VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED REVIEW OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS AND INTERIM FINANCIAL STATEMENTS SEPTEMBER 30, 2000 AND 1999 AUDITOR'S REPORT ON REVIEW OF FINANCIAL STATEMENTS To The Shareholders of Vibhavadi Medical Center Public Company Limited I have reviewed the consolidated balance sheet of Vibhavadi Medical Center Public Company Limited and its subsidiary as at September 30, 2000, and the related consolidated statements of income for the three-month and nine-month periods ended September 30, 2000 and 1999, changes in shareholders' equity and cash flows statements for the nine-month periods ended September 30, 2000 and 1999, and the separate financial statements of Vibhavadi Medical Center Public Company limited for the same periods. These financial statements are the responsibility of the Company's management. My responsibility is to issue a report on these financial statements based on my review. I conducted my review in accordance with the auditing standards applicable to review engagement. Those standards require that I plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review has limited primarily to inquiries of Company's personnel and analytical procedures applied to financial data and thus provides less assurance than an examination in accordance with generally accepted auditing standards. Therefore, I do not express such an opinion to the reviewed financial statements. Based on my review, nothing has come to my attention that causes me to believe that such consolidated financial statements and the financial statements of the Company only are not presented fairly, in all material respects, in accordance with generally accepted accounting principles. -2- I have audited the consolidated financial statements of Vibhavadi Medical Center Public Company Limited and its subsidiary for the year ended December 31, 1999, and the financial statements of Vibhavadi Medical Center Public Company Limited for the year then ended, in accordance with generally accepted auditing standards and presented with unqualified opinion according to the report on February 11, 2000. The balance sheet as at December 31, 1999, shown as comparison is an integral part of such audited and reported financial statements. I do not apply any other auditing procedures after the reported date. (Mr. Chaiyakorn Aunpitipongsa) Certified Public Accountant Registration No.3196 November 2, 2000 VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED AND SUBSIDIARY BALANCE SHEETS ASSETS THOUSAND BAHT CONSOLIDATED THE COMPANY ONLY As at As at As at As at September 30, 2000 December 31, 1999 September 30, 2000 December 31, 1999 Unaudited Audited Unaudited Audited Reviewed Reviewed Current Assets Cash on hand and at banks 12,958 20,331 7,244 19,250 Short-term investments 251 3,363 251 3,363 Trade accounts receivable (Note 12.1) 36,291 38,153 32,464 34,139 Less Allowance for doubtful accounts (Notes 3.2 and 12.1) (10,406) (11,158) (8,221) (9,342) Trade accounts receivable-net 25,885 26,995 24,243 24,797 Inventories (Note 3.3) 16,604 18,086 16,604 18,071 Other current assets Rental receivable - - 10,500 5,100 Interest receivable 12,816 13,606 12,814 13,606 Others 2,510 2,185 2,237 2,366 Total Other Current Assets 15,326 15,791 25,551 21,072 Total Current Assets 71,024 84,566 73,893 86,553 Investments in Subsidiary and Related Parties (Notes 3.4 and 4) 153,733 153,733 154,997 154,449 Loans to Related Parties (Notes 5 and 12.2) 77,100 76,150 77,100 76,150 Property, Plant and Equipments-net (Note 3.5 ) 833,980 857,289 829,162 852,140 Investment in Land (Notes 3.6 and 6) 150,770 - 150,770 - Other Assets Deposit of land (Note 6) - 102,297 - 102,297 Others 4,800 6,949 4,176 6,305 TOTAL ASSETS 1,291,407 1,280,984 1,290,098 1,277,894 