SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 22, 1997
Date of Report (Date of earliest event reported) ______________________________
KING POWER INTERNATIONAL GROUP CO., INC.
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(Exact name of registrant as specified in its charter)
Nevada
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(State or other jurisdiction of incorporation)
33-10281 75-2641513
- ------------------------- ---------------------------------------
(Commission File Number) (IRS Employer Identification No.)
Bangkok International Airport Office Building, Vibhavadi Road,
Bangkok 10210 Thailand
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(Address of principal executive offices) (Zip Code)
(662) 996-8004
Registrant's telephone number, including area code ____________________________
Copies of correspondance to:
Kevin B. Halter, Jr.
16910 Dallas Parkway #100
Dallas, TX 75248
(972) 248-1922
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 1. Changes in Control of Registrant.
On June 12, 1997, pursuant to an agreement (the "Agreement") between Immune
America, Inc. (now King Power International Group Co., Ltd.), a Nevada
corporation (the "Registrant"), all or substantially all of the shareholders
(the "Shareholders") of two Thailand corporations, J.M.T. Group Co., Ltd. and
J.M.T. Duty Free Co., Ltd. (collectively, the "Thai Companies"), and Halter
Capital Corporation, a Texas corporation, the Shareholders acquired beneficial
ownership of 18,800,000 shares of the Registrant's common stock, par value $.001
(the "Acquired Shares"). Halter Capital Corporation served as a consultant to
the Registrant in the transaction. The Shareholders and their individual
holdings of the Registrant's common stock following the transaction are
identified in Exhibit 99 accompanying this Current Report. In consideration of
the Acquired Shares, the Shareholders delivered to the Registrant all of the
capital stock the Shareholders held in the Thai Companies, that is, 100% of the
capital stock of J.M.T. Group Co., Ltd. and 95% of the capital stock of J.M.T.
Duty Free Co., Ltd., thereby making the Thai Companies subsidiaries of the
Registrant.
The basis of control of the Registrant by the Shareholders results from their
beneficial ownership of approximately 94% of the issued and outstanding shares
of the Registrant's common stock. There are no arrangements known to the
Registrant, the operation of which may at a subsequent date result in another
change of control of the Registrant. Under the terms of the Agreement, seven
persons nominated by the Shareholders -- Vichai Raksriaksorn, Viratana
Suntaranond, Antares Cheng, Suwan Panyapas, Benjamin B. Fattedad, Aimon
Boonkhundha and Damamoon Prachimod -- were elected to the Registrant's Board of
Directors, and immediately thereafter the four previously serving Directors --
Glenn A. Little, Matthew Blair, Dr. Elizabeth Huntley and Kevin B. Halter, Jr.
- -- resigned. Moreover, the name of the Registrant was changed from Immune
America, Inc. to King Power International Group Co., Ltd.
Prior to the transactions described above, approximately 49.9% of the issued and
outstanding shares of the Registrant's common stock were owned by Little &
Company, 211 West Wall, Midland, Texas 79701. The remaining shares, prior to the
transactions, were held by approximately 490 shareholders. Following the above
transactions, the shares of the Registrant's common stock beneficially owned by
Little & Company constitute less than 1% of the Registrant's issued and
outstanding common stock.
ITEM 2. Acquisition or Disposition of Assets.
As described in Item 1, above, on June 12, 1997 the Registrant acquired 100% of
the capital stock of J.M.T. Group Co., Ltd. and 95% of the capital stock of
J.M.T. Duty Free Co., Ltd., both Thailand corporations, thereby making the Thai
Companies subsidiaries of the Registrant. In consideration of the acquired
capital stock of the Thai Companies, the Registrant issued and delivered to the
Shareholders of the Thai Companies 18,800,000 shares of the Registrant's common
stock. This consideration for the acquired capital stock of the Thai Companies
was determined as a result of arm's length negotiations between Immune America,
Inc. and certain of the Shareholders as representatives of all of the
Shareholders.
The Thai Companies own and operate duty free concessions and retail tourist
shops in Bangkok, Phuket, Hat Yai and Chian Mai, all Thailand. The Registrant
will continue the business conducted by the Thai Companies.
<PAGE>
ITEM 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
J.M.T. GROUP COMPANY LIMITED - REPORT AND INTERIM FINANCIAL
STATEMENTS (UNAUDITED) MARCH 31, 1996 AND 1997
J.M.T. GROUP COMPANY LIMITED - REPORT AND FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1995 and 1996
J.M.T. DUTY FREE COMPANY LIMITED - REPORT AND INTERIM FINANCIAL
STATEMENTS (UNAUDITED) MARCH 31, 1997
J.M.T. DUTY FREE COMPANY LIMITED - REPORT AND FINANCIAL
STATEMENTS DECEMBER 31, 1996
(b) Pro forma financial information.
(c) Exhibits.
2 Stock Purchase Agreement dated April 10, 1997, between the Registrant,
all or substantially all of the Shareholders of three Thailand
corporations, Downtown D.F.S. (Thailand) Co., Ltd., J.M.T. Group Co.,
Ltd. and J.M.T. Duty Free Co., Ltd. (collectively, the "Thai
Companies"), and Halter Capital Corporation, a Texas corporation,
related to the acquisition of 100% of the capital stock of J.M.T.
Group Co., Ltd. and 95% of the capital stock of J.M.T. Duty Free Co.,
Ltd., thereby making the Thai Companies subsidiaries of the
Registrant. (*)
2.1 Amendment No. 1 to the Stock Purchase Agreement dated June 7, 1997,
whereby acquisition by the Registrant of the capital stock of Downtown
D.F.S. (Thailand) Co., Ltd. was amended out of the Stock Purchase
Agreement. (*)
3 Certificate of Amendment of Articles of Incorporation of Registrant
dated June 11, 1997, changing the name of Registrant from Immune
America, Inc. to King Power International Group Co., Ltd. (*)
99 List of the Shareholders disposing of their capital stock in the Thai
Companies in consideration of the Acquired Shares in Registrant, and
the number of Acquired Shares beneficially owned by each such
Shareholder following the transactions pursuant to the Stock Purchase
Agreement, as amended (Exhibits 2 and 2.1) (*)
(*) Previosly filed with the Securities and Exchange Commission as an exhibit
to the Company's curent report on Form 8-K, date of report June 12, 1997,
filed June 18, 1997.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
REPORT AND INTERIM FINANCIAL STATEMENTS
MARCH 31, 1996 AND 1997
<PAGE>
BDO Binder (Thailand) Ltd.
Certified Public Accountants and Consultants
22nd Floor, CTI Tower
191741 New Ratchadapisak Road
Klongloey, Bangkok 10110 Thailand
Telephone: (662) 261-1251
Telefax: (662) 261-1255
To The Board of Directors and Shareholders of
J.M.T. Group Company Limited
We have reviewed the accompanying balance sheets of J.M.T. Group Company
Limited (the "Company") as of March 31, 1996 and 1997, and the related
statements of income, changes in shareholders' equity, and cash flows for the
three months then ended, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants. These financial statements are the responsibility of the
Company's management.
A review consists principally of inquiries of the Company's personnel and
analytical procedures applied to financial data. It 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. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to be
in conformity with generally accepted accounting principles in the United
States.
/S/ BDO Binder (Thailand) Ltd.
BDO Binder (Thailand) Ltd.
BANGKOK : July 15, 1997.
<PAGE>
(UNAUDITED)
J.M.T. GROUP COMPANY LIMITED
BALANCE SHEETS
<TABLE>
<CAPTION>
At March 31, Conversion
------------------------ -------------
<S> <C> <C> <C> <C>
Note 1996 1997 1997
-------- ---------- ------------ -------------
BAHT BAHT US$
ASSETS
Current Assets
Cash and cash equivalents 1 9,907,851 49,158,081 1,892,880
Trade accounts receivable - 3,819,156 147,060
Refundable valued added tax 2 2,628,846 41,318,859 1,591,023
Advance to related party 3 366,400 - -
Advance to other companies - 2,176,048 83,791
Loan to director 4 - 19,350,493 745,109
Inventories 13,427,453 205,860,646 7,926,863
Other current assets 1,223,564 2,270,134 87,414
---------- ------------ -------------
Total Current assets 27,554,114 323,953,417 12,474,140
Investment in non-marketable securities
Investments in other companies 5 6,477,851 6,401,794 246,507
Investment in marketable securities
Investment in closed-end
mutual fund (trading securities) 6 1,680,000 1,000,000 38,506
Property, plant and equipment-net 7 11,051,327 14,772,698 568,837
Restricted fixed deposit 8 72,700,000 84,861,360 3,267,669
Other long-term assets 17,000 2,294,792 88,363
---------- ------------ -------------
Total Assets 119,480,292 433,284,061 16,684,022
========== ============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Loan from bank 9 - 90,000,000 3,465,537
Trade accounts payable - related party 3 30,126,553 35,634,336 1,372,135
Trade accounts payable 152,960,212 329,614,515 12,692,126
Advance from director 10 105,963,778 - -
Advance from related party 3 - 19,403,644 747,156
Accrued payable 223,229 320,832 12,354
Other current liabilities 2,487,267 2,031,541 78,226
---------- ------------ -------------
Total Liabilities 291,761,039 477,004,868 18,367,534
========== ============ =============
Shareholders' Equity
Share capital
Authorized, issued and paid up
3,000,000 common stock, Baht 100 par value 300,000,000 300,000,000 11,551,791
Deficit (472,280,747) (343,720,807) (13,235,303)
---------- ------------ -------------
Deficit over share capital (172,280,747) (43,720,807) (1,683,512)
---------- ------------ -------------
Total Liabilities and Shareholders' Equity 119,480,292 433,284,061 16,684,022
========== ============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
(UNAUDITED)
J.M.T. GROUP COMPANY LIMITED
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three months ended March 31, Conversion
---------------------------- ------------
<S> <C> <C> <C> <C>
1996 1997 1997
-------------- ----------- ------------
BAHT BAHT US$
Sales 234,548,369 323,800,324 12,468,245
-------------- ----------- ------------
Cost of sales :
Cost of products 90,283,914 134,959,259 5,196,737
Concession fee 160,025,318 136,074,126 5,239,666
-------------- ----------- ------------
Total cost of sales 250,309,232 271,033,385 10,436,403
-------------- ----------- ------------
Gross profit (loss) (15,760,863) 52,766,939 2,031,842
-------------- ----------- ------------
Operating expenses :
Selling expenses
Salaries and welfare 21,562,914 22,778,650 877,114
Rental and service fee and other
expense under the concession agreement 4,103,362 5,109,678 196,753
Depreciation 904,876 1,339,892 51,594
Others 629,251 4,799,290 184,801
-------------- ----------- ------------
27,200,403 34,027,510 1,310,262
Administrative expenses 2,339,167 4,222,779 162,602
-------------- ----------- ------------
Total operating expenses 29,539,570 38,250,289 1,472,864
-------------- ----------- ------------
Income (loss) from operation (45,300,433) 14,516,650 558,978
-------------- ----------- ------------
Other revenues :
Interest income - 8,562,941 329,724
Gain on foreign exchange 4,124,272 3,465,723 133,451
Other income - 562,963 21,678
-------------- ----------- ------------
Total other revenues 4,124,272 12,591,627 484,853
-------------- ----------- ------------
Other expenses :
Interest expenses 3,879 1,074,133 41,361
-------------- ----------- ------------
Total other expenses 3,879 1,074,133 41,361
-------------- ----------- ------------
Net income (loss) (41,180,040) 26,034,144 1,002,470
============== =========== ============
Earnings (loss) per share (13.73) 8.68 0.33
============== =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
(UNAUDITED)
J.M.T. GROUP COMPANY LIMITED
