SET Announcements

REPORT OF INDEPENDENT AUDITOR To the shareholder's of The Bangchak Petroleum Public Company Limited The Office of the Auditor General has audited the accompanying balance sheets as at December 31, 1999 and 1998, the related statements of income, statements of changes in shareholders equity, retained earnings and cash flows for the years then ended of The Bangchak Petroleum Public Company Limited. These financial statements are the responsibility of the Companys management as to their fair presentation and completeness of the information. The responsibility of the Office of the Auditor General is to express an opinion on these financial statements based on the audit. The Office of the Auditor General conducted the audit in accordance with the generally accepted auditing standards. Those standards require that the Office of the Auditor General plans and performs the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The audit includes examining, on a test basis , evidence supporting the amounts and disclosures in the financial statements. The audit also includes assessing the accounting principles applied and the significant estimates made by management, as well as evaluating the overall financial statement presentation. The Office of the Auditor General believes that the audit provides a reasonable basis for the opinion . In the opinion of the Office of the Auditor General , the financial statements referred to above present fairly, in all material respects, the financial position as at December 31, 1999 and 1998, and the results of operations and the cash flows for the years then ended of The Bangchak Petroleum Public Company Limited in accordance with generally accepted accounting principles. Office of the Auditor General Without qualifying our opinion , we wish to draw attention to the Note 3 in regard that in 1999, the Company has changed its accounting policy related to deferred charges in order to comply with the definition of the asset in framework for the preparation and presentation of financial statements, for which transaction is not asset, is recorded as expense.For comparison with this period, the Company has adjusted its financial statement for the year 1998 as though the Company has consistently followed the new accounting policy.This a djustment increased the accumulated net loss for the beginning period of 1998 by Baht 56.16 million and a decrease in the net profit and earnings per share for the period ending December 31,1998 by Baht 32.86 million and Baht 0.06 ,respectively. Besides the above , the Office of the Auditor General wish to draw attention to the Note 21 with regards to the accounting practice related to the expenditure for solving the year 2000 (Y2K) 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) Rushaneeboon Huansuriya (Rushaneeboon Huansuriya) Auditor-in-charge Office of the Auditor General February 15, 1999 THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED BALANCE SHEETS AS OF DECEMBER 31,1999 AND 1998 1999 1998 Baht Baht ASSETS Current Assets Cash on hand and at banks 690,095,663 772,091,342 Short -term investments 180,599,916 173,386,200 Trade accounts and notes receivable - Net (Note 4) 2,728,398,985 1,595,797,873 Inventories 4,985,356,039 2,265,849,929 Other current assets Materials and supplies 437,048,830 437,354,760 Others 654,023,094 419,018,129 Total Current Assets 9,675,522,527 5,663,498,233 Long Term Investment (Note 5) 30,000,000 163,000,000 Investments in Associated Companies (Note 6) 42,090,551 40,563,928 Tariff Prepayment (Note 7) 197,047,846 223,634,364 Property,Plant and Equipment-Net (Note 9) 16,759,019,546 17,803,756,812 Intangible Assets (Note 10) 1,271,290,328 1,291,317,158 Other Assets Deferred income tax (Note 11) 100,432,243 1,602,303,009 Long term investment - service station 669,209,444 386,485,145 Others 271,030,287 184,816,478 TOTAL ASSETS 29,015,642,772 27,359,375,127 The accompanying notes are an integral part of these statements. (Signed) Somchai Richupan (Signed) Sirichai Sakornratanakul (Somchai Richupan) (Sirichai Sakornratanakul) Chairman President LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Bank overdrafts and loans from financial institutions (Note 12) 7,839,118,511 6,211,041,253 Trade accounts payable 4,589,294,615 2,783,502,391 Current portion of long-term loan(Note 13) 2,467,348,427 1,063,565,000 Short-term loan from related parties - Other current liabilities Accrued excise tax and oil