Notes to the interim financial statements form an integral part of these statements. VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED AND SUBSIDIARY BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY THOUSAND BAHT CONSOLIDATED THE COMPANY ONLY As at As at As at As at September 30, 2000 December 31, 1999 September30, 2000 December 31, 1999 Unaudited Audited Unaudited Audited Reviewed Reviewed Current Liabilities Bank overdrafts and loans from financial institutions 4,102 69,679 4,102 69,679 Trade accounts payable 27,271 25,528 27,271 25,528 Current portion of Financial lease payable 603 642 603 642 Assets payable 1,471 1,605 1,471 1,605 Long-term loans (Note 7) 51,723 22,474 51,723 22,474 Total portion due within one year 53,797 24,721 53,797 24,721 Other current liabilities Accrued interest 86 2,075 86 2,075 Accrued doctors' fee 7,866 8,158 7,866 8,158 Share subscription payable 12,500 12,500 12,500 12,500 Others 7,164 6,125 8,417 5,341 Total other current liabilities 27,616 28,858 28,869 28,074 Total Current Liabilities 112,786 148,786 114,039 148,002 Financial Lease Payable-net 612 1,067 612 1,067 Assets Payable-net 267 1,471 267 1,471 Long-Term Loans-net (Note 7) 372,973 334,598 372,973 334,598 Other Liabilities 2,672 2,416 110 110 Total Liabilities 489,310 488,338 488,001 485,248 Notes to the interim financial statements form an integral part of these statements. VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED AND SUBSIDIARY BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY (CONTINUED) THOUSAND BAHT CONSOLIDATED THE COMPANY ONLY As at As at As at As at September 30, 2000 December 31, 1999 September 30, 2000 December 31, 1999 Unaudited Audited Unaudited Audited Reviewed Reviewed Shareholders' Equity Share capital Authorized share capital 40,000,000 ordinary shares of Baht 10 par value 400,000 400,000 400,000 400,000 Issued and paid-up share capital 35,964,603 ordinary shares at Baht 10 each 359,646 359,646 359,646 359,646 Premium on share capital 434,233 434,233 434,233 434,233 Retained earnings (deficits) Appropriated Legal reserve 6,365 6,365 6,365 6,365 Unappropriated 1,853 (7,598) 1,853 (7,598) Total Shareholders' Equity 802,097 792,646 802,097 792,646 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,291,407 1,280,984 1,290,098 1,277,894 Notes to the interim financial statements form an integral part of these statements. UNAUDITED REVIEWED VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED AND SUBSIDIARY STATEMENTS OF INCOME FOR THE THREE - MONTH PERIODS ENDED SEPTEMBER 30, THOUSAND BAHT EXCEPT EARNINGS PER SHARE PRESENTED IN BAHT CONSOLIDATED THE COMPANY ONLY 2000 1999 2000 1999 REVENUES Income from medical treatment 109,664 108,772 109,664 108,772 Income from rental and services 4,814 4,130 1,800 1,500 Company's portion in net income of subsidiary company - - - 412 Other income 3,325 3,358 3,202 3,268 Total Revenues 117,803 116,260 114,666 113,952 EXPENSES Cost of medical treatment 82,409 77,284 82,409 77,284 Selling and administrative expenses 21,888 20,645 18,811 18,546 Company's portion in net loss of subsidiary company - - 91 - Loss on exchange rate - 3,530 - 3,530 Interest expenses 9,601 10,865 9,601 10,865 Total Expenses 113,898 112,324 110,912 110,225 INCOME BEFORE INCOME TAX 3,905 3,936 3,754 3,727 INCOME TAX EXPENSE 1,564 209 1,413 - NET INCOME 2,341 3,727 2,341 3,727 EARNINGS PER SHARE (BAHT) (Note 3.8) 0.06 0.10 0.06 0.10 (The number of share capital 35,964,603 shares) Notes to the interim financial statements form an integral part of these statements. UNAUDITED REVIEWED VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED AND SUBSIDIARY STATEMENTS OF INCOME FOR THE NINE - MONTH PERIODS ENDED SEPTEMBER 30, THOUSAND BAHT EXCEPT EARNINGS PER SHARE PRESENTED IN BAHT CONSOLIDATED THE COMPANY