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three months ended March 31, Conversion
------------------------------ -------------
<S> <C> <C> <C>
1996 1997 1997
-------------- -------------- -------------
BAHT BAHT US$
Cash flows from operating activities :
Net income (loss) (41,180,040) 26,034,144 1,002,470
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activites:
Depreciation 904,876 1,339,892 51,594
Decrease (increase) in operating assets:
Trade accounts receivable - (1,940,326) (74,714)
Refundable valued added tax (2,628,846) (19,992,616) (769,835)
Advance to related party (366,400) 2,596,356 99,975
Advance to other companies - (2,176,048) (83,791)
Loan to director - (9,115,000) (350,982)
Inventories 2,612,059 132,902,812 (5,117,551)
Other current assets (1,223,564) (2,132,936) (82,131)
Increase (decrease) in operating liabilities:
Trade accounts payable - related party 52,584 2,724,058 104,892
Trade accounts payable 79,941,062 198,986,002 7,662,149
Advance from director 44,700,000 - -
Advance from related party - 19,403,644 747,156
Accrued payable 223,229 (803,221) (30,929)
Other current liabilities (3,756,826) 154,102 5,934
-------------- -------------- -------------
Net cash provided (used)
by operating activities 79,278,134 82,175,239 3,164,237
-------------- -------------- -------------
Cash flows from investing activities :
Purchase of fixed assets (492,327) (500,901) (21,592)
Increase in restricted fixed deposit (72,700,000) (980,110) (37,740)
Decrease (increase) in other long term assets 1,486,000 (1,098,518) (42,299)
-------------- -------------- -------------
Net cash provided (used)
by investing activities (71,706,327) (2,579,529) (99,327)
-------------- -------------- -------------
Cash flows from financing activities :
Increase (decrease) in bank overdrafts (9,132,301) (560,756) (19,288)
Repayment of loan from bank - (10,000,000 (385,060)
Repayment of finance institution - (44,828,922) (1,726,181)
-------------- -------------- -------------
Net cash provided by
financing activities (9,132,301) (55,389,678) (2,132,833)
-------------- -------------- -------------
Net increase (decrease) in
cash and cash equivalents (1,560,494) 24,206,032 932,077
Cash and cash equivalents - beginning of period 11,468,345 24,952,049 960,803
-------------- -------------- -------------
Cash and cash equivalents - end of period 9,907,851 49,158,081 1,892,880
============== ============== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
(UNAUDITED)
J.M.T. GROUP COMPANY LIMITED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Total
Common stock Common stock Shareholders'
Shares Amount Deficit Equity Conversion
-------------- -------------- ------------- ------------- --------------
BAHT BAHT BAHT US$
Balance, January 1, 1996 3,000,000 300,000,000 (431,100,707) (131,100,707) -
Net loss - - (41,180,040) (41,180,040) -
-------------- -------------- ------------- ------------- --------------
Balance, March 31, 1996 3,000,000 300,000,000 (472,280,747) (172,280,747) -
============== ============== ============= ============= ==============
Balance, January 1, 1997 3,000,000 300,000,000 (369,754,951) (69,754,951) (2,685,982)
Net income - - 26,034,144 26,034,144 1,002,470
-------------- -------------- ------------- ------------- --------------
Balance, March 31, 1997 3,000,000 300,000,000 (343,720,807) (43,720,807) (1,683,512)
============== ============== ============= ============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS
GENERAL INFORMATION
J.M.T. Group Company Limited (the "Company") engaged in Thailand having its
registed business address at 189/58 Trok Wat Dow Deung, Somdej Pra Pin Klao
Road, Bangkok, Thailand. The main businesses of the Company are the selling of
products and souvenirs in the international and domestic airports of Thailand.
The Company has been granted such exclusive operating rights under various
agreements with the Airports Authority of Thailand.
Thai Baht is the Company's home country currency, however, for the
convenience to the users of financial statements, the 1997 Thai Baht figures
were converted into US dollars at the exchange rate of $ 1 = Thai Baht 25.97
which was in effect on March 31, 1997 (Information source: Bank of Thailand's
official announcement).
The Company has invested in other companies (see Note 5 for details), and
also invested in Closed-End Mutual Fund (see Note 6 for details).
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of the financial statements in conformity with US generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Interim financial information
The interim financial statements for the three-months ended March 31, 1996
and March 31, 1997, respectively, are unaudited. In the opinion of management,
such statements reflect all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the results of operations for
the interim periods. The results of operations for the three-months ended March
31, 1996 and March 31, 1997 are not necessarily indicative of the results for
the entire year.
Foreign Currency Transactions
Foreign currency transactions are recorded at the average rate of the
exchange ruling at the transaction date. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated at
the average rate of exchange ruling at that date. Exchange differences are dealt
with in the statement of income.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS - (Continued)
Inventory valuation
Inventory are stated at the lower of cost or market. Costs are calculated
on weighted average basis.
Depreciation
Property, plant and equipment are stated at cost and depreciated using the
straight-line method over the estimated useful lives of the assets 5 years.
Investments in non-marketable securities
Investment in other companies under 20% of interest was accounted for using
the cost method. Provision for diminution in value of the investment was set
aside in the statement of income.
Investment in marketable securities
The Company accounts for marketable securities in accordance with the
provisions of Statement of Financial Accounting Standards No. 115 "Accounting
for Certain Investments in Debt and Equity Securities" (SFAS 115).
Under SFAS 115, debt securities and equity securities that have readily
determinable fair values are to be classified in three categories.
Held to Maturity - the positive intent and ability to hold to
maturity. Amounts are reported at amortized cost, adjusted for amortization
of premiums and accretion of discounts.
Trading Securities - bought principally for purpose of selling them in
the near term. Amounts are reported at fair value, with unrealized gains
and losses included in earnings.
Available for Sale - not classified in one of the above categories.
Amounts are reported at fair value, with unrealized gains and losses
excluded from earnings and reported separately as a component of
shareholders' equity.
Income Taxes
Corporate income taxes were treated per Thai tax regulations. However, the
temporary differences, if any, have been provided for using the liability method
in accordance with FASB Statement No. 109, Accounting for Income Taxes.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS - (Continued)
Revenue Recognition
The Company recognizes revenue from product sales at the point of sales.
Fair Value of Financial Instruments
The carrying amount of cash, trade accounts receivable, notes receivable,
trade accounts payable and accrued payables are reasonable estimates of their
fair value because of the short maturity of these items. The carrying amounts of
the Company's credit facilities approximate fair value because the interest
rates on these instruments are subject to change with market interest rates.
Earnings (loss) per Share
Earnings (loss) per share was computed by dividing net income (loss) from
the continuing operations for the year by the weighted average shares 3 million
shares and 3 million shares of common stock outstanding during the period as of
March 31, 1996 and 1997, respectively.
Note 1 - Cash and cash equivalents
1996 1997
-------- ---------
BAHT BAHT
Cash in hand and at bank 9,907,851 49,158,081
Short-term investment - -
---------- -----------
Total 9,907,851 49,158,081
========== ===========
Note 2 - Refundable Value Added Tax
Refundable value added tax (VAT) is represented by the excess of input tax
(charged by suppliers on purchases of goods and services) over the output tax
(charged to customers on sales of goods and services). Value added tax is levied
on the valued added at each stage of production and distribution including
servicing, generally at the rate of 7 percent.
Note 3 - Transactions with related parties
The Company has certain transactions with its related parties. A portion of
the Company's assets and liabilities arose from transactions with said related
parties. These companies are related through common shareholdings and/or
directorships. The effects of these transactions are reflected in the
accompanying financial statements on the bases determined by the companies
concurred.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS - (Continued)
1996 1997
-------------- --------------
Million Baht Million Baht
Advance to related party
J.M.T. Duty Free Co., Ltd. 0.3 -
Trade accounts payable - related party
Lengle (Thailand) Co., Ltd. 30.1 35.6
Purchasing commission
Lengle (Thailand) Co., Ltd. 3.2 4.6
Advance from related party
J.M.T. Duty Free Co., Ltd. - 19.4
The above represents advance from related party for expenses which is
interest - free and payable on demand.
Note 4 - Loan to director
The Company has a loan to director which bears an interest at the rate of
MLR + 1.5% per annum.
For the three months ended March 31, 1996 and 1997, the average rate of MLR
(Minimum loan rate), were 14.50% per annum and 14.50% per annum, respectively.
Note 5 - Investments in other companies
<TABLE>
<CAPTION>
1996
-----------------------------------------------------------------------
<S> <C> <C> <C>
Provision for devaluation Net investments
Cost of investment in other companies
------------- ------------------------------ ------------------
BAHT BAHT BAHT
Travel Overseas Promotion Co., Ltd. 6,000,000 534,069 5,465,931
Top Trade Overseas Promotion Co., Ltd. 1,000,000 68,125 931,875
Global Capital Group Co., Ltd. 100,000 19,955 80,045
------------- ------------------------------ ------------------
Total 7,100,000 622,149 6,477,851
============= ============================== ==================
</TABLE>
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS - (Continued)
<TABLE>
<CAPTION>
1997
-----------------------------------------------------------------------
<S> <C> <C> <C>
Provision for devaluation Net investments
Cost of investment in other companies
------------- ------------------------------ ------------------
BAHT BAHT BAHT
Travel Overseas Promotion Co., Ltd. 6,000,000 610,126 5,389,874
Top Trade Overseas Promotion Co., Ltd. 1,000,000 68,125 931,875
Global Capital Group Co., Ltd. 100,000 19,955 80,045
------------- ------------------------------ ------------------
Total 7,100,000 698,206 6,401,794
============= ============================== ==================
</TABLE>
The Company acquired 10,000 shares of common stock in Top Trade Overseas
Promotion Co., Ltd., on October 18, 1994 an equivalent to 10% of the registered
capital. Top Trade Overseas Promotion Co., Ltd. was established in Thailand on
July 13, 1994, and has a registered capital totaling Baht 10 million divided
into 100,000 shares of common stock with Baht 100 per share. Top Trade Overseas
Promotion Co., Ltd. suffered a loss of Baht 68,125 in 1994. The amount of loss
was determined to be equal to the decline in the net realizable value of the
investment and has been reflected in the statement of income for the year ended
December 31, 1994. As for the three months ended March 31, 1996 and 1997, the
Company had not recognized any gain or loss as there were no financial reports
available.