stabilization fund 358,484,053 255,579,163 Accrued expenses 439,120,860 486,543,280 Other accounts payable 47,603,860 315,272,741 Others 569,093,388 440,949,650 Total Current Liabilities 16,310,063,714 11,556,453,478 Long Term Loan (Note 13) 4,551,631,721 5,685,335,446 Other Liabilities Long term liabilies for lease right in service station lease right 216,433,358 17,991,221 Others 98,925,128 106,296,932 Total Liabilities 21,177,053,921 17,366,077,077 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 4,261,568,827 4,682,210,416 Retained earnings Appropriated Legal reserve 547,594,555 547,594,555 Unappropriated (4,198,934,602) (2,464,866,992) Total Shareholders' Equity 7,838,588,851 9,993,298,050 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 29,015,642,772 27,359,375,127 The accompanying notes are an integral part of these statements. THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1999 AND 1998 1999 1998 Baht Baht Revenues Sales (Note 14) 38,621,486,839 34,276,049,404 Other income Interest income 81,088,733 159,752,748 Earnings from associated companies 3,289,783 5,737,855 Gains from foreign exchange fluctuations(Note 15) - 428,139,414 Gains from crude oil and product oil price hedging contract - 23,650,021 Others 73,949,202 173,836,973 Total Revenues 38,779,814,557 35,067,166,415 Expenses Cost of sales 35,798,681,994 32,685,432,083 Administrative and selling expenses 1,106,900,066 1,047,054,168 Interest Expense 1,101,668,528 1,088,472,537 Directors' remuneration 464,400 468,600 Other Expense Depreciation 369,210,709 208,973,897 Losses from foreign exchange fluctuations (Note 15) 146,624,394 - Loss from impairment of assets 181,754,700 - Loss from crude and product oil price hedging contract 306,706,610 - Total Expense 39,012,011,401 35,030,401,285 Profit (Loss) before Income Tax (232,196,844) 36,765,130 Income Tax (Note 11) 1,501,870,766 10,284,854 Net Profit (Loss) (1,734,067,610) 26,480,276 Earnings Per Share (3.32) 0.05 The accompanying notes are an integral part of these statements. THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY AS OF DECEMBER 31,1999 Unit : Baht Share capital Premium on Surplus on Retained Total share capital fixed asset earning revaluation Balance at December 31,1997 5,220,409,400 2,007,950,671 5,164,565,549 (1,872,631,149) 10,520,294,471 Cumulated effect of the correction of a fundamental- - (71,121,564) (71,121,564) error and change in accounting policy Ending balance after adjustment 5,220,409,400 2,007,950,671 5,164,565,549 (1,943,752,713) 10,449,172,907 Items not recognised in the income statement (482,355,133) (482,355,133) Net Profit for the period 26,480,276 26,480,276 Dividend paid - - Issued share capital - common stock - - - Balance at December 31,1998 5,220,409,400 2,007,950,671 4,682,210,416 (1,917,272,437) 9,993,298,050 Items not recognised in the income statement (420,641,589) (420,641,589) Net Profit for the period (1,734,067,610) (1,734,067,610) Dividend paid - - Issued share capital - common stock - - - Balance at December 31,1999 5,220,409,400 2,007,950,671 4,261,568,827 (3,651,340,047) 7,838,588,851 The accompanying notes are an integral part of these statements. THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED STATEMENTS OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1999 AND 1998 1999 1998 Baht Baht Unappropriated Retained Earnings (Accumulated Deficit) At Beginning of Year (2,464,866,992) (2,420,225,704) Less Prior year adjustment - (71,121,564) Unappropriated Retained Earnings (Accumulated Deficit) after adjustment (2,464,866,992) (2,491,347,268) Less Dividend paid - - (2,464,866,992) (2,491,347,268) Net profit (loss) for the year (1,734,067,610) 26,480,276 Total unappropriated Accumulated Deficit (4,198,934,602) (2,464,866,992) Appropriated Retained Earnings Legal reserve 547,594,555 547,594,555 Total Accumulated Deficit (3,651,340,047) (1,917,272,437) The accompanying notes are an integral part of these statements. UNAUDITED THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1999 AND 1998 1999 1998 Baht Baht Cash Flows from Operating Activities : Net Profit (Loss) (1,734,067,610) 26,480,276 Adjustment to reconcile net profit(loss) to net cash provided by operating activities : Depreciation 927,709,086 737,546,891 Bad debts and doubtful debts 48,160,295 12,149,231 Amortization 173,186,964 122,082,739 Unrealized losses(gains) from foreign exchange fluctuations 34,249,924 (1,062,837,747) Losses from impairment of assets 