ONLY 2000 1999 2000 1999 REVENUES Income from medical treatment 324,211 316,270 324,211 316,270 Income from rental and services 14,230 11,421 5,400 3,900 Company's portion in net income of subsidiary company - - 548 1,211 Other income 10,058 12,097 9,797 11,860 Total Revenues 348,499 339,788 339,956 333,241 EXPENSES Cost of medical treatment 241,817 229,906 241,817 229,906 Selling and administrative expenses 63,401 55,703 55,276 49,888 Loss on exchange rate - 3,830 - 3,830 Interest expenses 28,445 34,738 28,445 34,738 Directors' remuneration (Note 8) 700 700 700 700 Total Expenses 334,363 324,877 326,238 319,062 INCOME BEFORE INCOME TAX 14,136 14,911 13,718 14,179 INCOME TAX EXPENSE 4,685 732 4,267 - NET INCOME 9,451 14,179 9,451 14,179 EARNINGS PER SHARE (BAHT) (Note 3.8) 0.26 0.39 0.26 0.39 - (The number of share capital 35,964,603 shares) Notes to the interim financial statements form an integral part of these statements. UNAUDITED REVIEWED VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED AND SUBSIDIARY STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE NINE - MONTH PERIODS ENDED SEPTEMBER 30, THOUSAND BAHT CONSOLIDATED THE COMPANY ONLY 2000 1999 2000 1999 Share capital Common stock 359,646 359,646 359,646 359,646 Paid-in capital Premium on share capital 434,233 434,233 434,233 434,233 Retained earnings (deficits) Appropriated Legal reserve 6,365 6,365 6,365 6,365 Unappropriated Beginning balance (7,598) (25,613) (7,598) (25,613) Increase during the period 9,451 14,179 9,451 14,179 Ending balance 1,853 (11,434) 1,853 (11,434) TOTAL SHAREHOLDERS' EQUITY 802,097 788,810 802,097 788,810 Notes to the interim financial statements form an integral part of these statements. UNAUDITED REVIEWED VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED AND SUBSIDIARY STATEMENTS OF CASH FLOWS FOR THE NINE - MONTH PERIODS ENDED SEPTEMBER 30, THOUSAND BAHT CONSOLIDATED THE COMPANY ONLY 2000 1999 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES NET INCOME 9,451 14,179 9,451 14,179 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED FROM (USED IN) OPERATION : Depreciation 27,988 27,522 27,254 26,854 Loss on disposal of fixed assets 17 1,158 17 1,158 Loss on exchange rates - 3,830 - 3,830 Company's portion in net income of subsidiary company - - (548) (1,211) Bad debt and allowance for doubtful accounts (162) 1,549 (531) 1,056 Loss on impaired assets - 697 - 697 INCOME FROM OPERATING ACTIVITIES BEFORE CHANGE IN OPERATING ASSETS AND LIABILITIES ITEMS 37,294 48,935 35,643 46,563 ( INCREASE ) DECREASE IN OPERATING ASSETS ITEMS Trade accounts receivable 1,272 5,938 1,085 6,549 Inventories 1,482 1,544 1,466 1,543 Other current assets 465 (3,795) (4,479) (2,525) Other assets 2,149 (2,013) 2,129 (1,865) INCREASE (DECREASE) IN OPERATING LIABILITIES ITEMS Trade accounts payable 1,742 (1,343) 1,742 (1,343) Other current liabilities (1,241) (7,631) 796 (8,703) Other liabilities 256 524 - - NET CASH PROVIDED FROM OPERATING ACTIVITIES 43,419 42,159 38,382 40,219 Notes to the interim financial statements form an integral part of these statements. UNAUDITED REVIEWED VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED AND SUBSIDIARY STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE NINE - MONTH PERIODS ENDED SEPTEMBER 30, THOUSAND BAHT CONSOLIDATED THE COMPANY ONLY 2000 1999 2000 1999 CASH FLOWS FROM INVESTING ACTIVITIES Decrease (increase) in short-term investments 3,112 (290) 3,112 (290) Purchase of property, plant and equipments (4,740) (4,996) (4,337) (4,545) Increase in investment in land (48,473) - (48,473) - (Increase) decrease in loans to related parties (950) 1,100 (950) 1,100 Proceeds from equipment disposal 43 105 43 105 NET CASH USED IN INVESTING ACTIVITIES (51,008) (4,081) (50,605) (3,630) CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in