The Company acquired 60,000 shares of common stock in Travel Overseas
Promotion Co., Ltd., on July 5, 1995 an equivalent to 10% of the registered
capital. Travel Overseas Promotion Co., Ltd. was established in Thailand on
October 14, 1993, and has registered capital totaling Baht 60 million divided
into 600,000 shares of common stock with Baht 100 per share. Travel Overseas
Promotion Co., Ltd. suffered a loss of Baht 534,069 in 1995. The amount of loss
was determined to be equal to the decline in the net realizable value of the
investment and has been reflected in the statement of Income for the years ended
December 31, 1995.
The Company acquired 10,000 shares of common stock in Global Capital Group
Co., Ltd., on July 20, 1995 an equivalent to 1% of the registered capital.
Global Capital Group Co., Ltd. was established in Thailand on June 14, 1994, and
has a registered capital totaling Baht 10 million divided into 10,000 shares of
common stock with Baht 10 per share. Global Capital Group Co., Ltd. suffered a
loss of Baht 19,955 in 1995, The amount of loss was determined to be equal to
the decline in the net realizable value of the investment and has been reflected
in the statement of Income for the year ended December 31, 1995. As for the
three months ended March 31, in 1996, the Company had not recognized any gain or
loss as there was no financial report available.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS - (Continued)
Note 6 - Investment in Closed-End Mutual Fund (trading securities)
1996 1997
---------- -----------
BAHT BAHT
At Cost 2,000,000 2,000,000
Loss on decline in market value of investment 320,000 1,000,000
---------- ----------
Net investment in mutual fund 1,680,000 1,000,000
========== ==========
On May 23, 1995, the Company acquired 200,000 investment units of Bangkok
Metropolitan Fund, equivalent to 0.05% of the registered fund. Bangkok
Metropolitan Fund, a 5 years closed-end mutual fund, was established and managed
by The Mutual Fund Public Company Limited, and has a registered fund totalling
Baht 2,000 million divided into 200 million investment units with par value of
Baht 10 each.
Note 7 - Property, Plant and Equipment - Net
1996 1997
----------- -----------
BAHT BAHT
Leasehold improvement 5,176,580 11,616,841
Selling office equipment and fixtures 12,920,939 14,566,850
----------- -----------
Sub-total 18,097,519 26,183,691
Less accumulated depreciation 7,046,192 11,410,993
----------- -----------
Total property, plant and equipment - Net 11,051,327 14,772,698
=========== ===========
Note 8 - Restricted fixed deposit
Restricted fixed deposit is pledged as guarantee with a commercial bank for
the issuance of letter of guarantee required under an agreement with the
Airports Authority of Thailand in which the Company was granted the exclusive
operating right to sell products and souvenirs, and to rent the commercial space
to carry out such activities in the International Airport of Thailand.
Note 9 - Loan from bank
The Company has a short-term loan with a local bank for Baht 100 million
which bears an interest at the rate of MLR + 1.5% per annum. The repayment
schedule is by ten equal installments of Baht 10 million, starting from
November, 1996. The short-term loan is guaranteed by two of the Company's
directors together with the related company, and the pledge of the Company's one
million shares (at a par value of Baht 100 per share) totalling Baht 100 million
in J.M.T. Duty Free Company Ltd.
For the three months ended March 31, 1996 and 1997, the average rate of MLR
(Minimum loan rate), were 14.50% per annum and 14.50% per annum, respectively.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS - (Continued)
Note 10 - Advance from director
The Company has advance from director amounting of Baht 105.96 million in
1996 for the Company's operation fund. This advance is non interest bearing
advance and will be repaid when the company has positive fund from operations.
Note 11 - Commitments and contingent liabilities
In order to obtain the exclusive rights to operate at the international and
domestic airports in Thailand, the Company entered into various agreements with
the Airports Authority of Thailand, namely agreement to operate at the
international and domestic airports and agreement to rent office space.
The Company is required to pay concession fee, rental and service fees,
property tax, and other expenses under the agreements. A summary of the
concession and rental fee payable for the remaining periods of the agreements
are as follows :
Rental and Service fee
Concession fee and Other expenses
---------------- --------------------------
Million Baht Million Baht
1997 571.62 15.27
1998 177.68 4.85
1999 20.60 0.68
As at March 31, 1996, and 1997 the Company was contingently liable for bank
guarantees totalling Baht 200.4 million and Baht 253.4 million, respectively,
issued in favour of the Airports Authority of Thailand as a performance bond.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
REPORT AND FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1995 and 1996
<PAGE>
BDO Binder (Thailand) Ltd.
Certified Public Accountants and Consultants
22nd Floor, CTI Tower
191741 New Ratchadapisak Road
Klongloey, Bangkok 10110 Thailand
Telephone: (662) 261-1251
Telefax: (662) 261-1255
To The Board of Directors and Shareholders of
J.M.T. Group Company Limited
We have audited the accompanying balance sheets of J.M.T. Group Company
Limited as of December 31, 1994 and 1995 and 1996 and the related statements of
income, changes in shareholders' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United States. Those standards require that we 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. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of J.M.T. Group Company Limited
as of December 31, 1994 and 1995 and 1996 and the results of its operations, the
changes in its shareholders' equity and its cash flows for the years then ended
in conformity with generally accepted accounting principles in the United States
applied on a consistent basis.
/S/ BDO Binder (Thailand) Ltd.
BDO Binder (Thailand) Ltd.
BANGKOK : July 7, 1997.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
BALANCE SHEETS
<TABLE>
<CAPTION>
At December 31, Conversion
---------------------------------------- ---------------
<S> <C> <C> <C> <C> <C>
Note 1994 1995 1996 1996
------ ------------ ----------- ----------- ---------------
BAHT BAHT BAHT US$
ASSETS
Current Assets
Cash and cash equivalents 1 5,354,994 11,468,345 24,952,049 973,929
Trade accounts receivable - - 1,878,830 73,334
Refundable valued added tax 2 - - 21,326,243 832,406
Advance to related parties 3 - - 2,596,356 101,341
Loan to director 4 - - 10,235,493 399,512
Inventories 18,997,314 16,039,512 72,957,834 2,847,691
Other current assets - - 137,198 5,355
------------ ----------- ----------- ---------------
Total Current Assets 24,352,308 27,507,857 134,084,003 5,233,568
Investment in non-marketable securities
Investment in other companies 5 931,875 6,477,851 6,401,794 249,875
Investment in marketable securities
Investment in closed-end mutual
fund (trading securities) 6 - 1,680,000 1,000,000 39,032
Property, plant and equipment-net 7 7,886,860 11,463,876 15,611,689 609,356
Restricted fixed deposit 8 - - 83,881,250 3,274,053
Other long-term assets 26,739 1,503,000 1,196,274 46,693
------------ ----------- ----------- ---------------
Total Assets 33,197,782 48,632,584 242,175,010 9,452,577
============ =========== =========== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank overdraft 9 2,442,702 9,132,301 560,756 21,887
Loan from bank 10 - - 100,000,000 3,903,201
Loan from finance institution 11 - - 44,828,922 1,749,763
Trade accounts payable - related party 3 15,207,152 30,073,969 32,910,278 1,284,554
Trade accounts payable 61,409,456 73,019,150 130,628,513 5,098,693
Advance from director 12 18,763,778 61,263,778 - -
Accrued payable - - 1,124,053 43,874
Other current liabilities 1,995,340 6,244,093 1,877,439 73,280
------------ ----------- ----------- ---------------
Total Liabilities 99,818,428 179,733,291 311,929,961 12,175,252
============ =========== =========== ===============
Shareholders' Equity
Share capital 13
Authorized, issued and paid up
3,000,000 common stock,
Baht 100 par value 300,000,000 300,000,000 300,000,000 11,709,602
Deficit (366,620,646) (431,100,707 ) (369,754,951) (14,432,277)
------------ ----------- ----------- ---------------
Deficit over share capital (66,620,646) (131,100,707) (69,754,951) (2,722,675)
------------ ----------- ----------- ---------------
Total Liabilities and Shareholders' Equity 33,197,782 48,632,584 242,175,010 9,452,577
============ =========== =========== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Years ended December 31, Conversion
-------------------------------------------- -------------------
<S> <C> <C> <C> <C>
1994 1995 1996 1996
------------ ------------- -------------- -------------------
BAHT BAHT BAHT US$
Sales 374,597,361 659,405,778 1,063,791,622 41,521,921
------------ ------------- -------------- -------------------
Cost of sales :
Cost of products 157,555,317 266,121,290 367,060,895 14,327,123
Concession Fee 353,173,323 388,490,667 508,973,359 19,866,251
------------ ------------- -------------- -------------------
Total cost of sales 510,728,640 654,611,957 876,034,254 34,193,374
------------ ------------- -------------- -------------------
Gross profit (loss) (136,131,279) 4,793,821 187,757,368 7,328,547
------------ ------------- -------------- -------------------
Operating expenses :
Selling expenses
Sales salaries and welfare 42,162,478 60,886,641 94,250,375 3,678,781
Rental and service fee and other
expenses under the concession agreement 6,160,061 7,304,434 13,382,759 522,356
Depreciation 2,225,028 2,361,374 3,929,785 153,387
Others 2,314,154 2,648,936 9,137,983 356,674
------------ ------------- -------------- -------------------
52,861,721 73,201,385 120,700,902 4,711,198
Administration expenses 5,307,320 6,015,311 14,521,988 566,822
------------ ------------- -------------- -------------------
Total operating expenses 58,169,041 79,216,696 135,222,890 5,278,020
------------ ------------- -------------- -------------------
Income (loss) from operations (194,300,320) (74,422,875) 52,534,478 2,050,527
------------ ------------- -------------- -------------------
Other revenues :
Interest income 538,451 170,792 11,091,751 432,933
Gain on foreign exchange 9,285,599 10,728,557 11,361,094 433,446
Other income 11,284 - 131,529 5,134
------------ ------------- -------------- -------------------
Total other revenues 9,835,334 10,899,349 22,584,374 881,513
------------ ------------- -------------- -------------------
Other expenses :
Interest expense 1,420,913 82,511 13,017,039 508,081
Loss in the investments in other companies 68,125 554,024 76,057 2,969
Loss in the investment in
closed-end mutual fund - 320,000 680,000 26,542
------------ ------------- -------------- -------------------
Total other expenses 1,489,038 956,535 13,773,096 537,592
------------ ------------- -------------- -------------------
Net income (loss) (185,954,024) (64,480,061) 61,345,756 2,394,448
============ ============= ============== ===================
Earnings (loss) per share (61.98) (21.49) 20.45 0.80
============ ============= ============== ===================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended December 31, Conversion
<S> <C> <C> <C> <C>
1994 1995 1996 1996
-------------- -------------- ------------- --------------------
BAHT BAHT BAHT US$
Cash flows from operating activities :
Net income (loss) (185,954,024) (64,480,061) 61,345,756 2,394,447
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation 2,225,028 2,361,374 3,929,785 153,387
Loss in the investments in other companies 68,125 554,024 76,057 2,969
Loss in the investments in closed-end
mutual funds - 320,000 680,000 26,542
Decrease (increase) in operating assets:
Trade accounts receivable - - (1,878,830) (73,335)
Refundable valued added tax - - (21,326,243) (832,406)
Advance to related parties - - (2,596,356) (101,341)
Loan to director - - (10,235,493) (399,512)
Inventories (6,130,403) 2,957,802 (56,918,322) (2,221,636)
Other current assets 11,781,643 - (137,198) (5,355)
