Foreign Currencies 2.9.1 Foreign currency transactions are converted into Baht at the exchange rate on the date the transactions incurred . The outstanding balance as of the ending period is translated into Baht using the exchange rate as announced by the Bank of Thailand. Differences from foreign exchange translations are booked the total amount as income or expense except for foreign exchange losses prior to year 1996, which are booked as deferred expense and amortized over the period of the loan 2.9.2 Gains or losses resulting from debt repayment during the year are recorded as income or expense. 2.9.3 In cases where forward exchange contracts are made to minimize the risk exposure on foreign exchange of debts in foreign currency, the Company books the exchange rate as per the contract . The Premium associated with this is amortized over the period of the contract. 2.10 Deferred Revenue Deferred revenue, the advance lease income of equipments and others, are amortized over the term of the contract. 2.11 Pension Fund Reserve Pension Fund Reserve is established on the basis of the pension fund amounts payable to employees as of the end of each accounting year. For all employees who have completed five years service with the Company, a five percent of the pension amount is reserved. And for all employees due to retire over the period of the next five years , a 100 percent of the pension amount is reserved. 2.12 Registered Provident Fund The Company established a contributory provident covering substantially all employees. Members are required to make monthly contribution to the fund at either 5% or 10% of the members salaries depending on their choice and the Company is required to make monthly contribution at the same rate. 2.13 Borrowing Cost Interest expenses incurred from loan specifically for the construction of fixed assets and interest expenses on loan for general purposes but partly used for the construction are booked as construction cost until the project is completed and the asset is ready for its intended use. Upon completion of the project , such interests are booked as expense. 2.14 Public Offering Expenses Public offering expenses which include registered capital fee, underwriting fee and all other expenses incurred in connection with the public offering, are treated as an adjustment against the premium on share capital. 2.15 Earnings Per Share Earnings per share is calculated from the net profit (loss) divided by the weighted average of issued and paid-up share capital. 2.16 Expenditures for the Development and Modification of Computer Systems Expenditures for the development and modification of computer systems, which significantly increase its capacity and efficiency are booked as assets. Expenditures for solving the computer problems for the year 2000 are booked in total as expense in the accounting year the expenses occurred. 3. Trade Accounts and Notes Receivable - Net ( Accounting Policy 2.2 ) Million Baht 1999 1998 Trade accounts and notes receivable 2,774.10 1,974.24 Less Allowance for doubtful accounts 88.10 53.57 Trade accounts and notes receivable - net 2,686.00 1,920.67 As of September 30,1999, the Company has trade account receivables that have problems in repaying debts. The following is an age analysis of the outstanding amount of such debts. Million Baht over 3 - 6 months 3.99 over 6 - 12 months 14.79 over 12 months 114.13 Total 132.91 The Company has set up an allowance for doubtful accounts of Baht 88.10 Million. 4. Inventories ( Accounting policy 2.3 ) The change in the accounting method of recording the inventory of lubricant oil from the lower of cost or net realization value, on the first-in first-out basis, to the moving average basis has resulted in an increase in the September 30,1999 inventory value of the said product by Baht 0.05 million and an increase in the third quarter net loss by Baht 0.53 million. And a decrease in the nine months loss by Baht 0.05 million. 5. Investments and Loans to Related Parties ( Accounting Policy 2.5 ) As of September 30 ,1999 , the investments and loan to related parties of the Company in amount of Baht 449.16 million consists of investments in related parties of Baht 252.11 million ( on cost method of Baht 211.75 million and on equity method of Baht 40.36 million ) and Tariff Prepayment of Baht 197.05 million. The details of which are as follows :- 5.1 Investments in related parties Company Type of Relationship Paid -up Share Investment Dividend Business share holding (Million Baht) capital (%) As of 30 September Ratio (MillionBaht) Cost Method Equity Method 1999 1998 1999 1998 Associated company The Bangchak Green Net Co.,Ltd. Retail Business Share 1.00 49.00 - - 21.20 20.40 - and Service holding The Bangchak Green Line Co.,Ltd. Transportation Share 0.10 49.00 - - 3.00 2.92 - and service holding Mongkhol Chaipattana Co.,Ltd. Retail Busines Share 3.00 48.98 - - - 1.96 - and service holding The Bangchak Power Co.,Ltd. Power Generation Share 40.00 39.99 - - 16.16 15.16 - and steam production holding Related company Fuel Pipeline Transportation Ltd Transportatio Share 1,592.00 11.42 181.75 133.00 - - - and Service holding Auchan Chiang Mai Co.,Ltd. Wholesale, Share 300.00 10.00 30.00 30.00 - - - Retail Business holding Total 211.75 163.00 40.36 40.44 - Note The Company does not hold shares in The Mongkhol Chaipattana co.,ltd. since April 1999.For the third quarter ,the Company realized earnings from The Bangchak Green Net , The Bangchak Green Line and The Bangchak Power in the amounts of Baht (0.19) million , Baht (0.13) million and Baht 0.18 million, respectively. 5.2 Tariff Prepayment to the Fuel Pipeline Transportation Ltd. ( FPT ) An advance payment of transportation cost (Tariff Prepayment) was made to FPT as financial assistance in accordance with the Memorandum of Understanding of June 14, 1996. Following this, the Company, together with the other FPT creditors resolved on March 3 ,1999 to restructure the FPT loan. Prior to the loan restructure , the amount owed as Tariff Prepayment was Baht 245.80 million, of this,Baht 48.75 million was converted to capital stock (preferred stock) on April 30 ,1999. The balance of the debt will be repaid through the monthly deductions of the oil transportation cost , commencing from March 2000. 5.3 Transaction with the related parties for nine months ended September 30,1999 Million Baht Account receivable - Related parties 105.33 Account payable - Related parties 11.70 Sales - Fuel product 733.47 Transportation management fee 43.98 Throughput fee 62.47 Franchise fee - Lemon Green ( Minimart ) 4.18 6. Property, Plant and Equipment - Net ( Accounting Policies 2.6 and 2.13 ) Million Baht Dec 31,98 Increase Decrease Sep 30,99 Accumulated Net Book (more)