bank overdrafts and loans from financial institutions 16,414 (12,470) 16,414 (12,470) Repayment for financial lease payable (494) - (494) - Repayment for assets payable (1,337) - (1,337) - Repayment for long-term loans (14,366) (18,191) (14,366) (18,191) NET CASH PROVIDED FROM (USED IN) FINANCING ACTIVITIES 217 (30,661) 217 (30,661) NET INCREASE (DECREASE) IN CASH ON HAND AND AT BANKS (7,372) 7,417 (12,006) 5,928 CASH ON HAND AND AT BANKS AS AT JANUARY 1, 20,330 13,574 19,250 13,047 CASH ON HAND AND AT BANKS AS AT SEPTEMBER 30, 12,958 20,991 7,244 18,975 Notes to the interim financial statements form an integral part of these statements. UNAUDITED REVIEWED VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED AND SUBSIDIARY STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE NINE - MONTH PERIODS ENDED SEPTEMBER 30, THOUSAND BAHT CONSOLIDATED THE COMPANY ONLY 2000 1999 2000 1999 ADDITIONAL DISCLOSURE ITEMS TO CASH FLOWS STATEMENTS CASH PAID DURING THE PERIOD FOR : Interest expenses 30,434 37,412 30,434 37,412 Income tax expenses 3,741 1,969 3,377 1,799 NON-CASH FLOWS ITEMS: Increase in equipments from entering into financial lease agreement - 1,808 - 1,808 Increase in investment in land from deposit of land 102,297 - 102,297 - Convert short-term loans to long-term loans 81,990 - 81,990 - Notes to the interim financial statements form an integral part of these statements. VIBHAVADI MEDICAL CENTER PUBLIC COMPANY LIMITED AND SUBSIDIARY NOTES TO THE INTERIM FINANCIAL STATEMENTS SEPTEMBER 30, 2000 AND 1999 1. GENERAL INFORMATION Parent Company Subsidiary Company 1.1 Company status A juristic person established A juristic person established under Thai law and listed in the under Thai law. Stock Exchange of Thailand. 1.2 Company location 51/3 Moo 3, Ngam Wong Wan 51/3 Moo 3, Ngam Wong Road, Khet Chatuchak, Bangkok, Wan Road, Khet Chatuchak, 10900, Thailand. Bangkok, 10900, Thailand. 1.3 Type of business Hospital. Office building and apartment for rent 1.4 Number of employees as at September 30, 2000 Full time 594 persons and Full time 9 persons and Part time 171 persons Part time 7 persons as at December 31, 1999 Full time 582 persons and 10 persons Part time 183 persons 2. BASIS OF PREPARATION OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS 2.1 The consolidated interim financial statements included the financial statements of Vibhavadi Medical Center Public Company Limited and subsidiary as follows: % HOLDING Vibhavadi Mansion Company Limited 100 2.2 Vibhavadi Medical Center Public Company Limited invested in its subsidiary since the registration date at par value. -2- 2.3 Inter-company balances and transactions have been eliminated in the consolidation. 3. SIGNIFICANT ACCOUNTING POLICIES 3.1 Income and expenses recognition Revenues from medical treatment, rental and service revenues, and expenses are recognized on an accrual basis. 3.2 Allowance for doubtful accounts The Company provided allowance for doubtful accounts which are expected to be uncollectible. 3.3 Inventories Inventories are stated at cost or net realizable value, whichever is the lower by physical checking and determined by the First-in, First-out method. 3.4 Investments in subsidiary and related parties Investments in subsidiary are stated by equity method. Investments in related parties are stated by cost method. 3.5 Property, plant and equipments Property, plant and equipments are stated at cost. Depreciation for plant and equipments acquired before 1996 is calculated by the declining method as follows : Per annum Building 3.30% Medical instruments and office appliances 6.67% Vehicles 6.67% -3- Depreciaton for plant and equipments acquired since 1996 onwards, is calculated by the straight-line method as follows : Per annum Building and building equipments 3.30% Medical instruments 6.67% Furniture 10.00% Office appliances and equipments of rooms for rent 20.00% Vehicles 10.00% Equipments and health center appliances 20.00% The unused medical instruments and office appliances are stated at book value on the effect date after deduction the provision for the impairment of those assets. 