Increase (decrease) in operating liabilities:
Trade accounts payable - related party 15,207,152 14,866,817 2,836,309 110,707
Trade accounts payable 556,335 18,804,610 57,609,363 2,248,609
Advance from director (35,236,222) 42,500,000 (61,263,778) (2,391,248)
Accrued payable - - 1,124,053 43,874
Other current liabilities 1,378,429 4,248,753 (4,366,654) (170,439)
-------------- -------------- ------------- --------------------
Net cash provided (used) by operating activities (196,103,937) 22,133,319 (31,121,551) (1,214,737)
-------------- -------------- ------------- --------------------
Cash flows from investing activities :
Increase in investments in other companies (1,000,000) (6,100,000) - -
Increase in investmenets
in closed-end mutual fund - (2,000,000) - -
Purchase of fixed assets (783,879) (5,938,390) (8,077,598) (315,285)
Increase in restricted fixed deposits - - (83,881,250 (3,274,053)
Decrease (increase) in other long term assets (26,739) (1,476,261) 306,726 11,972
-------------- -------------- ------------- --------------------
Net cash provided (used) by
investing activities (1,810,618) (15,514,651) (91,652,122) (3,577,366)
-------------- -------------- ------------- --------------------
Cash flows from financing activities :
Increase (decrease) in bank overdrafts 2,442,702 6,689,599 (8,571,545) (334,565)
Increase in loan from bank - - 100,000,000 3,903,201
Loan from finance institution - - 44,828,922 1,749,763
Capital contribution 200,000,000 - - -
-------------- -------------- ------------- --------------------
Net cash provided by
financing activities 202,442,702 6,689,599 136,257,377 5,318,399
-------------- -------------- ------------- --------------------
Net increase in cash and cash equivalents 4,528,147 6,113,351 13,483,704 526,296
Cash and cash equivalents - beginning of year 826,847 5,354,994 11,468,345 447,633
-------------- -------------- ------------- --------------------
Cash and cash equivalents - end of year 5,354,994 11,468,345 24,952,049 973,929
============== ============== ============= ====================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YARS ENDED DECEMBER 31, 1994, 1995 AND 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Total
Common stock Common stock Shareholders'
Shares Amount Deficit Equity Conversion
-------------- -------------- ------------- ------------- --------------
BAHT BAHT BAHT US$
Balance, January 1, 1994 1,000,000 100,000,000 (180,666,622) (80,666,622) (3,148,580)
Issuance of common stock (Note 13) 2,000,000 200,000,000 - 200,000,000 7,806,401
Net Loss - - (185,954,024) (185,954,024) (7,258,158)
-------------- -------------- ------------- ------------- --------------
Balance, December 31, 1994 3,000,000 300,000,000 (366,620,646) (66,620,646) (2,600,337)
Net Loss - - (64,480,061) (64,480,061) (2,516,786)
-------------- -------------- ------------- ------------- --------------
Balance, December 31, 1995 3,000,000 300,000,000 (431,100,707) (131,100,707) (5,117,123)
Net income - - 61,345,756 61,345,756 2,394,448
-------------- -------------- ------------- ------------- --------------
Balance December 31, 1996 3,000,000 300,000,000 (369,754,951) (69,754,951) (2,722,675)
============== ============== ============= ============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS
GENERAL INFORMATION
J.M.T. Group Company Limited (the "Company") engaged in Thailand having its
registed business address at 189/58 Trok Wat Dow Deung, Somdej Pra Pin Klao
Road, Bangkok, Thailand. The main businesses of the Company are the selling of
products and souvenirs in the international and domestic airports of Thailand.
The Company has been granted such exclusive operating rights under various
agreements with the Airports Authority of Thailand.
Thai Baht is the Company's home country currency, however, for the
convenience to the users of financial statements, the 1996 Thai Baht figures
were converted into US dollars at the exchange rate of $ 1 = Thai Baht 25.62
which was in effect on December 30, 1996 (Information source: Bank of Thailand's
official announcement).
The Company has invested in other companies (see Note 5 for details), and
also invested in Closed-End Mutual Fund (see Note 6 for details).
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of the financial statements in conformity with US generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Foreign Currency Transactions
Foreign currency transactions are recorded at the average rate of the
exchange ruling at the transaction date. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated at
the average rate of exchange ruling at that date. Exchange differences are dealt
with in the statement of income.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.
Inventory valuation
Inventory are stated at the lower of cost or market. Costs are calculated
on weighted average basis.
Depreciation
Property, plant and equipment are stated at cost and depreciated using the
straight-line method over the estimated useful lives of the assets 5 years.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS - (Continued)
Investments in non-marketable securities
Investment in other companies under 20% of interest was accounted for using
the cost method. Provision for diminution in value of the investment was set
aside in the statement of income.
Investment in marketable securities
The Company accounts for marketable securities in accordance with the
provisions of Statement of Financial Accounting Standards No. 115 "Accounting
for Certain Investments in Debt and Equity Securities" (SFAS 115).
Under SFAS 115, debt securities and equity securities that have readily
determinable fair values are to be classified in three categories.
Held to Maturity - the positive intent and ability to hold to
maturity. Amounts are reported at amortized cost, adjusted for amortization
of premiums and accretion of discounts.
Trading Securities - bought principally for purpose of selling them in
the near term. Amounts are reported at fair value, with unrealized gains
and losses included in earnings.
Available for Sale - not classified in one of the above categories.
Amounts are reported at fair value, with unrealized gains and losses
excluded from earnings and reported separately as a component of
shareholders' equity.
Income Taxes
Corporate income taxes were treated per Thai tax regulations. However, the
temporary differences, if any, have been provided for using the liability method
in accordance with FASB Statement No. 109, Accounting for Income Taxes.
Revenue Recognition
The Company recognizes revenue from product sales at the point of sales.
Fair Value of Financial Instruments
The carrying amount of cash, trade accounts receivable, notes receivable,
trade accounts payable and accrued payables are reasonable estimates of their
fair value because of the short maturity of these items. The carrying amounts of
the Company's credit facilities approximate fair value because the interest
rates on these instruments are subject to change with market interest rates.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS - (Continued)
Earnings (loss) per Share
Earnings (loss) per share was computed by dividing net income (loss) from
the continuing operations for the year by the weighted average shares 3 million
shares, 3 million shares and 3 million shares of common stock outstanding during
the year as of December 31, 1994 and 1995 and 1996, respectively.
Note 1 - Cash and cash equivalents
1994 1995 1996
BAHT BAHT BAHT
Cash in hand and at bank 5,354,994 11,468,345 24,952,049
Short-term investment - - -
------------ ------------ ------------
Total 5,354,994 11,468,345 24,952,049
============ ============ ============
Note 2 - Refundable Value Added Tax
Refundable value added tax (VAT) is represented by the excess of input tax
(charged by suppliers on purchases of goods and services) over the output tax
(charged to customers on sales of goods and services). Value added tax is levied
on the valued added at each stage of production and distribution including
servicing, generally at the rate of 7 percent.
Note 3 - Transactions with related parties
The Company has certain transactions with its related parties. A portion of
the Company's assets and liabilities arose from transactions with said related
parties. These companies are related through common shareholdings and/or
directorships. The effects of these transactions are reflected in the
accompanying financial statements on the bases determined by the companies
concurred.
1994 1995 1996
Million Baht Million Baht Million Baht
Advance to related party
J.M.T. Duty Free Co., Ltd. - - 2.59
Trade accounts payable - related party
Lengle (Thailand) Co., Ltd. 15.21 30.07 32.91
Purchase of finished goods
Lengle (Thailand) Co., Ltd. 155.42 6.65 -
Purchasing commission
Lengle (Thailand) Co., Ltd. - 17.62 13.43
The above represents advance to related party for expenses which is
interest - free and payable on demand.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS - (Continued)
Note 4 - Loan to director
The Company has a loan to director which bears an interest at the rate of
MLR + 1.5% per annum.
For the year 1996, the average rate of MLR (Minimum loan rate), was 14.25%
per annum.
Note 5 - Investments in other companies
<TABLE>
<CAPTION>
1994
---------------------------------------------------------------
<S> <C> <C> <C>
Provision for devaluation Net investments
Cost of investment in other companies
---------- ---------------------------- ---------------------
BAHT BAHT BAHT
Top Trade Overseas Promotion Co., Ltd. 1,000,000 68,125 931,875
--------- ------- --------
Total 1,000,000 68,125 931,875
========= ======= ========
</TABLE>
<TABLE>
<CAPTION>
1995
---------------------------------------------------------------
<S> <C> <C> <C>
Provision for devaluation Net investments
Cost of investment in other companies
---------- ---------------------------- ---------------------
BAHT BAHT BAHT
Travel Overseas Promotion Co., Ltd. 6,000,000 534,069 5,465,931
Top Trade Overseas Promotion Co., Ltd. 1,000,000 68,125 931,875
Global Capital Group Co., Ltd. 100,000 19,955 80,045
--------- ------- ---------
Total 7,100,000 622,149 6,477,851
========= ======= =========
</TABLE>
<TABLE>
<CAPTION>
1996
---------------------------------------------------------------
<S> <C> <C> <C>
Provision for devaluation Net investments
Cost of investment in other companies
---------- ---------------------------- ---------------------
BAHT BAHT BAHT
Travel Overseas Promotion Co., Ltd. 6,000,000 610,126 5,389,874
Top Trade Overseas Promotion Co., Ltd. 1,000,000 68,125 931,875
Global Capital Group Co., Ltd. 100,000 19,955 80,045
--------- ------- ---------
Total 7,100,000 698,206 6,401,794
========= ======= =========
</TABLE>
The Company acquired 10,000 shares of common stock in Top Trade Overseas
Promotion Co., Ltd., on October 18, 1994 an equivalent to 10% of the registered
capital. Top Trade Overseas Promotion Co., Ltd. was established in Thailand on
July 13, 1994, and has a registered capital totaling Baht 10 million divided
into 100,000 shares of common stock with Baht 100 per share. Top Trade Overseas
Promotion Co., Ltd. suffered a loss of Baht 68,125 in 1994. The amount of loss
was determined to be equal to the decline in the net realizable value of the
investment and has been reflected in the statement of income for the year ended
December 31, 1994. As for the financial years 1995 and 1996, the Company had not
recognized any gain or loss as there were no financial reports available.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS - (Continued)
The Company acquired 60,000 shares of common stock in Travel Overseas
Promotion Co., Ltd., on July 5, 1995 an equivalent to 10% of the registered
capital. Travel Overseas Promotion Co., Ltd. was established in Thailand on
October 14, 1993, and has registered capital totaling Baht 60 million divided
into 600,000 shares of common stock with Baht 100 per share. Travel Overseas
Promotion Co., Ltd. suffered a loss of Baht 534,069 and Baht 76,057 in 1995 and
1996, respectively. The amount of loss was determined to be equal to the decline
in the net realizable value of the investment and has been reflected in the
statement of Income for the years ended December 31, 1995 and 1996 respectively.
