UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) -----------------------------------------------------------------------------------------------------------------------------FINANCIAL STATEMENTS AS AT DECEMBER 31, 2004 AND 2003
REPORT OF THE AUDITOR To The Shareholders and Board of Directors of Unique Mining Services Public Company Limited (Formerly, Unique Mining Services Company Limited) I have audited the balance sheet of Unique Mining Services Public Company Limited as at December 31, 2004, the related statements of income changes in shareholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audit. The financial statements for the year ended December 31, 2003 of such company, presented herewith for comparative purpose only, were audited by another independent auditor in my firm, whose report date February 24, 2004, expressed an unqualified opinion. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Unique Mining Services Public Company Limited as at December 31, 2004, the results of its operations, the changes in its shareholders’ equity and its cash flows for the year then ended in accordance with generally accepted accounting principles.
(Mr. Pichai Dachanapirom) Certified Public Accountant Registration No. 2421 Dharmniti Auditing Company Limited Bangk ok, Thailand January 21, 2005
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) BALANCE SHEETS AS AT DECEMBER 31, 2004 AND 2003
ASSETS Baht Note
2004
2003
Current assets Cash and cash equivalents
3
118,789,325.70
33,472,036.06
Trade accounts receivable, net
4
141,788,606.75
66,895,602.94
Inventories, net
5
54,356,889.77
37,960,293.13
Prepaid purchases
17,824,360.08
Other current assets
-
1,808,067.34
9,089,802.94
334,567,249.64
147,417,735.07
7
36,060,424.01
14,885,835.97
8
5,696,096.03
7,816,019.59
4,724,212.00
4,724,212.00
10, 20
44,037,617.72
35,684,890.80
Total current assets Non-current assets Equipment, net Improvement and temporary building on leasehold land, net Other non-current assets Assets not used in operation Deposit pledged as collateral Guarantee deposit
6
Others
9
Total non-current assets TOTAL ASSETS
-
6,500,000.00
1,701,358.62
1,668,140.07
92,219,708.38
71,279,098.43
426,786,958.02
218,696,833.50
Notes to financial statements form an integral part of these statements. UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) BALANCE SHEETS (CONT.) AS AT DECEMBER 31, 2004 AND 2003
LIABILITIES AND SHAREHOLDERS' EQUITY Baht Note
2004
2003
Current liabilities Short-term loans from financial institutions
10
-
76,215,886.44
Current portion of long-term loans from director
11
-
2,400,000.00
Current portion of liability under debt restructuring agreement
12
8,354,878.01
Current portion of long-term loans
13
-
Current portion of liabilities under financial leases
14
1,178,351.12
Current portion of liabilties under hire-purchase contracts
15
335,329.18
4,443,864.81 1,832,197.02 434,539.21
Accrued expenses
10,563,655.90
9,741,655.07
Accrued income tax
32,768,130.25
9,953,290.86
Other current liabilities Total current liabilities
3,605,830.43
2,209,107.80
56,806,174.89
107,230,541.21
Non-current liabilities Long-term loans from director, net
11
Liabilities under debt restructuring agreement, net
12
Long-term loans, net
13
Liabilities under financial leases, net
14
3,379,299.46
Liabilities under hire-purchase contracts, net
15
256,490.23
Total non-current liabilities TOTAL LIABILITIES
-
15,200,000.00
20,367,903.65
28,724,501.08
-
9,742,125.27 591,819.40
24,003,693.34
54,258,445.75
80,809,868.23
161,488,986.96
Notes to financial statements form an integral part of these statements. UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) BALANCE SHEETS (CONT.) AS AT DECEMBER 31, 2004 AND 2003
LIABILITIES AND SHAREHOLDERS' EQUITY (CONT.) Baht Note
2004
2003
Shareholders' equity Share capital
16
Authorized share capital 70,000,000
ordinary shares, Baht 1.00 each
5,000,000
ordinary shares, Baht 10.00 each
70,000,000.00 50,000,000.00
Issued and fully paid-up share capital 70,000,000
ordinary shares, Baht 1.00 each
5,000,000
ordinary shares, Baht 10.00 each
70,000,000.00 50,000,000.00
Additional paid-up capital Premium on share capital
134,230,000.00
-
Retained earnings Unappropriated
141,747,089.79
7,207,846.54
TOTAL SHAREHOLDERS' EQUITY
345,977,089.79
57,207,846.54
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
426,786,958.02
218,696,833.50
Notes to financial statements form an integral part of these statements.
