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Cash flows from investing activities Decrease in short-term investments 10,027 17,731 (122) 12,351 Loan to subsidiaries - - (2,800) (2,240) Proceeds from repayment of loans by subsidiarie - - 8,854 19,439 Proceeds from repayment of loans by other company 670 - 670 - Proceeds from sale of investment 200 - 200 - Acquisition of property and equipment (4,312) (1,200) (4,282) (482) Proceeds from sale of property and equipment 11 379 7 379 Net cash from investing activities 6,596 16,910 2,527 29,447 Cash flows from financing activities Proceed from (repayment on) loans from financial institutions - Net (5,229) (30,855) (222) 1,561 Proceed from long term borrowing 32,544 - 32,544 Repayments of long term borrowing (20,332) (49,359) - (28,415) Proceed from loans from subsidiaries - - - 8,000 Repayments of loans from subsidiaries - - (8,397) (5,412) Net cash from (used in) financing activities 6,983 (80,214) 23,925 (24,266) Net (decrease) increase in cash and cash equivalents (6,033) 49,750 3,339 23,519 Beginning balance 26,696 20,887 12,811 8,350 Ending balance 20,663 70,637 16,150 31,869 Supplementary cash flow information Cash and cash equivalents at beginning of period comprise: Cash and cash at financial institutions 52,466 20,887 12,811 8,350 Less: Cash at banks used as guarantee (25,770) - - - 26,696 20,887 12,811 8,350 Cash and cash equivalents at end of period comprise: Cash and cash at financial institutions 36,282 70,637 16,150 31,869 Less: Cash at banks used as guarantee (15,619) - - - 20,663 70,637 16,150 31,869 The notes to the interim consolidated and company financial statements on pages 14 to 27 form an integral part of these interim financial statements. Noble Development Public Company Limited Note to the interim consolidated and company financial statments (Unaudited) For the nine-month periods ended 30 September 2000 1 Principal accounting policies The interim consolidated and company financial statements are prepared in accordance with the accounting principles generally accepted in Thailand, and are presented in the condensed format as required by Thai Accounting Standard No. 41, "Interim Financial Reporting" with additional disclosures, in case of the primary financial statements (i.e. balance sheets, statements of income, changes in shareholders equity, retained earnings and cash flows) based on the format prescribed by the Ministerial Regulation No. 7 (B.E. 2539) in accordance with the requirements of Securities and Exchange Commision and the Stock Exchange of Thailand.The accounting policies used in the preparation of the interim financial statements are consistent with those used in the annual financial statements for the year ended 31 December 1999. The Group has implemented the following new Thai Accounting Standards relevant to the Group, effective 1 January 2000, in these interim financial statements: TAS 43 - Business Combination TAS 44 - Consolidated Financial Statements and Accounting for Investment in Subsidiaries TAS 45 - Accounting for Investment in Associates TAS 47 - Related Party Disclosures The Comparatives have been adjusted or extended to take into account the requirements of those newly effective standards and have been reclassified for comparative purpose. Costs that are incurred unevenly during the financial year are recognised as expense or deferred in the interim report only if it would be also appropriate to recognise or defer such costs at the end of the financial year. These interim financial statements should be read in conjunction with the 1999 annual financial statements. Subsidiaries are companies that GE Siam Information Services Company Limited exercises control over the financial policy or operation to derive benefits from the operations. Subsidiaries included in interim consolidated financial statement comprise the following. Paid-up Percentage of direct and Share capital indirect holding by the group 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Principal Million Million Activities Baht Baht Percent Percent Wipa View Co., Ltd. Real Estate 200.0 200.0 100.00 100.00 Continental City Co.,Ltd. Real Estate 40.0 40.0 100.00 100.00 World Time Holding Co., Ltd. Real Estate 15.0 15.0 100.00 100.00 Bang Plee View Co., Ltd. Real Estate 10.0 10.0 100.00 100.00 Research & Consultant Co., Ltd. Real Estate 10.0 10.0 65.00 65.00 Ban Suk Sabai Co., Ltd. Real Estate 2.0 2.0 100.00 100.00 S&P Property Management Co., Ltd. Real Estate 2.0 2.0 100.00 100.00 Ban Siam Co., Ltd. Real Estate - 102.0 - 100.00 Business segment and geographical segment information GE Siam Information Services Company Limited and its subsidiaries engage mainly in real estate developments for sale in Thailand. Revenues from other business segments are currently immaterial to the consolidated financial statements to warrant the presentation of business/geographical segment information. 