3.6 Investment in land Investment in land is stated by cost method. 3.7 Foreign currency transactions Foreign currency transactions are recorded in Baht at the rate ruling on the date of transactions. Outstanding foreign currency assets and liabilities at the end of the accounting period are converted to Baht at the exchange rates of commercial bank in effect at that date. Gains or losses on translation are credited or charged to operation during the period. 3.8 Earnings per share Earning per share are calculated by dividing the net income by the number of issued and paid-up share capital at the end of the period. -4- 4. INVESTMENTS IN SUBSIDIARY AND RELATED PARTIES consist of: (THOUSAND BAHT) % Cost Equity Method Holding Method (for subsidiary only) As at As at As at As at As at As at September December September December September December 30, 2000 31, 1999 30, 2000 31, 1999 30, 2000 31, 1999 Subsidiary Company 1. Vibhavadi Mansion Co., Ltd. 100.00 100.00 250 250 1,264 716 Total Investments in Subsidiary Company 250 250 1,264 716 Related Parties 1. Chao Phya Hospital Co., Ltd. 5.44 5.44 46,408 46,408 46,408 46,408 2. Phattanakarn Vechakit Co., Ltd. 16.50 16.50 89,250 89,250 89,250 89,250 3. Supalerk U-Thong Hospital Co., Ltd. 6.00 6.00 3,000 3,000 3,000 3,000 4. Vibhavadi Consultant Co., Ltd. 10.00 10.00 75 75 75 75 5. Karnchanaburi Health Center Co., Ltd. 15.00 15.00 15,000 15,000 15,000 15,000 Total Investments in Related Parties 153,733 153,733 153,733 153,733 Grand Total Investments in Subsidiary and Related Parties 154,997 154,449 (THOUSAND BAHT) Type of Paid-up share capital Dividend Business Relationship As at As at As at As at September December September September 30, 2000 31, 1999 30, 2000 30, 1999 Subsidiary Company 1. Vibhavadi Mansion Co., Ltd. Apartment Common shareholders 250 250 - - for rent / directors Related parties 1. Chao Phya Hospital Co., Ltd. Hospital Intershareholders 440,000 440,000 - - / common directors 2. Phattanakarn Vechakit Co., Ltd. Hospital Common shareholders 600,000 600,000 - - / directors 3. Supalerk U-Thong Hospital Co., Ltd Hospital Common shareholders 50,000 50,000 - - / directors 4. Vibhavadi Consultant Co., Ltd. Consultant Common shareholders 750 750 - - / directors 5. Karnchanaburi Health Center Fitness Common shareholders 100,000 100,000 - - Co., Ltd. Center / directors -5- 5. LOANS TO RELATED PARTIES consist of the following : (THOUSAND BAHT) As at As at Condition September 30, December 31, 2000 1999 1. M.D.S. Enterprise Co., Ltd. 500 500 1. Promissory note at call 2. Interest rate at 4.00% per annum. 3. Interest payable at the end of every month 2. Supalerk U-Thong Hospital 4,900 4,900 1. Loan under loan agreement Co., Ltd. 2. In 1999, interest rate at MLR of TMB +1.5% per annum. In 2000, interest rate at MLR of TMB + 1% per annum. 3. Repayment within one year, commencing from the borrowing date. 4. Interest payable within the 5th of every month. 3. Phattanakarn Vechakit Co., Ltd. - Loan Contract 40,750 40,750 1. In 1999, interest rate at MLR of TMB +1.5% per annum. In 2000, interest rate at MLR of TMB + 1% per annum. 