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
Baht Note
2004
2003
Revenues Sales Gain on disposal of fixed assets
962,707,665.82
655,127,558.23
191,949.16
2,154,397.74
7,677,278.53
4,485,220.05
970,576,893.51
661,767,176.02
Cost of sales
649,526,588.41
493,872,708.47
Selling and administrative expenses
122,485,551.43
98,991,913.05
772,012,139.84
592,864,621.52
198,564,753.67
68,902,554.50
4,685,713.32
4,746,885.45
Other income Total revenues Expenses
Total expenses Profit before interest and income tax expenses Interest expenses Income tax Net profit
Earnings per share Net profit
59,339,797.10
16,534,432.71
134,539,243.25
47,621,236.34
2.26
1.57
18
Notes to financial statements form an intergral part of these statemments.
UNIQUE MINING SERVICES PUBLIC COMPANY LIMTED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 ? ?? Note
Otdinary shares, issued and
Premium on share capital
paid-up Beginning balance, as at January 1, 2003 Increase in share capital-ordinary shares
16
Net profit for the year 2003 Ending balance, as at December 31, 2003 Increase in share capital-ordinary shares Net profit for the year 2004 Ending balance, as at December 31, 2004
Total
earnings (deficits)
24,500,000.00
-
25,500,000.00
-
-
25,500,000.00
-
-
47,621,236.34
47,621,236.34
-
7,207,846.54
50,000,000.00 16
Retained
20,000,000.00 70,000,000.00
134,230,000.00 134,230,000.00
Notes to financial statements form an intergral part of these statemments
(40,413,389.80)
-
(15,913,389.80)
57,207,846.54 154,230,000.00
134,539,243.25
134,539,243.25
141,747,089.79
345,977,089.79
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 Baht 2004
2003
Cash flows from operating activities Net profit
134,539,243.25
47,621,236.34
Reconciliations of net income to net cash provided by (used in) operating activities: Depreciation
8,953,806.20
7,103,423.81
Reversal accrued interest expense
(649,481.93)
(1,102,328.65)
(Gains) loss on disposal of fixed assets
(191,949.16)
(2,154,397.74)
Unrealized (gain) loss on exchange rate
-
881,895.11
Net profit provided by operating activities before changes in operating assets and liabilities
142,651,618.36
52,349,828.87
Trade accounts receivable
(74,893,003.81)
(34,703,208.93)
Inventories
(16,396,596.64)
(1,134,442.22)
Prepaid purchase
(17,824,360.08)
(Increase) decrease in operating assets
-
Other current assets
7,281,735.60
(3,134,393.68)
Guarantee deposit
6,500,000.00
(6,500,000.00)
Other non-current assets - others
(33,218.55)
(767,485.68)
Increase (decrease) in operating liabilities Trade accounts payable - other companies
-
(370,921.94)
Trade accounts payable - related companies
-
(48,535,475.89)
822,000.83
2,144,048.07
Accrued expenses Accrued income tax Other current liabilities Net cash provided by (used in) operating activities
22,814,839.39
9,953,290.86
1,396,722.63
(1,420,564.61)
72,319,737.73
(32,119,325.15)
Notes to financial statements form an integral part of these statements. UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) STATEMENTS OF CASH FLOWS (CONT.) FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 Baht 2004
2003
Cash flows from investing activities (Increase) decrease in current investments Cash paid for purchase of fixed assets Proceeds from disposal of fixed assets (Increase) in intangible assets (Increase) decrease in deposit pledged as collateral Net cash provided by (used in) investing activities Cash flows from financing activities Increase (decrease) in bank overdrafts and short-term
(22,982,333.66) 764,612.14 -
41,782.00 (5,297,498.86) 4,273,721.05 (28,200.00)
(8,352,726.92)
(35,352,890.80)
(30,570,448.44)
(36,363,086.61)
loan from financial institutions Increase (decrease) in long-term loans from director Payment of liability under debt restructuring agreement Payment of long-term loans Payment of liabilities under financial leases
(76,215,886.44)
75,333,991.33
(17,600,000.00)
(17,500,000.00)
(4,445,584.23)
(1,712,588.00)
(10,924,840.36)
(1,407,779.83)
(1,041,149.42)
Payment of liabilities under hire-purchase contracts
(434,539.20)
Cash received from increasing share capital
(400,259.21)
154,230,000.00
25,500,000.00
Net cash provided by (used in) financing activities
43,568,000.35
79,813,364.29
Net increase (decrease) in cash and cash equivalents
85,317,289.64
11,330,952.53
Cash and cash equivalents - beginning of year
33,472,036.06
22,141,083.53
118,789,325.70
33,472,036.06
Cash and cash equivalents - ending of year
Notes to financial statements form an integral part of these statements. UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) STATEMENTS OF CASH FLOWS (CONT.) FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 Baht 2004
2003
Supplemental disclosure of cash flows information:1.