The Company acquired 10,000 shares of common stock in Global Capital Group
Co., Ltd., on July 20, 1995 an equivalent to 1% of the registered capital.
Global Capital Group Co., Ltd. was established in Thailand on June 14, 1994, and
has a registered capital totaling Baht 10 million divided into 10,000 shares of
common stock with Baht 10 per share. Global Capital Group Co., Ltd. suffered a
loss of Baht 19,955 in 1995, The amount of loss was determined to be equal to
the decline in the net realizable value of the investment and has been reflected
in the statement of Income for the year ended December 31, 1995. As for the
financial year 1996, the Company had not recognized any gain or loss as there
was no financial report available.
Note 6 - Investment in Closed-End Mutual Fund (trading securities)
1995 1996
--------- ---------
BAHT BAHT
At Cost 2,000,000 2,000,000
Loss on decline in market value of investment 320,000 1,000,000
--------- ---------
Net investment in mutual fund 1,680,000 1,000,000
========= =========
On May 23, 1995, the Company acquired 200,000 investment units of Bangkok
Metropolitan Fund, equivalent to 0.05% of the registered fund. Bangkok
Metropolitan Fund, a 5 years closed-end mutual fund, was established and managed
by The Mutual Fund Public Company Limited, and has a registered fund totalling
Baht 2,000 million divided into 200 million investment units with par value of
Baht 10 each.
Note 7 - Property, Plant and Equipment - Net
1994 1995 1996
-------- -------- --------
BAHT BAHT BAHT
Leasehold improvement - 5,176,580 11,466,991
Selling office equipment and fixtures 11,666,802 12,428,612 14,215,799
----------- ----------- -----------
Sub-total 11,666,802 17,605,192 25,682,790
Less accumulated depreciation 3,779,942 6,141,316 10,071,101
----------- ----------- -----------
Total property, plant and equipment - Net 7,886,860 11,463,876 15,611,689
=========== =========== ===========
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS - (Continued)
Note 8 - Restricted fixed deposit
Restricted fixed deposit is pledged as guarantee with a commercial bank for
the issuance of letter of guarantee required under an agreement with the
Airports Authority of Thailand in which the Company was granted the exclusive
operating right to sell products and souvenirs, and to rent the commercial space
to carry out such activities in the International Airport of Thailand.
Note 9 - Bank overdraft
The Company has an overdraft facility of Baht 5 million which bears an
interest at the rate of MOR + 1% per annum, and is guaranteed by the director
and the pledged fixed deposit.
For the year 1994, 1995, and 1996, the average rates of MOR (minimum
overdraft rate) were 11.5% per annum, 13.75% per annum and 14.25% per annum,
respectively.
Note 10 - Loan from bank
The Company has a short-term loan with a local bank for Baht 100 million
which bears an interest at the rate of MLR + 1.5% per annum. The repayment
schedule is by ten equal installments of Baht 10 million, starting from
November, 1996. The short-term loan is guaranteed by two of the Company's
directors together with the related company, and the pledge of the Company's one
million shares (at a par value of Baht 100 per share) totalling Baht 100 million
in J.M.T. Duty Free Company Ltd.
For the year 1996, the average rate of MLR (Minimum loan rate), was 14.25%
per annum.
Note 11 - Loan from finance institution
The Company issued a 30 days promissory note payable to a commercial bank
for Baht 20 million, which beared an interest at the rate of 13-14.25% per
annum.
Note 12 - Advance from director
The Company has advance from director amounting of Baht 18.76 million and
Baht 61.26 million in 1994 and 1995, respectively, for the Company's operation
fund. This advance is non interest bearing advance and will be repaid when the
company has positive fund from operations.
Note 13 - Share capital
The extraordinary meetings of shareholders held on January 3, 1994 and
January 18, 1994, passed the resolution to increase the Company's capital by
Baht 200 million by issuing 2 million new shares of common stock, par value Baht
100 per share.
<PAGE>
J.M.T. GROUP COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS - (Continued)
Note 14 - Commitments and contingent liabilities
In order to obtain the exclusive rights to operate at the international and
domestic airports in Thailand, the Company entered into various agreements with
the Airports Authority of Thailand, namely agreement to operate at the
international and domestic airports and agreement to rent office space.
The Company is required to pay concession fee, rental and service fees,
property tax, and other expenses under the agreements. A summary of the
concession and rental fee payable for the remaining periods of the agreements
are as follows :
Rental and Service fee
Concession fee and Other expenses
---------------- ------------------------
Million Baht Million Baht
1997 571.62 15.27
1998 177.68 4.85
1999 20.60 0.68
As at 31st December, 1996, the Company was contingently liable for bank
guarantees totalling Baht 248.4 million issued in favour of the Airports
Authority of Thailand as a performance bond.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
REPORT AND INTERIM FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
<PAGE>
BDO Binder (Thailand) Ltd.
Certified Public Accountants and Consultants
22nd Floor, CTI Tower
191741 New Ratchadapisak Road
Klongloey, Bangkok 10110 Thailand
Telephone: (662) 261-1251
Telefax: (662) 261-1255
To The Board of Directors and Shareholders of
J.M.T. Duty Free Company Limited
We have reviewed the accompanying balance sheet of J.M.T. Duty Free
Company Limited (the Company) as of March 31, 1997 and the related
statements of income, changes in shareholders' equity, and cash flow for
the three months then ended, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of
Certified Public Accountants. These financial statements are the
responsibility of the Companys management.
A review consists principally of inquiries of the Companys personnel
and analytical procedures applied to financial data. It 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. Accordingly, we do not express
such an opinion.
Based on our reviews, we are not aware of any material modifications
that should be made to the accompanying financial statements in order for
them to be in conformity with generally accepted accounting principles in
the United States.
/S/ BDO Binder (Thailand) Ltd.
BDO Binder (Thailand) Ltd.
BANGKOK : July 15, 1997.
<PAGE>
(UNAUDITED)
J.M.T. DUTY FREE COMPANY LIMITED
BALANCE SHEETS
AT MARCH 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Conversion
Note BAHT US$
ASSETS
Current Assets
Cash and cash equivalents 1 31,954,317 1,230,432
Trade accounts receivable 10,764,467 414,496
Refundable valued added tax 2 8,177,813 314,895
Advance for duty-free goods 6,432,007 247,671
Advance to directors 5,3 87,005,796 3,350,242
Advance to related parties 6,4 21,303,644 820,317
Inventories 213,092,174 8,205,321
Prepaid expenses 6,971,058 268,427
Other current assets 6,591,280 253,804
------------- ------------
Total Current Assets 392,292,556 15,105,605
Property, plant and equipment 7,5 104,568,251 4,026,502
Restricted fixed deposit 6 198,740,325 7,652,689
Other long-term assets 2,244,876 86,440
------------- ------------
Total Assets 697,846,008 26,871,236
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Bank overdraft 7 22,152,090 852,988
Current portion of hire-purchase payable 8 1,235,136 47,560
Current portion of long-term loan 9 244,657 9,421
Trade accounts payable 315,258,694 12,139,342
Advance from related parties 4 7,550,000 290,720
Leasehold improvement payable 11,803,683 454,512
Accrued concession fee 49,695,707 1,913,581
Accrued payable 32,455,620 1,249,735
Other current liabilities 4,137,459 159,316
------------- ------------
Total current liabilities 444,533,046 17,117,175
Hire - purchase payable - net 8 1,893,667 72,918
Long-term loan - net 9 9,729,065 374,627
------------- ------------
Total Liabilities 456,155,778 17,564,720
------------- ------------
Shareholders' Equity
Share capital
Authorized, issued and paid up
2,000,000 common stock, Baht 100 par value 200,000,000 7,701,193
Retained earnings 41,690,230 1,605,323
------------- ------------
Shareholders' Equity 241,690,230 9,306,516
------------- ------------
Total Liabilities and Shareholders' Equity 697,846,008 26,871,236
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
(UNAUDITED)
J.M.T. DUTY FREE COMPANY LIMITED
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Conversion
BAHT US$
Sales 385,672,213 14,850,682
------------- -------------
Cost of sales :
Cost of products 167,097,323 6,434,244
Concession fee 118,452,873 4,561,142
------------- -------------
Total cost of sales 285,550,196 10,995,386
------------- -------------
Gross profit 100,122,017 3,855,296
------------- -------------
Operating expenses :
Selling expenses
Sales salaries and welfare 18,800,645 723,937
Rental and service fee
and other expenses under
the concession agreement 4,545,724 175,037
Depreciation 1,951,894 75,160
Others 7,847,144 302,162
------------- -------------
33,145,407 1,276,296
Administrative expenses 12,894,783 496,526
------------- -------------
Total operating expenses 46,040,190 1,772,822
------------- -------------
Income from operation 54,081,827 2,082,474
------------- -------------
Other revenues
Interest income 4,349,866 167,496
Gain on foreign exchange 1,155,417 44,490
Other income 3,290,545 126,705
------------- -------------
Total other revenues 8,795,828 338,691
------------- -------------
Other expenses :
Interest expenses 576,777 22,209
------------- -------------
Total other expenses 576,777 22,209
------------- -------------
Net income 62,300,878 2,398,956
============= =============
Earnings per share 31.15 1.20
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
(UNAUDITED)
J.M.T. DUTY FREE COMPANY LIMITED
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Conversion
BAHT US$
Cash flows from operating activities :
Net income 62,300,878 2,398,956
Adjustments to reconcile net income to net cash
used by operating activities :
Depreciation 1,951,894 75,160
Decrease (increase) in operating assets :
Trade accounts receivable (10,764,467) (414,496)
Refundable valued added tax (5,866,564) (225,898)
Advance for duty-free goods 2,117,680 81,543
Advance for office and shop improvement 12,911,430 497,167
Advance to director (49,173,958) (1,893,491)
Advance to related parties (19,403,644) (747,156)
Inventories (113,045,437) (4,352,924)
Prepaid expenses 509,106 19,604
Other current assets (4,454,831) (171,537)
Increase (decrease) in operating liabilities :
Trade accounts payable 195,658,826 7,534,033
Decrease in advance from related company (12,596,355) (485,035)
Leasehold improvement payable 81,189 3,126
Accrued payable 24,322,312 936,554
Accrued concession fee 49,695,707 1,913,581
Other current liabilities 936,283 36,052
------------- ------------
Net cash provided by operating activities 135,180,049 5,205,239
------------- ------------
Cash flows from investing activities :
Purchase of fixed assets (77,272,870) (2,975,466)
Increase in restricted fixed deposit (38,015,866) (1,463,838)
Increase in other long-term assets (924,248) (35,589)
------------- ------------
Net cash (used) by investing activities (116,212,984) (4,474,893)
------------- ------------
Cash flows from financing activities :
Increase in bank overdrafts (1,313,699) (50,585)
Repayment of long-term loan (26,278) (1,012)
Proceeds from long-term loan 10,000,000 385,059
Proceeds from hire-purchase payable 977,904 37,655
Repayment of hire-purchase payable (885,017) (34,078)
------------- ------------
Net cash provided by financing activities 8,752,910 337,039
------------- ------------
Net increase in cash and cash equivalents 27,719,975 1,067,385
Cash and cash equivalents -beginning of period 4,234,342 163,047
------------- ------------
Cash and cash equivalents - end of period 31,954,317 1,230,432
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Common stock Retained Total
----------------------------- Shareholder's
Shares Amount earnings Equity Conversion
-------- -------- ------------ ----------------- --------------
BAHT BAHT BAHT US$
Balance, January 1, 1997 2,000,000 200,000,000 (20,610,648) 179,389,352 6,907,561
Net income - - 62,300,878 62,300,878 2,398,956
--------- ----------- ------------ ----------- ---------
Balance, March 31, 1997 2,000,000 200,000,000 41,690,230 241,690,230 9,306,516
========= =========== ============ =========== =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS
GENERAL INFORMATION
J.M.T. Duty Free Company Limited (the Company) engaged in Thailand
having its registed business address at 888/60 - 62 Plaenchit Road,
Patumwan, Bangkok, Thailand. The main businesses of the Company are the
selling of duty free products in the international an airports of Thailand.