181,754,700 - Income tax 1,501,870,766 10,284,854 Losses (gain) from fixed assets disposal (832,819) 2,636,123 Pension fund 2,987,562 1,369,374 Deferred revenue (12,683,241) (6,888,588) Income from related company (28,802,082) - Earnings from associated companies(3,289,784) (5,737,855) Trade accounts and notes receivable,( increase ) decrease (1,180,761,407) 867,040,276 Inventories ,(increase) decrease (2,719,506,109) 1,745,642,991 Other current assets,(increase) decrease (263,737,573) 183,017,677 Trade accounts payable, increase ( decrease ) 1,908,745,131 (5,348,496,553) Other current liabilities, increase ( decrease ) (120,659,850) 461,338,242 Other liabilities, increase ( decrease ) 2,323,876 (12,863,686) Net Cash Used in Operating Activities (1,283,352,171) (2,267,235,755) Cash Flows from Investing Activities : Long-term investments 8,397,060 - Purchase of Property, plant and equipment, ( increase ) (318,984,480) (1,501,179,742) Intangible Assets (63,259,315) (163,618,724) Other assets (214,580,471) (72,185,310) Net Cash Used in Investing Activities (588,427,206) (1,736,983,776) The accompanying notes are an integral part of these statements. Cash Flows from Financing Activities : Bank overdrafts and loans from financial institution 1,549,971,058 1,657,872,826 Long-term loan 247,026,356 996,905,754 Net Cash Provided by Financing Activities 1,796,997,414 2,654,778,580 Increase ( Decrease ) in Cash and Cash Equivalents (74,781,963) (1,349,440,951) Cash and Cash Equivalents as of 1 January 945,477,542 2,294,918,493 Cash and Cash Equivalents as of 31 December 870,695,579 945,477,542 Supplemental Cash Flow Information : Cash paid(refund) during the year for : Interest expenses 1,217,112,041 856,302,462 Income tax 104,818,033 (34,785,120) The accompanying notes are an integral part of these statements. BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,1999 AND 1998 1. The Preparation and Presentation of Financial Statements The financial statements are prepared in accordance with the generally accepted accounting principles and the rules of The 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. Sales Revenue Sales are recognized as revenue when delivery of goods has occurred. Return on Business Investment Return on Business Investment is recognized in accordance with the substance of the contract. Interest income Interest is 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 the lower of cost determined by the first-in first-out basis or net realizable value. lubrication oils are stated at the lower of cost determined by weighted average or net realizable value . 2.4 Materials and Supplies Materials and supplies are stated at cost determined by the weighted average method. 2.5 Long-Term Investment Long term investment in non-marketable securities are presented at cost less impairment of investment. 2.6 Investment in Associated Companies Investment in associated companies are recorded on the equity method. 2.7 Property, Plant and Equipment and Depreciation Property, plant and equipment are carried at cost less accumulated depreciation and impairment of the assets. They are revalued every five years by an independent appraiser and are presented at a revalued amount less accumulated depreciation and impairment of the assets. The surplus value from the revaluation is recorded under the account Surplus on fixed assets revaluation in Shareholders Equity. In the event the revalued amount in lower than cost, the decreased portion is charged against the surplus amount dereived from the previous revaluation of the fixed assets until the surplus balance in fully depleted after which the remaining charges will be booked to profit and loss in that same accounting period. Depreciation of buildings, machineries and equipments are computed on a straight-line method based on the estimated useful life of the assets. The details of which are as follows :- Type of Assets Year Building 20 Machinery 20 Equipment 5 Equipments with value not over Baht 10,000 each and service station asset costing less than Baht 500 each are booked as expenses in the period of purchase. Expenditure on repairs or maintenance of buildings , machineries and equipments which extend the useful life of such assets or increase their capacity are recorded as capital expenditure. Whereas the maintenance and repair costs of buildings, machineries and equipments to have them perform to the standard level initially assessed are booked as expense in the period they occurred. 