Cash paid during the years for: Interest expenses Income tax
2.
For the year 2004, the Company acquired fixed assets by means of financial leses contract amount Baht 5,598,800.00.
3.
On February 14, 2003, the Company transferred bank overdrafts amount of Baht 5,156,934.41 to be a long-term loan.
4.
For the year 2003, the Company acquired fixed assets by means of hire-purchase contract amount Baht 688,317.76.
4,764,759.07
4,905,596.94
36,503,412.86
6,581,141.85
Notes to financial statements form an integral part of these statements.
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 1. GENERAL INFORMATION (a)
Legal status and address The Company was registered to be a limited company on March 17, 1994. At the 1st and 2nd extraordinary shareholders’ meetings held on January 14, 2004 and
January
, 2004, respectively, the shareholders unanimously approved to change the Company’s
status to
be public company limited. On February 17, 2004, the Company has registered the above
resolution
with the Ministry of Commerce The address of its registered office is as follows: 36/83 P.S. Tower Floor 24th Soi Sukhumvit 21 (Asoke), Sukhumvit Road, Klongtoey N u a ,
(b)
W a t t a n a ,
B a n g k o k
1 0 1 1 0 .
Nature of the Company's operations The principal business operations of the Company is sale of coal for industrial usages.
(c)
Employees As at December 31, 2004 and 2003, the Company has 128 employees and 101
employees, (d)
respectively.
Supplemental disclosure of revenue and expenses information Supplemental disclosure of revenue and expenses information for the years ended
December
31, 2004 and 2003 are as follows:Baht 2004 Depreciation charges
2003
8,953,806.20
7,103,423.81
Staff cost
38,088,370.81
17,353,272.45
Gain (loss) on exchange rate
(4,669,641.25)
685,146.02
2. SIGNIFICANT ACCOUNTING POLICIES .
Basis for preparation of the company’s financial statements The Company’s financial statements are prepared in accordance with generally accepted accounting principles and accounting standards prescribed by Accounting Act and presented accordingly to the Instruction of the Department of Business Development, the Ministry of Commerce for
2.2
P u b l i c
C o m pa n y
L i m i t e d . ,
B . E .
2 5 4 4 .
Revenue and expenses The Company recognizes the revenues on sales upon delivery of goods to the customers. The Company recognized expenses on the accrual basis.
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 2.3
Allowance for doubtful accounts The Company and subsidiary provide allowance for doubtful account equal to the estimated collection losses that may be incurred in the collection of all receivables. The estimated losses are based on historical collection experience and a review of the current s t a t u s
2.4
o f
t h e
e x i s t i n g
r e c e i v a b l e s .
Foreign currency transactions Transactions in foreign currencies throughout the years are recorded in Baht at prevailing Bank of Thailand rates at the transaction dates. Outstanding monetary assets and liabilities denominated in foreign currencies at the balance sheet dates are translated into Baht at the prevailing rates at those dates. Gain or loss arising from translation are credited or charged against current operations. The transactions which have been hedged by forward contract agreements are recorded
at
the forward contract rate. Premium or discount on forward contract agreements are amortized to expenses or income over the period of each contract. 2.5
Related parties Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the company. Associates and individuals owning, directly or indirectly, an interest in the voting power of the company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the company and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the
substance 2.6
of the relationship, and not merely the legal form.
