INTERM CONSOLIDATE AND EQUITY METHOD FINANCE STATMENTS 1/98

See notes to the interim consolidated and equity method financial statements The interim consolidated and equity method financial statements have been subjected to a review DUSIT THANI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENT OF CHANGES IN SHAREHOLDERS+ EQUITY FOR THE QUARTER ENDED MACRH 31, +UNAUDITED" CONSOLIDATED EQUITY METHOD 1998 1997 1998 1997 SHARE CAPITAL-ORDINARY SHARES Beginning balance 850,000,000 600,000,000 850,000,000 600,000,000 Addition - - - - Ending balance 850,000,000 600,000,000 850,000,000 600,000,000 PAID-IN CAPITAL Premium on share capital Beginning balance 1,643,000,000 1,143,000,000 1,643,000,000 1,143,000,000 Addition - - - - Ending balance 1,643,000,000 1,143,000,000 1,643,000,000 1,143,000,000 RETAINED EARNINGS Appropriated Legal reserve Beginning balance 56,000,000 48,000,000 56,000,000 48,000,000 Addition - - - - Ending balance 56,000,000 48,000,000 56,000,000 48,000,000 Other reserves Beginning balance 310,000,000 310,000,000 310,000,000 310,000,000 Ending balance 310,000,000 310,000,000 310,000,000 310,000,000 Unappropriated Beginning balance (1,131,686,426) 98,350,543 (1,131,686,426) 98,350,543 Less Prior year+s adjustment (173,207,520) - - - Addition 472,618,458 (6,018,861) 490,174,885 (6,018,861 Deduction - - - - Ending balance (832,275,488) 92,331,682 (641,511,541) 92,331,682 Exchange differences on the translation of the financial statements of subsidiary companies 30,321,989 297,992 30,321,989 297,992 TOTAL SHAREHOLDERS+ EQUITY BAHT 2,057,046,501 2,193,629,674 2,247,810,448 2,193,629,674 See notes to the interim consolidated and equity method financial statements The interim consolidated and equity method financial statements have been subjected to a review DUSIT THANI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENT OF RETAINED EARNINGS FOR THE QUARTER ENDED MARCH 31, +UNAUDITED" CONSOLIDATED EQUITY METHOD 1998 1997 1998 1997 UNAPPROPRIATED RETAINED EARNINGS (DEFICIT) Balance brought forward (1,131,686,426) 98,350,543 (1,131,686,426) 98,350,543 Less Appropriation for the prior year (173,207,520) - - - Legal reserve - - - - Dividends - - - - Add Net income (loss) for the year 472,618,458 (6,018,861) 4910,174,885 (6,018,861) Total unappropriated retained earnings (deficit) (832,275,488) 92,331,682 (641,511,541) 92,331,682 TOTAL RETAINED EARNINGS (DEFICIT) BAHT (832,275,487) 92,331,682 (641,511,541) 92,331,682 See notes to the interim consolidated and equity method financial statements The interim consolidated and equity method financial statements have been subjected to a review DUSIT THANI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENT OF CASH FLOWS FOR THE QUARTER ENDED MARCH 31, 1998 +UNAUDITED" CONSOLIDATED EQUITY METHOD CASH FLOWS FROM OPERATING ACTIVITIES Net Income 472,618,458 490,174,885 Adjustments to reconcile income to net cash provided (used) by operating activities: Depreciation and amortization 96,089,993 29,458,262 Profit on exchange (104,496,665) (74,076,653) Profit on sale of investment (375,770,889) (375,770,889) Minority interest in net loss of subsidiary companies 638,583 - Equity in undistributed net loss of subsidiary and associated companies 84,605,718 46,213,728 (Increase) Decrease in operating assets Net trade accounts and notes receivable 42,426,208 16,064,467 Inventories 4,576,767 (441,958) Other receivables 14,219,456 1,844,240 Other current assets 5,797,670 13,449,542 Other assets 11,120,640 - Increase (Decrease) in operating liabilities Trade accounts and notes payable (74,267,105) (12,849,911) Accrued expenses (4,513,705) (15,231,288) Accounts payable-construction (4,036,211) - Other current liabilities (30,278,094) (32,113,952) Net cash provided (used) by operating activities 138,730,824 86,720,473 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments in associated company 1,110,000,000 1,110,000,000 Net increase (decrease)in property, premises and equipment 51,550,074 (7,991,338) Net cash provided (used) by investing activities 1,161,550,074 1,102,008,662 CASH FLOWS FROM FINANCING ACTIVITIES Decrease in bank overdrafts and loans from financial institutions (6,685,246) (7,133,748) Cash received from loans to related companies - (40,546,058) Cash payment from loans (185,085,000) (185,085,000) Cash received from loans 51,143,760 - Net cash provided (used) by financing activities (140,626,486) (232,764,806) Exchange differences on the translation of the financial statements of subsidiary companies (87,081,285) - Net increase (decrease) in cash and cash equivalents 1,072,573,127 955,964,329 Cash and cash equivalents as at January 1 398,316,205 285,589,316 Cash and cash equivalents as at March 31 BAHT 1,470,889,332 1,241,553,645 See notes to the interim consolidated and equity method financial statements The interim consolidated and equity method financial statements have been subjected to a review DUSIT THANI PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO THE INTERIM CONSOLIDATED AND EQUITY METHOD FINANCIAL STATEMENTS FOR THE QUARTERS ENDED MARCH 31, 1998 AND 1997 1. ECONOMIC TURMOIL IN ASIA-PACIFIC REGION Many Asia-Pacific countries, including Thailand are experiencing severe economic difficulties relating to currency devaluations, volatile stock markets, and slowdown in growth. The country+s unstable economy has to a certain extent affected, and may continue to affect, the operations of the Company, recoverability of the Company+s assets and the ability of the Company to maintain or pay its debts as they mature. 2. BASIS FOR PREPARATION OF THE INTERIM CONSOLIDATED AND EQUIRY METHOD FINANCIAL STATEMENTS 2.1 The interim consolidated and equity method financial statements for the quarter ended March 31, 1998 and 1997 are unaudited. However, in the opinion of the Company, all adjustments necessary for a fair presentation, have been reflected therein. The interim consolidated and equity method financial statements have been prepared in accordance with the Notification of SET dated February 3, 1998 regarding the basis, conditions and procedures for preparation and submission of financial statements and reports for the financial position and result of operations of the listed companies (No.1) B.E. 2541 (1998). The interim consolidated and equity method financial statements for the quarter ended March 31, 1997 have been reclassified to conform to the classifications used in the interim consolidated and equity method financial statements for the quarter ended March 31, 1998. Certain financial information which is normally included in financial statements prepared in accordance with generally accepted accounting principles, but which is not required for interim reporting purposes, has been omitted. The interim consolidated and equity method financial statements should be read in conjunction with the consolidated and equity method financial statements and notes thereto included in the audited financial statements for the year ended December 31, 1997. …/2 - 2 - 2.2 The interim consolidated financial statements include the account balances of the subsidiary companies as follows: % of shareholding March 31, 1998 March 31, 1997 Dusit Resort Cha-am Company Limited 90.36 90.36 Royal Princess Public Company Limited 79.65 79.65 Korat Thani Corporation Limited by Royal Princess Public Company Limited 68.00 68.00 Supsinthanee Company Limited by Royal Princess Public Company Limited 60.00 60.00 Philippine Hoteliers, Inc. 85.76 76.21 Dusit Thani Delaware, Inc. 100.00 100.00 Dusit Hotel Nikko which is owned by Philippine Hoteliers, Inc. temporarily closed on May 1, 1996 and formally reopened in March 1997. 2.3 Balance sheet and statement of income of foreign subsidiaries are translated into Baht at the exchange rates prevailing at the balance sheet date and the average exchange rates, respectively. The exchange differences on the translation is shown as a deduction of the shareholders+ equity. 3. A CHANGE IN ACCOUNTING POLICY During the quarter ended March 31, 1998, pursuant to guidelines given by The Stock Exchange of Thailand, the Company changed its method in the consolidated statements of accounting for the equity in net losses of subsidiaries which are in excess of Company+s investments in such subsidiaries. Previously, the Company recorded equity in net losses in subsidiary companies to the extent and limited to the investment in such subsidiaries. The change in accounting has been presented on a retroactive basis and, accordingly, net loss for the year ended December 31, 1997 has been increased by Baht 173,207,520 from the amounts previously reported. Retained earnings (deficit) at January 1, 1998 has been increased for the effects of this change. In the financial statements presented on the equity method, the Company continues to account for equity in net losses of subsidiaries to the extent the Company+s investment is reduced to zero. Accordingly, the consolidated financial statements and the equity method financial statements do not present the same net income. (More)