2. Grace period for principal repayment is 1 year. 3. Repayment period for total loan is 5 years. - Promissory Notes 30,950 30,000 1. Promissory note at call 2. Interest rate at borrowing rate + 1% per annum 3. Interest payable at the end of every month. Total Loans to Related Parties 77,100 76,150 -6- 6. DEPOSIT ON LAND AND INVESTMENT IN LAND On August 9, 1994, the Company signed an agreement to purchase and to sell the land with Phattanakarn Vechakit Co., Ltd. at total cost of Baht 204,595,000. A deposit of Baht 102,297,480 has been made on the date of signing the agreement with the commitment that such deposit is a partial cost of land. The remaining portion of Baht 102,297,520 shall be settled on the date the ownership title is transferred to the Company. Phattanakarn Vechakit Company Limited has hired Chesterton (Thai) Co., Ltd. to appraise the land, which the new appraised value of land in December 1997 is Baht 144 million due to the downturn of economy especially the real estate sector. On December 29, 1999, the Company made a memorandum of understanding annexed to the agreement to purchase and to sell the land with Phattanakarn Vechakit Co.,Ltd. with additional agreement that if the right on deposit is going to change for whatever reason, that change must be made not less than Baht 102,297,480 and at fair value. If the additional price of land is to be paid, it should not exceed the fair value of land (market price) less deposit upon the transferring right of land. On March 30, 2000, the Company purchased the land from Phattankarn Vechakit Co., Ltd. at the price of Baht 150 million and the Company paid additional amount for the remaining of Baht 47,702,520. The registration on transferring right of land was made on March 31, 2000. -7- 7. LONG - TERM LOANS consist of (THOUSAND BAHT) CONSOLIDATED THE COMPANY ONLY As at As at As at As at September 30, December 31, September 30, December 31, 2000 1999 2000 1999 Long-term loans Loans in Baht currency 346,332 357,072 346,332 357,072 Converted from short-term loans 78,364 - 78,364 - Total 424,696 357,072 424,696 357,072 Less Portion due within one year (51,723) (22,474) (51,723) (22,474) Net long-term loans 372,973 334,598 372,973 334,598 On June 30, 2000, the Company has made an agreement with the bank to change the repayment condition for short-term loans of Baht 82 million to the term of repayment principal within 6 years. The portion of long-term loans due within one year has been shown under current liabilities. 8. DIVIDENDS PAYMENT AND DIRECTORS' REMUNERATION On April 28, 2000, the Ordinary General Shareholders' Meeting of 2000 was held and approved not to pay dividends to the shareholders and appropriated to pay directors' remuneration of 1999 totalling Baht 700,000. On April 23, 1999, the Ordinary General Shareholders' Meeting of 1999 was held and approved not to pay dividends to the shareholders and appropriated to pay directors' remuneration of 1998 totalling Baht 700,000. -8- 9. FINANCIAL INFORMATION BY SEGMENT The Company and its subsidiary are engaged in the business of medical treatment and building for rent in one geographical area, Thailand. Revenues, income and total assets shown in the financial statements are related to the aforesaid industrial segment and geographical area. 10. CONTINGENT LIABILITIES AND COMMITMENT The Company and its subsidiary have commitments and contingent liabilities as at September 30, 2000 and December 31, 1999 as follows : (THOUSAND BAHT) CONSOLIDATED THE COMPANY ONLY As at As at As at As at September 30, December 31, September 30, December 31, 2000 1999 2000 1999 10.1 Commitment from the letters of guarantee issued by commercial bank 36 36 36 36 10.2 Commitment from the letters of guarantee issued by commercial bank for subsidiary company 2,529 2,529 2,529 2,529 10.3 Commitment from the letters of guarantee for loans amount of SGD 2.8 million for related parties 68,410 63,716 68,410 63,716 10.4 Commitment from the letters of guarantee for loans amount of USD 270,000 for related parties 11,439 10,182 11,439 10,182 -9- 11. TRANSACTIONS WITH RELATED PARTIES The Company has certain transactions with its