Inventories Inventories are presented on the balance sheet at the lower of cost or net realizable value, cost being determined on the average basis.
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 2.7
Depreciation and amortization Depreciation and amortization is calculated on the straight-line method over the estimated useful life of the assets as follows:
2.8
Leasehold land improvement
3
years and 10 years (per land lease agreements)
Temporary building
3
years (per land lease agreements)
Equipment
5
years
Vehicles
5
years
Assets not used in operation Assets not used in operation are presented on the balance sheet at the lower of cost or net realizable value.
2.9
Deferred interest The Company amortizes deferred interest on hire-purchase contracts by the straight-line method over the contract period and on financial lease agreements by the effective interest rate basis.
2.10 Using of Accounting Estimation Preparation of financial statements in conformity with generally accepted accounting principles in Thailand requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets and liabilities. Actual results may differ from those estimates. 2.11 Operating Lease Lease of assets under which all the risks and rewards of ownership are effectively retained
by the lessor are classified as operating lease. Lease payments under an
operating lease are recognized
as expense on a straight-line basis over the lease term.
2.12 Cash and cash equivalents Cash and cash equivalents consist of cash and deposits at financial institution with an original maturity of 3 months or less and excluded cash at banks which are used for guarantee.
2.13 Income tax The Company records income tax expense, if any, based on the amount currently payable under the Revenue Code. UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2004 AND 2003 3. CASH AND CASH EQUIVALENTS Cash and cash equivalents consisted of:Baht 2004
2003
Cash on hand
122,917.43
Deposits at financial institutions - current accounts
3,
139,469.56
,
- savings accounts 115,308,027.57
30,723,276.94
118,789,325.70
4. TRADE ACCOUNTS RECEIVABLE, NET Trade accounts receivable, net consisted of:Baht 2004 Note receivable
2003
871,466.85
Trade accounts receivable
141,718,527.06
67,696,990.10
(801,387.16)
(801,387.16)
Less allowance for doubtful accounts Net
-
141,788,606.75
Trade accounts receivable classified by ages of accounts as follow:Baht 2004
Under 3 months
2003
Accounts
Baht
Accounts
50
136,180,614
46
Baht
.10 Over 3 months to 6 months Over 6 months to 12
4,715, 92.7
-
-
13,583.84
-
-
809,036.42
1
801,387.16
0
months Over 12 months
Total
141,718,527 .06
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2004 AND 2003 5. INVENTORIES, NET Inventories, net consisted of:Baht 2004 Coal
2003
54,827,615.07
Less allowance for physical losing stock
470,725.30
Net
-
54,356,889.77
6. RELATED PARTY TRANSACTIONS The Company has significant transactions with its related company, those transactions are in the normal course of business as follows: Type of
Pricing
related
policy
Baht 2004
2003
Transactions during the year Purchase of goods Indo-Chemthai
Co-Director
Co.,Ltd.
Market price add USD 0.15 per metric
-
ton
,576,199.5 9
Transportation expense Indo-Chemthai Co., Ltd.
Co-Director
Market
-
price
34,052,866.5 2
Interest expense Directors
(see Note 11)
519,624.31
1,058,160.55
Since March, 2003 the Company has no transaction in purchase and sale of goods with its related company. Baht 2004
2003
Balance as at December 31, Guarantee deposit Indo-Chemthai Co., Ltd.
-
6,500,000.00
On December 31, 2003, the Company had used the credit line in letter of credit of IndoChemthai Co., Ltd. with a local bank amount of Baht
million However, on January 22, 2004 this
credit line has been cancelled from the related company and the Company has already received the deposit pledged as collateral in the amount of Baht 6.5 million.
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2004 AND 2003 7. EQUIPMENT, NET Equipment, net consisted of:Baht Balance per
Movement during the year
Balance per
book
book
as at Dec. 31,
Additions
Deduction
as at Dec. 31,
2003
2004
At cost Equipment Vehicles
3,024,894.4
(1,355,833.2
19,441,701.6
2
8)
5
)
42,599,800.0
25,556,239.
(
24 Total
1
37,366,201.2
28,581,133.