The Company has been granted such exclusive operating rights under an
agreement with the Airports Authority of Thailand.
Thai Baht is the Companys home country currency, however, for the
convenience to the users of financial statements, the 1997 Thai Baht
figures were converted into US dollars at the exchange rate of $ 1 = Thai
Baht 25.97 which was in effect on March 31, 1997 (Information source: Bank
of Thailands official announcement).
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of the financial statements in conformity with US
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Interim financial information
The interim financial statements for the three-months ended March 31,
1997 are unaudited. In the opinion of management, such statements reflect
all adjustments (consisting of normal recurring adjustments) necessary for
a fair presentation of the results of operations for the interim periods.
The results of operations for the three-months ended March 31, 1997 are not
necessarily indicative of the results for the entire year.
Foreign Currency Transactions
Foreign currency transactions are recorded at the average rate of the
exchange ruling at the transaction date. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated
at the average rate of exchange ruling at that date. Exchange differences
are dealt with in the statement of income.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS - (Continued)
Inventory valuation
Inventory are stated at the lower of cost or market. Costs are
calculated on weighted average basis.
Depreciation
Property, plant and equipment are stated at cost and depreciated using
the straight-line method over the estimated useful lives of the assets 5
years.
Income Taxes
Corporate income taxes were treated per Thai tax regulations. However,
the temporary differences, if any, have been provided for using the
liability method in accordance with FASB Statement No. 109, Accounting for
Income Taxes.
Revenue Recognition
The Company recognizes revenue from product sales at the point of
sales.
Fair Value of Financial Instruments
The carrying amount of cash, trade accounts receivable, notes
receivable, trade accounts payable and accrued payables are reasonable
estimates of their fair value because of the short maturity of these items.
The carrying amounts of the Company's credit facilities approximate fair
value because the interest rates on these instruments are subject to change
with market interest rates.
Earnings per Share
Earnings per share was computed by dividing net income from the
continuing operations for the year by the weighted average shares
(2,000,000 shares) of common stock outstanding during the period as of
March 31, 1997.
Note 1 - Cash and cash equivalents
BAHT
------------
Cash in hand and at bank 31,954,317
Short-term investment -
------------
Total 31,954,317
============
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS - (Continued)
Note 2 - Refundable Value Added Tax
Refundable value added tax (VAT) is represented by the excess of input
tax (charged by suppliers on purchases of goods and services) over the
output tax (charged to customers on sales of goods and services). Value
added tax is levied on the valued added at each stage of production and
distribution including servicing, generally at the rate of 7 percent.
Note 3 - Advance to directors
The Company has advance to directors amounting of Baht 87 million this
advance is non interest bearing advance and payable on demand
Note 4 - Transactions with related parties
The Company has certain transactions with its related parties. A
portion of the Companys assets and liabilities arose from transactions
with said related parties. These companies are related through common
shareholdings and/or directorships. The effects of these transactions are
reflected in the accompanying financial statements on the bases determined
by the companies concurred.
BAHT
Advance to related parties ----------
J.M.T. Group Co., Ltd. 19,403,644
Downtown D.F.S. (Thailand) Co., Ltd. 1,900,000
----------
Total 21,303,644
==========
Advance from related parties
47 Co., Ltd. 4,550,000
Top China Group Co., Ltd 3,000,000
----------
Total 7,550,000
==========
The above represents advance to related parties and advance from
related parties which are interest - free and payable on demand.
Note 5 - Property, Plant and Equipment - Net
BAHT
----------
Land and building 10,447,644
Leasehold improvement 69,388,535
Selling office equipment and fixtures 20,527,436
Vehicle 6,821,213
-----------
Sub-total 107,184,828
Less accumulated depreciation 2,616,577
-----------
Total property, plant and equipment - Net 104,568,251
===========
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS - (Continued)
Note 6 - Restricted fixed deposit
Restricted fixed deposit is pledged as guarantee with a commercial
bank for the issuance of letter of guarantee required under an agreement
with the Airports Authority of Thailand in which the Company was granted
the exclusive operating right to sell products and souvenirs, and to rent
the commercial space to carry out such activities in the International
Airport of Thailand.
Note 7 - Bank overdraft
The Company has an overdraft facility of Baht 20 million which bears
an interest at the rate of 15.5% per annum and is guaranteed by the
Company's directors.
Note 8 - Hire - purchase payable - net
BAHT
----------
Hire - purchase payable 3,128,803
Less : Current portion of hire-purchase payable 1,235,136
----------
Hire - purchase payable - net 1,893,667
==========
Note 9 - Long-term loan - net
BAHT
----------
Long-term loan 9,973,722
Less : Current portion of long-term loan 244,657
----------
Long-term loan - net 9,729,065
==========
The Company has a long-term loan with a local financial institution
for Baht 10 million which bears an interest at the rate of 13.5% per annum.
The repayment schedule is by 76 months installments of Baht 129,840
(inclusive interest), starting from March 4, 1997. The long-term loan is
guaranteed by the Company's land.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
NOTES TO INTERIM FINANCIAL STATEMENTS - (Continued)
Note 10 - Commitments and contingent liabilities
In order to obtain the exclusive rights to operate at the
international and domestic airports in Thailand, the Company entered into
various agreements with the Airports Authority of Thailand, namely
agreement to operate at the international and domestic airports and
agreement to rent office space.
The Company is required to pay concession fee, rental and service
fees, property tax, and other expenses under the agreements. A summary of
the concession and rental fee payable for the remaining periods of the
agreements are as follows :
Rental and Service fee
Concession fee and Other expenses
---------------- -------------------------
Million Baht Million Baht
1997 650 14.67
1998 675 14.67
1999 700 14.67
2000 725 14.67
2001 750 14.67
As at March 31, 1997 the Company was contingently liable for bank
guarantees totalling Baht 347.5 million issued in favour of the Airports
Authority of Thailand as a performance bond.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
REPORT AND FINANCIAL STATEMENTS
DECEMBER 31, 1996
<PAGE>
BDO Binder (Thailand) Ltd.
Certified Public Accountants and Consultants
22nd Floor, CTI Tower
191741 New Ratchadapisak Road
Klongloey, Bangkok 10110 Thailand
Telephone: (662) 261-1251
Telefax: (662) 261-1255
To The Board of Directors and Shareholders of
J.M.T. Duty Free Company Limited
We have audited the accompanying balance sheets of J.M.T. Duty Free
Company Limited as of December 31, 1996 and the related statements of
income, changes in shareholders equity and cash flow for the eleven months
then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in the United States. Those standards require that we 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. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of J.M.T. Duty
Free Company Limited as of December 31, 1996 and the results of its
operations, the changes in its shareholders equity and its cash flow for
the eleven months then ended in conformity with generally accepted
accounting principles in the United States applied on a consistent basis.
/S/ BDO Binder (Thailand) Ltd.
BDO Binder (Thailand) Ltd.
BANGKOK : July 15, 1997.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
BALANCE SHEETS
AT DECEMBER 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Conversion
Note BAHT US$
ASSETS
Current Assets
Cash and cash equivalents 1 4,234,342 165,275
Refundable valued added tax 2 2,311,249 90,213
Advance for duty-free goods 8,549,687 333,711
Advance for office and shop 13,140,187 512,888
improvement
Advance to directors 3 37,831,838 1,476,652
Advance to related party 4 1,900,000 74,161
Inventories 100,046,737 3,905,025
Prepaid expenses 7,480,164 291,966
Other current assets 1,907,692 74,461
------------ -----------
Total Current Assets 177,401,896 6,924,352
Property, plant and equipment-net 5 29,247,274 1,141,580
Restricted fixed deposit 6 160,724,459 6,273,398
Other long-term assets 1,320,628 51,546
------------ -----------
Total Assets 368,694,257 14,390,876
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Bank overdraft 7 23,465,789 915,917
Current portion of hire-purchase 8 1,626,557 63,488
payable
Trade accounts payable 119,599,868 4,668,223
Advance from related parties 4 20,146,356 786,353
Leasehold improvement payable 11,722,493 457,552
Accrued payable 8,133,308 317,459
Other current liabilities 3,201,176 124,948
------------ -----------
Total current liabilities 187,895,547 7,333,940
Hire - purchase payable - net 9 1,409,358 55,010
------------ -----------
Total Liabilities 189,304,905 7,388,950
------------ -----------
Shareholders' Equity
Share capital
Authorized, issued and paid up
2,000,000 common stock, Baht 100 par value 200,000,000 7,806,401
Net loss (20,610,648) (804,475)
------------ ------------
Shareholders' Equity 179,389,352 7,001,926
------------ ------------
Total Liabilities and Shareholders' equity 368,694,257 14,390,876
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
DIRECTOR
J.M.T. DUTY FREE COMPANY LIMITED
STATEMENTS OF INCOME
FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Conversion
BAHT US$
Sales - -
Cost of products 168,552 6,579
------------ ---------
Gross profit (168,552) (6,579)
------------ ---------
Operating expenses :
Selling expenses
Sales salaries and welfare 14,381,646 561,344
Rental and service fee and
other expenses under
the concession agreement 346,275 13,516
Depreciation 664,682 25,944
Others 251,587 9,820
------------ ---------
15,644,190 610,624
Administrative expenses 8,516,170 332,403
------------- ---------
Total operating expenses 24,160,360 943,027
------------- ---------
Loss from operation (24,328,912) (949,606)
------------- ---------
Other revenues :
Interest income 3,957,549 154,471
Gain on foreign exchange 446,870 17,442
------------- ---------
Total other revenues 4,404,419 171,913
------------- ---------
Other expenses :
Interest expenses 686,155 26,782
------------- ---------
Total other expenses 686,155 26,782
------------- ---------
Net loss (20,610,648) (804,475)
============= =========
Loss per share (15.46) (0.60)
============= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
STATEMENTS OF CASH FLOWS
FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Conversion
BAHT US$
Cash flows from operating activities :
Net income (20,610,648) (804,475)
Adjustments to reconcile net income to net cash
used by operating activities :
Depreciation 664,682 25,944
Decrease (increase) in operating assets :
Refundable valued added tax (2,311,249) (90,213)
Advance for duty-free goods (8,549,687) (333,711)
Advance for office and shop improvement (13,140,187) (512,888)
Advance to director (37,831,838) (1,476,653)
Advance to related party (1,900,000) (74,161)
Inventories (100,046,737) (3,905,025)
Prepaid expenses (7,480,164) (291,966)
Other current assets (1,907,692) (74,461)
Increase (decrease) in operating liabilities :
Trade accounts payable 119,599,868 4,668,223
Advance from related parties 20,146,356 786,353
Leasehold improvement payable 11,722,493 457,552
Accrued payable 8,133,308 317,459
Other current liabilities 3,201,176 124,948
--------------- --------------
Net cash provided by operating activities (30,310,319) (1,183,072)
--------------- --------------
Cash flows from investing activities :
Purchase of fixed assets (29,911,956) (1,167,524)
Increase in restricted fixed deposit (160,724,459) (6,273,398)
Increase in other long-term assets (1,320,628) (51,547)
Increase in hire - purchase payable 3,035,915 118,498
--------------- --------------
Net cash (used) by investing activities (188,921,128) (7,373,971)
--------------- --------------
Cash flows from financing activities :
Increase in bank overdrafts 23,465,789 915,917
Capital contribution 200,000,000 7,806,401
--------------- --------------
Net cash provided by financing activities 223,465,789 8,722,318
--------------- --------------
Net increase in cash and cash equivalents 4,234,342 165,275
Cash and cash equivalents - beginning of period - -
--------------- --------------
Cash and cash equivalents - end of period 4,234,342 165,275
=============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Common stock Total
------------------------------ Shareholder's
Shares Amount Deficit Equity Conversion
--------------- ----------- ----------- -------------- ------------
BAHT BAHT BAHT US$
Issuance of common stock on
February 26, 1996 2,000,000 200,000,000 - 200,000,000 7,806,401
Net loss - - (20,610,648) (20,610,648) (804,475)
---------- ----------- ------------ ------------ ----------
Balance, December 31, 2,000,000 200,000,000 (20,610,648) 179,389,352 7,001,926
========== =========== ============ ============ ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS
GENERAL INFORMATION
J.M.T. Duty Free Company Limited (the Company) engaged in Thailand
having its registed business address at 888/60 - 62 Plaenchit Road,
Patumwan, Bangkok, Thailand. The main businesses of the Company are the
selling of duty free products in the international an airports of Thailand.