2 Significant unusual items charged to operating profit (loss) The following items of unusual nature have been charged to the operating profit (loss) during the nine-month periods ended 30 September 2000 and 1999. Consolidated Company 30 September 30 September 30 September 30 September 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 a) Gain from cancelled contract - 51,301 - 5,557 b) Debt forgiveness by construction contractor 22,135 - - - c) Gain from sale of investment 65,895 - 65,895 - d) Gain from extinguishment of debt - 29,406 - 29,406 e) Loss from disposition of real estate under debt restructuring agreements - 177,370 - 161,920 f) Loss on cancellation of deposit for purchase of land - 32,940 - 32,940 a) In 1999, the Company and its subsidiary had cancelled certain sales contracts where the sales and cost of sales from these contracts were fully recognised. The deposits from these contracts were forfeited. b) Debt forgiveness by construction contractor comprised the forgiveness by contractor in the first quarter and the third quarter of year 2000 amounting to Baht 17.18 million and Baht 4.95 million, respectively. During the first quarter and the third quarter of year 2000, construction contractors of subsidiaries had forgiven the debt due to the contractor including the retention money amounting to Baht 19.63 million and Baht 5.23 million, respectively. As a result, the subsidiary recorded them as a reduction in cost of sales of Baht 15.36 million and Baht 2.06 million and recorded gain from debt forgiveness of Baht 1.82 million and Baht 2.89 million, respectively. c) In June 2000, the Company sold an investment in Ban Siam Company Limited, a subsidiary which the company held 100% interest. Details of assets and liabilities of Ban Siam on the selling date are disclosed in the note to financial statements No 11. d) On 6 June 1994, the Company issued a 4-year 8% non-convertible bonds amounting to Baht 500 million with a par value of Baht 1,000.00 each and with interest payable semi-annually. The bond was due on 15 June 1998. During the third quarter of year 1999, the Company agreed to off-set the non-convertible bonds held by a bond holder worth Bath 30.00 million plus Baht 5.37 million accrued interest with the Companys investment in bonds issued by that bond holder. This transaction resulted in the Companys gain of Baht 29.41 million. e) During the third quarter of year 1999, the Company had concluded a debt restructuring deal that resulted in a loss as follow: Consolidated Company Baht000 Baht000 Real estate development cost - Book value 331,660 292,720 - Transferred value as per debts restructuring agreement (154,290) (130,800) Loss from disposition of assets under debts restructuring agreement 177,370 161,920 f) In 1999, due to the economic crisis, the company was unable to make a final payment per contract to purchase land when the contract was due. Hence, the deposit of Baht 32.94 million had been forfeited. 3 Earnings (loss) per share Basic earnings (loss) per share is calculated by dividing the net profit (loss) attributable to common shareholders by the weighted average number of ordinary shares in issue during the period. (2000: 91,356,513 shares; 1999: 55,000,000 shares.) 