(3,905,833.2
62,041,501.6
8
66
8)
6
Accumulated depreciation Equipment Vehicles Total Net
(
)
(2,409,529.6
1,294,771.3
(11,209,709.5
3)
0
4)
(4,424,353.0
2,038,399.0
(14,771,368.1
1)
0
1)
(22,4 0,365.3
(6,833,882.6
3,333,170.3
(25,981,077.6
1)
4)
0
5)
(
)
14,885,835.9
36,060,424.0
7
1
8. IMPROVEMENT AND TEMPORARY BUILDING ON LEASEHOLD LAND, NET Improvement and temporary building on leasehold land, net consisted of:Baht Balance per
Movement during the year
book as at Dec. 31, 2003 At cost
Balance per book
Additions
Deduction
as at Dec. 31, 2004
Leasehold
land
5,260,722.01
-
-
5,260,722.01
14,497,840.8
-
-
14,497,840.8
improvement Temporary building
3
3
Total
-
-
19,758,562.8 4
Accumulated depreciation Leasehold
land
(3,303,297.05)
(338,608.13)
-
(3,641,905.18)
(8,639,246.20)
(1,781,315.4
-
(10,420,561.6
improvement Temporary building
3) Total
3)
(2,119,923.5
-
(14,062,466.8
6)
1)
Net
5,696,096.03
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2004 AND 2003 9. OTHER NON-CURRENT ASSETS - OTHERS Other non-current assets - others consisted of:Baht 2004 Deposit Royalty, net
2003
1,695,278.54
1,627,375.89
6,080.08
40,764.18
1,701,358.62
1,668,140.07
10. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS Short-term loans from financial institutions consisted of:Baht 2004 Trust receipts Total
2003 -
76,215,886.44
As at December 31, 2004 and 2003, the Company has short -term loans with two and two local banks in limit totalling Baht
million and Baht 140 million, respectively. The short -term loans are
guaranteed by savings account and fixed account of the Company and by directors. 11. LONG-TERM LOANS FROM DIRECTOR The movements of long-term loans from director during the year as follows :Baht 2004 Beginning balance
2003
17,600,000.00
Additional from borrowing during the year Deduction from payment during the year
-
35,100,000.00 20,400,000.00
(17,600,000.00)
(37,900,000.00)
Ending balance
-
17,600,000.00
Less portion due within one year
-
(2,400,000.00)
Net
-
15,200,000.00
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2004 AND 2003 Loan from director represents the loan with agreement, balance as at December 31, 2003 amount of Baht 17.6 million was charged interest at the rates MLR-2, and scheduled to repay the principal loan per month of Baht 200,000.00. For the years ended December 31, 2004 and 2003, loan from director bear interest at the average rate of 3.87 % and 5.20% per annum, respectively. In August 2004, the Company has changed the repayment of the loan from director to repay the principal loan per month of Baht 3.00 million. On December 23,
, the loan from director have been completely repaid by the company.
12. LIABILITY UNDER DEBT RESTRUCTURING AGREEMENT Liability under debt restructuring agreement consisted of:Baht 2004
2003
Liability under debt restructuring agreement
28,722,781.66
33,168,365.89
Less portion due within one year
(8,354,878.01)
(4,443,864.81)
20,367,903.65
28,724,501.08
On December 19, 2002, the Company entered into a debt restructuring agreement with a local bank for loan and related accrued interest totalling Baht 36.33 million by changing in repayment schedule and interest rate. The Company received discount on accrued interest of Baht 0.96 million. The Company committed to repay the loan as specified in the agreement and bears interest at MLR minus 1% per annum. The Company shall repay the principal and interest as follow:Year
Monthly repayment
2003
300,000
2004
500,000
2005
800,000
2006
800,000
2007
800,000
2008
the remaining balance
Liability under debt restructuring agreement is guaranteed by directors. The Company records interest expense into the account at the effective rate of 5.0569% per annum. UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2004 AND 2003 13. LONG-TERM LOANS Long-term loans consisted of:Baht 2004
2003
Long-term loans from banks
-
11,574,322.29
Less portion due within one year
-
(1,832,197.02)
Net
-
9,742,125.27
The long-term loans consisted of ? f
A principal loan as at December 31, 2003, amount of Baht 6.9 million, is repayable as o
l Year
l Period
o
w
s
Monthly repayment
: Interest rate/year
-
?