The Company has been granted such exclusive operating rights under an
agreement with the Airports Authority of Thailand.
Thai Baht is the Companys home country currency, however, for the
convenience to the users of financial statements, the 1996 Thai Baht
figures were converted into US dollars at the exchange rate of $ 1 = Thai
Baht 25.62 which was in effect on December 30, 1996 (Information source:
Bank of Thailand's official announcement).
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of the financial statements in conformity with US
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Foreign Currency Transactions
Foreign currency transactions are recorded at the average rate of the
exchange ruling at the transaction date. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated
at the average rate of exchange ruling at that date. Exchange differences
are dealt with in the statement of income.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.
Inventory valuation
Inventory are stated at the lower of cost or market. Costs are
calculated on weighted average basis.
Depreciation
Property, plant and equipment are stated at cost and depreciated using
the straight-line method over the estimated useful lives of the assets 5
years.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS - (Continued)
Income Taxes
Corporate income taxes were treated per Thai tax regulations. However,
the temporary differences, if any, have been provided for using the
liability method in accordance with FASB Statement No. 109, Accounting for
Income Taxes.
Revenue Recognition
The Company recognizes revenue from product sales at the point of
sales.
Fair Value of Financial Instruments
The carrying amount of cash, trade accounts receivable, notes
receivable, trade accounts payable and accrued payables are reasonable
estimates of their fair value because of the short maturity of these items.
The carrying amounts of the Company's credit facilities approximate fair
value because the interest rates on these instruments are subject to change
with market interest rates.
Earnings per Share
Earnings per share was computed by dividing net income from the
continuing operations for the year by the weighted average shares
(1,333,333 shares) of common stock outstanding during the period as of
December 31, 1996.
Note 1 - Cash and cash equivalents
BAHT
Cash in hand and at bank 4,234,342
Short-term investment -
-----------
Total 4,234,342
===========
Note 2 - Refundable Value Added Tax
Refundable value added tax (VAT) is represented by the excess of input
tax (charged by suppliers on purchases of goods and services) over the
output tax (charged to customers on sales of goods and services). Value
added tax is levied on the valued added at each stage of production and
distribution including servicing, generally at the rate of 7 percent.
Note 3 - Advance to directors
The Company has advance to directors amounting of Baht 37.8 million
this advance is non interest bearing advance and payable on demand
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS - (Continued)
Note 4 - Transactions with related parties
The Company has certain transactions with its related parties. A
portion of the Companys assets and liabilities arose from transactions
with said related parties. These companies are related through common
shareholdings and/or directorships. The effects of these transactions are
reflected in the accompanying financial statements on the bases determined
by the companies concurred.
BAHT
Advance to related party
Downtown D.F.S. (Thailand) Co., Ltd 1,900,000
===========
Advance from related parties
Lengle (Thailand) Co., Ltd. 10,000,000
47 Co., Ltd 4,550,000
Top China Group Co., Ltd 3,000,000
J.M.T. Group Co., Ltd 2,596,356
-----------
Total 20,146,356
===========
The above represents advance to related party and advance from related
parties which are interest - free and payable on demand.
Note 5 - Property, Plant and Equipment - Net
BAHT
Leasehold improvement 16,639,172
Selling office equipment and fixtures 7,602,880
Vehicle 5,669,904
-----------
Sub-total 29,911,956
Less accumulated depreciation 664,682
-----------
Total property, plant and equipment - Net 29,247,274
===========
Note 6 - Restricted fixed deposit
Restricted fixed deposit is pledged as guarantee with a commercial
bank for the issuance of letter of guarantee required under an agreement
with the Airports Authority of Thailand in which the Company was granted
the exclusive operating right to sell products and souvenirs, and to rent
the commercial space to carry out such activities in the International
Airport of Thailand.
<PAGE>
J.M.T. DUTY FREE COMPANY LIMITED
NOTES TO FINANCIAL STATEMENTS - (Continued)
Note 7 - Bank overdraft
The Company has an overdraft facility of Baht 20 million which bears
an interest at the rate of 15.5% per annum and is guaranteed by the
Company's directors.
Note 8 - Hire - purchase payable - net
BAHT
Hire - purchase payable 3,035,915
Less : Current portion of hire - purchase payable 1,626,557
-----------
Hire - purchase payable - net 1,409,358
===========
Note 9 - Commitments and contingent liabilities
In order to obtain the exclusive rights to operate at the
international and domestic airports in Thailand, the Company entered into
various agreements with the Airports Authority of Thailand, namely
agreement to operate at the international and domestic airports and
agreement to rent office space.
The Company is required to pay concession fee, rental and service
fees, property tax, and other expenses under the agreements. A summary of
the concession and rental fee payable for the remaining periods of the
agreements are as follows :
Rental and Service fee
Concession fee and Other expenses
----------------- ------------------------
Million Baht Million Baht
1997................................650 14.67
1998................................675 14.67
1999................................700 14.67
2000................................725 14.67
2001................................750 14.67
As at December 31, 1996 the Company was contingently liable for bank
guarantees totalling Baht 347.3 million issued in favour of the Airports
Authority of Thailand as a performance bond.
<PAGE>
KING POWER INTERNATIONAL GROUP CO., LTD.
INTRODUCTION TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
The Pro Forma Consolidated Balance Sheet as of March 31, 1997 and the Pro
Forma Consolidated Statements of Income for the three months ended March 31,
1997 and for the year ended December 31, 1996 present the results of continuing
operations of Immune America, Inc. (now known as King Power International Group
Co., Ltd.), J.M.T. Group Co., Ltd. and J.M.T. Duty Free Co., Ltd. at historical
cost. The merger of King Power International Group Co., Ltd., J.M.T. Group Co.,
Ltd. and J.M.T. Duty Free Co., Ltd. can be described as a step reverse
acquisition where King Power International Group Co., Ltd. (a non-operating
public shell company at the merger date) acquired J.M.T. Group Co., Ltd. and
J.M.T. Duty Free Co., Ltd. Consequently, the merger has been accounted for as a
recapitalization and all assets and liabilities of J.M.T. Group Co., Ltd. and
J.M.T. Duty Free Co., Ltd. are recognized at historical cost. All future
presentations of the registrant's results of operations for the periods prior to
the June 12, 1997 merger will be the combined results of J.M.T. Group Co., Ltd.
and J.M.T. Duty Free Co., Ltd.
These statements include all material adjustments necessary to present
the pro forma historical results of the above described transactions. The pro
forma information does not purport to be indicative of the financial position or
the results of operations which would have actually been obtained if the
acquisition transaction had been consummated on the dates indicated. In
addition, the pro forma financial information does not purport t be indicative
of the financial position or results of operations that may be obtained in the
future.
The pro forma financial information has been prepared by the Registrant
and all calculations have been made by the Registrant based on assumptions
deemed appropriate by the Registrant. Certain of these assumptions have been set
forth under the Notes to Pro Forma Consolidated Financial Information.
The pro forma financial information should be read in conjunction with
the Registrant's historical financial statements and notes thereto and the
related historical financial statements and notes thereto for the acquired
companies.
<PAGE>
KING POWER INTERNATIONAL GROUP CO., LTD.