2.8 Borrowing Cost Interest expenses incurred from loan esspecially used for the construction of fixed assets are booked as cost of assets until the assets are ready for their intended use. Such interest expenses are derived from the total amount of interests paid less the revenue received from the loan being temporary used for short term investments. Interest expense on loan for general purpose but partly used for the construction of fixed assets are capitalized. The capitalization of such interest are computed by multiplying the interest rate against the average assets costs during construction . Upon completion of the construction project , the interests cost is booked to expense. 2.9 Intangible Assets Intangible assets consist of leasehold ,license and develoment cost of cumputer software. They are presented at cost deducted by accumulated amortization. Leasehold rights are the rights obtained from the land lease ontracts which are amortized on a straight-line method over the contractural period of 30 years License and development costs of computer software cover expenditures to enhance future economic benefit to the company of more than one year. They are amortized within five years on a straight line basis. 2.10 Deferred Income Tax The Company calculates the deferred income tax from the temporary differences between net book value of the assets and their tax base. The temporary differences arise from allowance for doubtful accounts, impairment of assets and pension fund reserve. 2.11 Foreign Currencies Foreign currency transactions are converted into Baht at the exchange rate on the date the transactions incurred . The assets and liabilities in foreign currencies at 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. Gains or losses resulting from debt repayment during the year are recorded as income or expense. 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. 2.12 Crude and Product Oil Price Hedging Contract Selling and buying forward crude and product oil contracts are made to reduce the risk of changes in the oil price. The Company records the difference between the oil price in the contract and market price as income or expense when incurred. 2.13 Deferred Revenue Deferred revenue, the advance lease income of equipments and others, are amortized over the term of the contract. 2.14 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. 2.15 Legal Reserve The Company sets up the appropriation for a legal reserve at least 5 % of its net profit less accumulated deficit brought forward (if any) until the reserve is not less than 10 % of authorized share capital. 2.16 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. 2.17 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. 2.18 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. 2.19 Cash and cash equivalence Cash and cash equivalence in the statement of cash flow are defined as cash on hand and at banks and deposits at banks and financial institutions which are due within 3 months. 3. Change of the Accounting Policy For the year 1999, the Company has changed its accounting policy related to deferred charge in order to comply with the definition of the asset in Framework for the preparation and presentation of financial statements, for which transaction is not asset, is recorded as expense. For comparisons with this period, the Company has adjusted the financial statement for the year 1998, as though the Company had consistently f ollowed the new accounting policy.The adjustment increased the accumulated net loss for the beginning period of 1998 by Baht 56.16 million ,and a decrease in net profit in 1998 by Baht 32.86 million and a decrease in earnings per share by Baht 0.06.The result of the accumulated adjustments from the past to the beginning of the years 1999 and 1998 is presented under item cumulative effect of the correction of a fundamental error and change in accounting policy in the statement of change in shareholders equity. 4. Trade Accounts and Notes Receivable - Net ( Accounting Policy 2.2 ) Million Baht 1999 1998 Notes receivable 268.75 158.89 Trade accounts receivable 2,568.52 1,502.64 Less Allowance for doubtful accounts 108.87 65.73 Trade accounts and notes receivable - net 2,728.40 1,595.80 As of December 31,1999, 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 1.91 over 6 - 12 months 12.08 over 12 months 142.01 Total 156.00 The Company has set up an allowance for doubtful accounts (more)