4 Property and equipment For the nine-month period ended 30 September 2000 Consolidated Company Property and Property and equipment equipment Baht'000 Baht'000 Opening net book amount, -As previously reported 230,276 96,895 -Prior year adjustment (Note 13) (82,898) (63,271) Opening net book amount, as restated 147,378 33,624 Additions 4,312 4,282 Disposals (648) (17) Sale of a subsidiary (Note 11) (25,909) - Depreciation charge (9,197) (5,306) Closing net book amount 115,936 32,583 5 Other assets Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht '000 Deposits for investment 36,000 36,000 36,000 36,000 Other assets 14,020 21,888 7,685 12,356 Total 50,020 57,888 43,685 48,356 6 Loans from financial institutions Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht' 000 Baht' 000 Baht' 000 Baht' 000 Long term loans from financial institutions 191,500 381,458 32,544 - Less Current portion of long-term loans (191,500) (251,460) (32,544) - Long term loans from financial institutions - 129,998 - - The movements in the borrowings can be analysed as follows: For the nine-month period ended 30 September 2000 Consolidated Company Baht 000 Baht 000 Opening amount 381,458 - New borrowing 32,544 32,544 Repayment of borrowings (20,332) - Sale of liabilities in a subsidiary (Note 11) (202,170) - Closing amount 191,500 32,544 The Companys loan is a Thai Baht loan from local financial institutions. The terms of repayment are in proportion to the time of release of mortgage by the company upon transfer of land to the customers. The above repayment schedule is based on the longest repayment due from customers. The loans bear interest at the rate of Minimum Lending Rate (MLR) plus 0.25 per annum. The loan is secured by the mortgage of the Companys land held for development. The Groups loan is a Thai Baht loan from local financial institutions. The terms of repayment are in proportion to the time of release of mortgage by the company upon transfer of land to the customers. The above repayment schedule is based on the longest repayment due from customers The loans bear interest at the rates of 5.00% - 9.00% per annum (1999: 5.00% - 14.50% per annum). These loans are secured by the mortgage of land and assets included in project development costs of subsidiaries. 7 Long-term bonds On June 6, 1994, the shareholders at the Extraordinary Meeting passed a resolution to approve newly issued 8% non-convertible bonds totaling Baht 500 million at par value of Baht 1,000.00 each. Interest was paid semi-annually. The bonds were due for redemption on 15 June 1998. As of 31 December 1999, the Company issued new convertible debentures to settle the above non- convertible bonds issued on 6 June 1994. A total of 425,000 convertible debentures worth Baht 425 million had been converted into 12.75 million common shares of the company following the debts restructuring. As at 30 September 2000, a total of outstanding non-convertible bonds where the original bondholders have not exchanged for new convertible bonds amounted to Baht 30 million. At present, one of the bondholders has sent a notice to the Company to request for full settlement of his bond principal of Baht 15 million. 8 Other current liabilities Consolidated Company 30 September 31 December 30 September 31 December 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Accrued interest expenses 12,007 97,929 11,900 6,507 Accrued expenses 10,323 7,157 8,045 5,978 Others 25,596 37,469 6,018 6,993 Total 47,926 142,555 25,963 19,478 9 Share premium Share premium included an amount of Baht 297.5 million incurred from the conversion of Convertible Debentures ("CD") to 12.75 million shares of the company between October 1999 to December 1999. In 1999, the company issued 425,000 units of the CD for the settlement of the non-convertible bonds totaling Baht 425 million which were due for payment in 1998. The CD could be converted at the ratio of 1 debenture to 30 common shares (at a conversion price of Baht 33.33 per share). The Company recorded the issue and conversion of CD by presenting the difference between ordinary share par value and the conversion price totaling Baht 297.5 million under "Share premium". Should the transactions be recorded in accordance with the Thai Accounting Standards No. 34 - Accounting for Debt Restructuring, based on the substance of this debt restructuring, by recording common shares issued at the fair market value of the share, this would result in the decrease in share premium by Baht 297.5 million and an increase in share discount of Baht 25.3 million. There would be gain on debt restructuring in 1999 of Baht 322.8 million and the Companys deficits as at 1 January 2000 and 30 September 2000 would decrease by the same amount. However, the different accounting treatments adopted have no impact on the total shareholders equity. 