1
Dec., 2002-Dec., 2003
90,000.00
MLR
2-3
Jan., 2004-Dec., 2005
120,000.00
MLR
4-5
Jan., 2006-Dec., 2008
180,000.00
MLR
A principal loan as at December 31, 2003, amount of Baht 4.6 million, is repayable as
follows:Year
Period
Monthly repayment
Interest rate/year
1
Dec., 2002-Dec., 2003
60,000.00
MLR
2-3
Jan., 2004-Dec., 2005
80,000.00
MLR
4-5
Jan., 2006-Dec., 2008
120,000.00
MLR
Long-term loan is guaranteed by directors. On November 5, 2004, the Company have completely repaid the loan to the bank so that the company have obtained the reducing of its interest in the amount of Baht 0.65 million. This transaction have been shown under other income account in the income statement for the year ended December 31, 2004. For the years ended ended December 31, 2004 and 2003, long-term loans from bank bear interest at the average rate of 5.74% and 4.40% per annum, respectively.
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2004 AND 2003 14. LIABILITIES UNDER FINANCIAL LEASES CONTRACTS Liabilities under financial lease contracts as at December 31, 2004 consisted of: Baht Financial lease Less deferred interest
5,213,221.02 (655,570.44) 4,557,650.58
Less current portion due within one year Financial lease, net
(1,178,351.12) 3,379,299.46
On January 29, 2004 and February 2, 2004, the Company has entered into two financial leases contracts with a local company to purchase vehicles on the value amount of Baht 2,799,400.00 per each contract (excluded VAT ) be comprised of the terms of 48 monthly
installments and repaid per month of Baht 61,996.00 per each contract, the first installment starting from February 2, 2004, and the final installment at February 24, 2007. Under the terms of leases referred to above, the Company shall have the right to purchase assets at the price of Baht 1,041,000.00 per each contract at the expiration date of the leases and the Company shall have to comply with certain conditions and restrictions as specified in this leases. 15. LIABILITIES UNDER HIRE-PURCHASE CONTRACTS Liabilities under hire-purchase contracts consisted of:Baht 2004
2003
Hire-purchase contract - vehicles
665,695.00
1,161,496.62
Less deferred interest
(73,875.59)
(135,138.01)
591,819.41
1,026,358.61
(335,329.18)
(434,539.21)
256,490.23
591,819.40
Less portion due within one year
The ownership on the assets purchased under hire-purchas e contracts will be transferred to the Company when the last installment has been paid.
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2004 AND 2003 16. SHARE CAPITAL For the year ended December 31, 2003 At the extraordinary meetings 1/2003 and 2/2003 on July 17, 2003 and August 14, 2003 respectively, the shareholders unanimously approved to increase the Company’s authorized capital from Baht 24,500,000.00 to Baht 50,000,000.00. The increase in the amount of Baht 25,500,000.00 was issued by 2,550,000 ordinary shares of Baht 10.00 each. This capital increase has been registered with the Ministry of Commerce on August 29, 2003. For the year ended December 31, 2004 At the 2nd extraordinary shareholders’ meeting held on January 30, 2004, the shareholders unanimously approved to change ordinary share’s par value from Baht 10 per share to be Baht 1 per share. According to the resolution, authorized share capital increase from 5 million ordinary shares to be 50 million ordinary shares and to increase the Company’s registered share capital from Baht 50 million to Baht 70 million. The capital increase in the amount of Baht 20 million was issued by 20
million ordinary shares of Baht 1 each that it has to be distributed for initial public offerring. On February 17, 2004, the Company registered the above resolution with the Ministry of Commerce. On July 2, 2004, the Company has appointed the distribution manager and distribution guarantor, to distribute and guarantee for selling of the increasing of the Company’s capital of 20 million shares, the schedule to offer and sell the shares was set on July 6-8, 2004 at Baht 7.95 per share. As a result, the Company had share premium of Baht 6.95 per share, totaling Baht 134.23 million (net of the relating expenses of Baht 4.77 million) from such offering. 17. INCOME TAX The Company records income tax expense, base on the amount currently payable. Income tax is calculated under the Revenue Code’s regulation at the rate 30% of net profit before income tax. 18. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the net profit (loss) for the years by the weighted average number of ordinary shares in issued and paid-up during the years. Net profit of ordinary shares (Baht) Weighted average number of ordinary shares (Shares) Basic earnings per share (Baht per share)
2004
2003
134,539,243.25
47,621,236.34
59,618,854
30,319,589
2.26
1.57
For comparison purposes, the Company has recalculated earnings per share for the year ended December 31, 2003 by considering the weighted average number of ordinary shares which had changed in par value and in the number of shares in accordance with the amendment to par values and number of shares as mentioned in note 16.
UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2004 AND 2003 19. F
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A financial instrument is any contract that gives rise to both a financial asset of one entity and a
financial
liability
or
equity
instrument
of
another
entity.
Risks relating to significant financial instruments held by the company and its risk management p o l i c y C
a r e
r
s u m m a r i z e d
e
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r
f o l l o w s . i
s
k
The Company is exposed to credit risk primarily with respect to trade and notes accounts r
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v
a
b
l
e
.
The Company’s prudent credit policy and its diversified customer. The maximum credit risk exposure is equal to the book value of accounts receivable in the balance sheet. I
n
t
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r
e
s
t
r
a
t
e
r
i
s
k
The interest rate risk is the risk that future movements in market interest rates will affect the results of the company’s operations and its cash flows The Company’s exposure to interest rate risk relates primarily to short-term loans from financial institution, long-term loans and liability under debt restructuring agreement with a floating interest rate, the details are set out in Notes 10, 11, 12 and 13. Liquidity risk Liquidity risk, or funding risk, is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell financial assets quickly at close to their fair value. The Company’s financial assets comprises of cash, deposits at financial institutions, accounts receivable and inventories which are liquid and able to sell at close to their fair value when the Company wishes to raise find. Foreign currency risk The Company’s exposure to foreign currency risk relates to its trust receipts in US dollars. For the period, the Company primarily utilizes forward exchange contracts with maturity of less than one
year to hedge exchange rate risk relating to the repayment of the trust receipts. Forward exchange contracts outstanding on December 31, 2004 are summarized below. Foreign
Amount
Currency Purchase
USD
Exchange rates
Maturity
Baht/USD 8,840.65
41.4100
January 31,
27,486.62
40.9265
2005 February 9,
contract
2005 UNIQUE MINING SERVICES PUBLIC COMPANY LIMITED (Formerly, UNIQUE MINING SERVICES COMPANY LIMITED) NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2004 AND 2003 Fair value of financial instruments Fair value is defined as the amount at which the instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction. Fair values are obtained from quoted market prices or discounted cash flow models. The carrying values of financial assets and liabilities is approximate their fair values except for liabilities under financial leases and hire-purchase cannot be calculated their fair values, accordingly, n
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20. COMMITMENTS As at December 31, 2004, (a)
The Company has a commitment under 10 years land lease agreement from 2002 to
2011. There is a rental commitment outstanding approximately of Baht 1.15 million. The fifth to seventh rental charges will be paid in 2006 2008 and 2010 at Baht 384,000 each. And another warehouse lease agreement has a period of 3 years ending on December 2004. The rental charges amounted to Baht 600,000 b)
31, throughout the lease period.
The Company has entered into three machinery operating lease agreements. The term of these agreements covers for a period commencing in 2003 and terminating in 2006. The Company shall pay the minimum certain monthly lease fee in respect of each agreement of Baht 105,000.00, Baht 107,000.00 and Baht 105,000.00, respectively.
(c)
On July 16, 2004, the company has contract for purchase of Hamada Coal-Fired Boiler with a foreign company. Shipment will be made within 60 days from the date of issue of acceptable letter of credit. As at December 31, 2004, the commitment balance to the contracts was remained in the amount of USD 272
(d)
.
The Company has significant contracts for sale and purchase of steam coal with foreign coal mining company to purchase steam coal during 2004 to 2006 for 528,000 - 576,000 metric tons. The firmed committed quantity in 2004 is 240,000 metric tons plus/minus 10%. The firmed price of coal shall be adjusted by the quality of coal as the formular as specified in the agreement.