related parties which are related through the shareholdings or having common shareholders and some directors. The effects of these transactions were reflected in the accompanying financial statements on the bases mutually determined by the parties concerned . The significant transactions with related parties for 2000 and 1999 are as follows : (THOUSAND BAHT) TRANSACTIONS IN BALANCE SHEETS As at As at September 30, December 31, 2000 1999 Loans to related parties (see Notes 5 and 12.2) 77,100 76,150 Purchase of land from related party (see Note 6) 150,000 - Deposit of land to purchase paid to related party (see Note 6) - 102,297 Interest receivable on loans to related parties (see Note 12.2) 12,806 13,580 (THOUSAND BAHT) TRANSACTIONS IN STATEMENTS OF INCOME September 30, September 30, FOR THE NINE-MONTH PERIODS 2000 1999 Interest income from loans to related parties 5,424 7,279 The Company has other related transactions with subsidiary company which are eliminated in the consolidation as follows : The Company has lent some part of Vibhavadi building 2 to its subsidiary for others renting as an office and service apartment with the term of 3 years since August 1, 1995 to July 31, 1998. In case that the lease agreement is expired and no renewal agreement is made, it is assumed that the agreement is renewable according to the old -10- condition for further 3 years with the compensation of Baht 100,000 per month per floor which are fully occupied. In 1999, the Company changed the rent agreement by fixing monthly rental to be Baht 1,200,000, commencing from October to December 1999, and in 2000, the monthly rental is Baht 600,000, commencing from January 2000, onward. The Company has to pay for electricity and water supply of Vibhavadi building 2 for the actual consumption of the Company to the subsidiary company at cost without making profit. 12. THE QUALITY OF ASSETS as at September 30, 2000 and December 31, 1999 are as follows : 12.1 Trade accounts receivable Trade accounts receivable which have financial difficulties in settlement debts in the consolidation and financial statements of the Company are classified by outstanding balances of aging as follows : (THOUSAND BAHT) Consolidated The Company only As at As at As at As at September 30, December 31, September 30, December 31, 2000 1999 2000 1999 Over 3 to 6 months 3,026 3,835 2,841 3,437 Over 6 to 12 months 2,051 1,208 2,024 690 Over 12 months 10,406 11,158 8,221 9,342 Total 15,483 16,201 13,086 13,469 Allowance for doubtful accounts 10,406 11,158 8,221 9,342 -11- 12.2 Loans to related parties and interest receivable Loans to related parties, see also Note 5. Interest receivable incurred from loans to related parties consist of : As at September 30, 2000 (THOUSAND BAHT) Interest receivable Under 3 Over 3 to Over 6 to Over 12 Total months 6 months 12 months months 1. Phattanakarn Vechakit Co., Ltd. 1,817 1,801 3,780 5,316 12,714 2. Supalerk U-Thong Hospital Co., Ltd. 41 - - - 41 3. M.D.S. Enterprise Co., Ltd. 5 5 12 29 51 Total 1,863 1,806 3,792 5,345 12,806 As at December 31, 1999 (THOUSAND BAHT) Interest receivable Under 3 Over 3 to Over 6 to Over 12 Total months 6 months 12 months months 1. Phattanakarn Vechakit Co., Ltd. 1,928 2,092 4,600 4,876 13,496 2. Supalerk U-Thong Hospital Co., Ltd. 48 - - - 48 3. M.D.S. Enterprise Co., Ltd. 20 7 9 - 36 Total 1,996 2,099 4,609 4,876 13,580 The Company did not provide any allowance for doubtful accounts for such loans and interest receivable because they are related parties and full settlement is expected to be made. 13. LEGAL CASE As at September 30, 2000, the Company has legal case of claiming about land trespassing, driving out with the disputant and the latter has filed the law-suit under the same case. Currently, such case remains pending in the court.