PRO - FORMA CONSOLIDATED
BALANCE SHEETS
AS AT MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
King Power
International Group J.M.T. Group J.M.T. Duty Free Pro-Forma
Co., Ltd. Co., Ltd. Co., Ltd. Adjustments Pro-Forma
------------- ------------- ---------------- ----------- -----------
US$ US$ US$ US$ US$
ASSETS
Current Assets
Cash and cash equivalents 1,317 1,892,880 1,230,432 3,124,629
Trade accounts receivable 147,060 414,496 561,556
Refundable valued added tax 1,591,023 314,895 1,905,918
Advance for duty-free goods 247,671 247,671
Advance to related parties 820,317 820,317
Advance to other companies 83,791 0 83,791
Loan to director 745,109 3,350,242 4,095,351
Inventories 7,926,863 8,205,321 16,132,184
Prepaid expenses 268,427 268,427
Other current assets 87,414 253,804 341,218
----------- ---------- ---------- -------- ----------
Total Current Assets 1,317 12,474,140 15,105,605 0 27,581,062
----------- ---------- ---------- -------- ----------
Investments in other companies 246,507 0 246,507
Investment in closed-end mutual 38,506 0 38,506
fund ----------- ---------- ---------- -------- ----------
Property, plant and equipment 1,008,228 4,127,256 5,135,484
Less : accumulated depreciation (439,391) (100,754) (540,145)
----------- ---------- ---------- -------- ----------
Net property, plant and equipment 0 568,837 4,026,502 0 4,595,339
Restricted fixed deposit 3,267,669 7,652,689 10,920,358
Other long-term assets 88,363 86,440 174,803
----------- ---------- ---------- -------- ----------
Total Assets 1,317 16,684,022 26,871,236 0 43,556,575
=========== ========== ========== ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Bank overdraft 0 852,988 852,988
Loan from bank 3,465,537 0 3,465,537
Current portion of hire-purchase payable 0 47,560 47,560
Current portion of long-term loan 0 9,421 9,421
Trade accounts payable 14,064,261 12,139,342 26,203,603
Advance from related parties 747,156 358,105 1,105,261
Leasehold improvement payable 0 454,512 454,512
Accrued concession fee 0 1,913,581 1,913,581
Accrued payable 12,354 1,249,735 1,262,089
Other current liabilities 78,226 91,931 170,157
----------- ---------- ---------- --------- ----------
Total current liabilities 0 18,367,534 17,117,175 0 35,484,709
----------- ---------- ---------- --------- ----------
Hire-purchase payable - net 0 72,918 72,918
Long-term loan - net 0 374,627 374,627
----------- ---------- ---------- --------- ----------
Total Liabilities 0 18,367,534 17,564,720 0 35,932,254
----------- ---------- ---------- --------- ----------
Minority Interest 465,326 (3) 465,326
Shareholders' Equity
Common stock, $0.001 par value
100,000,000 shares authorized
20,000,000 shares issued and 275 19,725 (1) 20,000
outstanding
Treasury stock (6,000) 6,000 (1) 0
Paid-in capital 151,186 18,619,106 (2) 18,770,292
Deficit accumulated during the
development stage (144,144) 144,144 (2) 0
Share capital
Authorized, issued and paid up
3,000,000 common stock, 0 11,551,791 0 (11,551,791)(2) 0
US$ 3.85 par value
2,000,000 common stock, 0 0 7,701,193 (7,701,193)(2) 0
US$ 3.85 par value
Retained earnings (deficit) 1,317 (13,235,303) 1,605,323 (1,317)(2) (11,629,980)
----------- ---------------------------------------------- -----------
Shareholders' Equity 1,317 (1,683,512) 9,306,516 (465,326) 7,624,321
----------- ---------------------------------------------- -----------
Total Liabilities and 1,317 16,684,022 26,871,236 (465,326) 43,556,575
Shareholders' Equity =========== ============================================== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
KING POWER INTERNATIONAL GROUP CO., LTD.
PRO - FORMA CONSOLIDATED
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
King Power
International Group J.M.T. Group J.M.T.Duty Free Pro-Forma
Co., Ltd. Co., Ltd. Co., Ltd. Adjustment Pro-Forma
--------------------------------------------------------------------------------
US$ US$ US$ US$ US$
Sales 0 12,468,245 14,850,682 27,318,927
Gain on foreign exchange 0 133,451 44,489 177,940
------------ ------------------------------------------------ ----------
Total sales and other 0 12,601,696 14,895,171 0 27,496,867
revenue ------------ ------------------------------------------------ ----------
Cost of sales : 0
Cost of products 0 5,196,737 6,434,244 11,630,981
Concession fee 0 5,239,666 4,561,142 9,800,808
------------ ------------------------------------------------ ----------
Total cost of sales 0 10,436,403 10,995,386 0 21,431,789
------------ ------------------------------------------------ ----------
Gross profit (loss) 0 2,165,293 3,899,785 6,065,078
------------ ------------------------------------------------ ----------
Operating expenses : 0
Selling expenses 0
Sales salaries and welfare 0 877,114 723,937 1,601,051
Rental and service fee and
other expenses under 0 196,753 175,037 371,790
the concession agreement
Depreciation 0 51,594 75,160 126,754
Others 0 184,801 302,162 486,963
------------ ------------------------------------------------ ----------
0 1,310,262 1,276,296 0 2,586,558
Administrative expenses 311 162,602 496,526 659,439
------------ ------------------------------------------------ ----------
Total operating expenses 311 1,472,864 1,772,822 0 3,245,997
------------ ------------------------------------------------ ----------
Income (loss) from operation (311) 692,429 2,126,963 0 2,819,081
------------ ------------------------------------------------ ----------
Other revenues :
Interest income 0 329,724 167,496 497,220
Other income 0 21,678 126,706 148,384
------------ ------------------------------------------------ ----------
Total other revenues 0 351,402 294,202 0 645,604
------------ ------------------------------------------------ ----------
Other expenses :
Interest expenses 0 41,361 22,209 63,570
Minority interest in income 119,948 (3) 119,948
of subsidiary
------------ ------------------------------------------------ ----------
Total other expenses 0 41,361 22,209 119,948 183,518
------------ ------------------------------------------------ ----------
Net income (loss) (311) 1,002,470 2,398,956 (119,948) 3,281,167
============ ================================================ ==========
Pro - forma earnings (loss) per shares (5) 0.16
==========
Pro - forma weighted average common 20,000,000
shares outstanding ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
KING POWER INTERNATIONAL GROUP CO., LTD.
PRO - FORMA CONSOLIDATED
STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
King Power
International Group J.M.T. Group J.M.T. Duty Free Pro-Forma
Co., Ltd. Co., Ltd. Co., Ltd. Adjustment Pro-Forma
US$ US$ US$ US$ US$
Sales 0 41,521,921 0 41,521,921
Gain on foreign exchange 0 443,446 17,208 460,654
-------- ----------------------------------- ---------- ----------
Total sales and other 0 41,965,367 17,208 0 41,982,575
revenues -------- ----------------------------------- ---------- ----------
Cost of sales :
Cost of products 0 14,327,123 6,490 14,333,613
Concession fee 0 19,866,251 0 19,866,251
-------- ----------------------------------- ---------- ----------
Total cost of sales 0 34,193,374 6,490 0 34,199,864
-------- ----------------------------------- ---------- ----------
Gross profit (loss) 0 7,771,993 10,718 7,782,711
-------- ----------------------------------- ---------- ----------
Operating expenses :
Selling expenses
Sales salaries and welfare 0 3,678,781 553,779 4,232,560
Rental and service fee
and other expenses 0 522,356 13,334 535,690
under the concession
agreement
Depreciation 0 153,387 25,594 178,981
Others 0 356,674 9,688 366,362
-------- ----------------------------------- ---------- ----------
0 4,711,198 602,395 0 5,313,593
Administrative expenses 9,889 566,822 327,923 76,641 (4) 981,275
-------- ----------------------------------- ---------- ----------
Total operating 9,889 5,278,020 930,318 76,641 6,218,227
expenses -------- ----------------------------------- ---------- ----------
Income (loss) from (9,889) 2,493,973 (919,600) (76,641) 1,564,484
operation -------- ----------------------------------- ---------- ----------
Other revenues :
Interest income 0 432,933 152,389 585,322
Other income 0 5,134 0 5,134
-------- ----------------------------------- ---------- ----------
Total other revenues 0 438,067 152,389 0 590,456
-------- ----------------------------------- ---------- ----------
Other expenses :
Interest expenses 0 508,081 26,422 534,503
Loss in the investments 0 2,969 0 2,969
in other companies
Loss in the investments 0 26,542 0 26,542
in closed-end mutual
funds
Minority interest in (39,682)(3) (39,682)
loss of subsidiary
-------- ----------------------------------- ---------- ----------
Total other expenses 0 537,592 26,422 (39,682) 524,332
-------- ----------------------------------- ---------- ----------
Net income (loss) (9,889) 2,394,448 (793,633) (36,959) 1,553,967
======== =================================== ========== ==========
Pro - forma (5) 0.08
earnings (loss) ==========
Pro - forma weighted 20,000,000
average common ==========
shares outstanding
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
KING POWER INTERNATIONAL GROUP CO., LTD.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)
The Pro Forma Consolidated Balance Sheet as of March 31, 1997 and the Pro
Forma Consolidated Statements of Income for the three months ended March 31,
1997 and for the year ended December 31, 1996 are derived from the historical
balance sheets and statements of income of Immune America, Inc. (now known as
King Power International Group Co., Ltd.), J.M.T. Group Co., Ltd. and J.M.T.
Duty Free Co., Ltd. that are contained in this Form 8-K/A. The pro forma
financial information reflects adjustments to record the effect of the June 12,
1997 "reverse acquisition" of J.M.T. Group Co., Ltd. and J.M.T. Duty Free Co.,
Ltd. by King Power International Group Co., Ltd. This transaction is recorded as
a step reverse acquisition whereby the "reverse acquisition" of J.M.T. Group
Co., Ltd. and J.M.T. Duty Free Co., Ltd. by King Power International Group Co.,
Ltd. (a non-operating public shell company at the merger date) is treated as a
recapitalization and all assets and liabilities of J.M.T. Group Co., Ltd. and
J.M.T. Duty Free Co., Ltd. are recognized at historical cost.
The pro forma consolidated financial information is presented in US Dollars, and
is derived form the "convenience conversions" provided on the related financial
information contained in this Form 8-K/A. The US Dollar balances are used for
consistency with the Registrant's historical filings with the Commission.
The pro forma information does not purport to be indicative of the financial
position or the results of operations which would have actually been obtained if
the acquisition transaction had been consummated on the dates indicated. In
addition, the pro forma financial information does not purport t be indicative
of the financial position or results of operations that may be obtained in the
future.
The pro forma financial information should be read in conjunction with the
Registrant's historical financial statements and notes thereto and the related
historical financial statements and notes thereto for the acquired companies.
The footnotes depicted on the Pro Forma Consolidated Financial Information are
described below:
(1) Common stock was adjusted to reflect the pro forma effects of the issuance
of 958,018 shares of the Company's common stock (33,334 shares from
treasury) as compensation for arrangement of the merger transaction. These
shares were registered under Form S-8, filed on May 5, 1997. The
recapitalization adjustment is required to reflect the pro forma capital
structure.
(2) Stockholders' equity was adjusted to reflect the issuance of 18,800,000
shares of the Registrant's common stock in return for 100% of the common
stock of J.M.T. Group Co., Ltd. and 95% of the common stock of J.M.T. Duty
Free Co., Ltd. The recapitalization adjustment is required to reflect the
pro forma capital structure.
<PAGE>
KING POWER INTERNATIONAL GROUP CO., LTD.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION, continued
(Unaudited)
(3) The minority interest is created upon the acquisition of 95% of the common
stock of J.M.T. Duty Free Co., Ltd. Likewise, similar adjustments are
required to reflect the minority interest in the pro forma statements of
income.
(4) This adjustment is necessary to record the compensation expense associated
with the transaction described in Note 1, as if the transaction had
occurred at the beginning of the fiscal year presented.
(5) The pro forma earnings per share calculation is based on the pro forma
weighted average shares outstanding at March 31, 1997 and December 31,
1997, assuming the merger transaction (and the associated stock issuances)
occurred at the beginning of the fiscal year presented.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KING POWER INTERNATIONAL GROUP CO., LTD.
/s/ Vichai Raksriaksorn
By: ________________________________________________________
Vichai Raksriaksorn, President and Chairman of the Board
Dated: July 22, 1997