10 Cash flows from operating activities For the nine-month period ended 30 September 2000 and 1999 Reconciliation of net profit (loss) to cash flows from operating activities: Consolidated Company 2000 1999 2000 1999 Baht'000 Baht'000 Baht'000 Baht'000 Net profit (loss) for the period 33,751 (255,059) 33,751 (255,059) Interest expense 30,889 226,871 6,548 114,761 Minority interest (342) (118) - - Profit (loss) before interest expense and income tax 64,298 (28,306) 40,299 (140,298) Adjustments to reconcile net profit (loss) to net cash generated from operating activities: Depreciation and amortization 10,491 33,922 6,632 20,995 Loss (Gain) on sale of property and equipment 628 (377) 10 (377) Withholding tax written off 6,279 - 2,052 - Gain from sale of investment in a subsidiary (65,895) - (65,895) - Gain from debt forgiveness by construction contractor (22,135) - - - Gain from cancelled contract - (51,301) - (5,557) Gain on extinguishment of debt - (29,406) - (29,406) Loss from forfeited land deposit - 32,940 - 32,940 Loss from disposition of real estate under - 177,370 - 161,920 debt restructuring Share of loss in subsidiaries - - 5,535 108,484 Gain on debt restructuring - (135,811) - (125,618) Changes in operating assets and liabilities - short term investments 15 (9) 15 (9) - trade accounts receivable 147 6,640 47 1,664 - unbilled completed work (5,180) 12,213 (9,628) 12,520 - loans and advances to related companies - - (17,209) (39,169) - inventories 2,850 - - - - real estate development cost 13,295 205,603 3,255 54,288 - net construction in progress - 4,759 - - - other current assets (9,992) (7,677) (4,535) (3,243) - other assets 893 354 1,305 1,666 - accounts payable-construction 5,288 (30,372) 16,785 (7,224) - deposits and advance received from customers (1,869) (34,126) 2,053 (8,013) - other current liabilities (3,863) 61,129 1,453 56,975 - other liabilities (277) (279) (666) (279) Cash flows from operating activities before interest payable and income tax (5,027) 217,266 (18,492) 92,259 Cash for interest payment (14,585) (104,212) (4,621) (73,921) Cash generated from (used in) operating activities (19,612) 113,054 (23,113) 18,338 11 Disposal of subsidiary In June 2000, the Company disposed of Ban Siam Co., Ltd., a subsidiary, to a third party. Details of assets and liabilities on the date of disposal including proceed on sale are as follows: Baht '000 Cash 1 Land held for development 215,552 Property and equipment - net 25,909 Other assets 1,102 Long term loan (202,170) Other liabilities (106,089) Net liabilities (65,695) Gain on sales 65,895 Proceed on sale of subsidiary 200 12 Extraordinary item-Gain from debts restructuring On 17 September 1999, the Company and its subsidiaries had restructured its debts with a financial institution as follows: Consolidated Company Bath'000 Bath'000 Outstanding balance before debt restructuring 336,631 302,948 Less : Settlement by transferring real estate development cost, issuing 1.1 million common shares at par value Baht 10.00 each and payment by cash (200,820) (177,330) Gain from debts restructuring 135,811 125,618 13 Prior year adjustments The company has adjusted the financial statements as at 31 December 1999, to reflect the adjustments on prior year errors as follows: Consolidated Company Baht'000 Baht'000 other income other income (expenses) (expenses) a) Write off of deferred tax liabilities 92,221 38,231 b) Impairment charge on fixed assets (82,898) (63,271) c) Adjustment on goodwill amortisation (61,777) - d) Provision for loss from breaching of land purchase and sale contract (26,000) (26,000) e) Impairment of assets anticipated to receive from debt settlement (51,316) (49,369) f) Adjustments for write off of assets (20,752) (18,121) g) Adjustment in share of results in subsidiaries resulting from the above prior year adjustments - (31,992) (150,522) (150,522) a) The Company and its subsidiaries reversed their deferred tax liabilities because the main temporary differences between tax and accounting profit did not exist since 31 December 1999 and the Company and its subsidiaries have a substantial amount of taxable losses for (more)