10-Q 1 king10q063002.txt FORM 10-Q -------------------------------------------------------------------------------- For the quarterly period ended June 30, 2002 (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES ----- EXCHANGE ACT 0F 1934 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ----- EXCHANGE ACT OF 1934 For the transition period from ___________to ___________ -------------------------------------------------------------------------------- Commission File Number: 1-13205 KING POWER INTERNATIONAL GROUP CO., LTD. (Exact name of registrant as specified in its charter) Nevada 75-2641513 ------ ---------- (State of incorporation) (IRS Employer ID number) 25th-27th Floor, Siam Tower, 989 Rama 1 Road, Patumwan, Bangkok 10330 Thailand ------------------------------------------------------------------------------ (Address of principal executive offices) 011 (662) 658-0090 ------------------ (Registrant's telephone number, including area code) -------------------------------------------------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the proceeding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: August 9, 2002: 20,250,000 1 KING POWER INTERNATIONAL GROUP CO., LTD. Form 10-Q for the Quarterly ended June 30, 2002 Table of Contents Page Part I - Financial Information Item 1 Financial statements 3 Item 2 Management's Discussion and Analysis or Plan of Operation 25 Part II - Other Information Item 1 Legal Proceeding 30 Item 2 Changes in Securities 31 Item 3 Defaults Upon Senior Securities 31 Item 4 Submission of Matters to a Vote of Securities Holders 31 Item 5 Other Information 31 Item 6 Exhibits and Reports on Form 8-K 31 2 Independent Accountants' Review Report The Board of Directors and Shareholders King Power International Group Co., Ltd. and Subsidiaries We have reviewed the consolidated balance sheet of King Power International Group Co., Ltd. and Subsidiaries (a Nevada Corporation) as of June 30, 2002 and 2001, and the related consolidated statements of operations, shareholders' equity and cash flows for the three months and six months then ended, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of King Power International Group Co., Ltd. and Subsidiaries A review consists principally of inquiries of Company 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 review, 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 principals. SMITH, GRAY, BOYER & DANIELL A Professional Limited Liability Company Dallas, Texas August 9, 2002 3

The accompanying notes are an integral part of these consolidated financial statements See Accountants' Review Report 5

The accompanying notes are an integral part of these consolidated financial statements See Accountants' Review Report 6

The accompanying notes are an integral part of these consolidated financial statements See Accountants' Review Report 7

The accompanying notes are an integral part of these consolidated financial statements See Accountants' Review Report 8

The accompanying notes are an integral part of these consolidated financial statements See Accountants' Review Report 9

The accompanying notes are an integral part of these consolidated financial statements See Accountants' Review Report 11 KING POWER INTERNATIONAL GROUP CO., LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTERS ENDED JUNE 30, 2002 AND 2001 See Accountants' Review Report 1. BASIS OF PRESENTATION King Power International Group Co., Ltd. (formerly Immune America, Inc.) (here in the "Company") was incorporated under the laws of the State of Nevada on July 30, 1985. On June 12, 1997, the Company exchanged 18,800,000 shares of its common stock for 99.94% of the issued and outstanding common shares of King Power Tax Free Company Limited [(formerly J.M.T. Group Company Limited)-KPT thereafter] and 95% of the issued and outstanding common shares of King Power Duty Free Company Limited [(formerly J.M.T. Duty Free Company Limited)-KPD thereafter]. This exchange of the Company's common stock to the former KPT and KPD shareholders resulted in those former shareholders obtaining a majority voting interest in the Company. Generally accepted accounting principles require that the company whose stockholders retain the majority interest in a combined business be treated as the acquirer for accounting purposes. Consequently, this transaction was accounted for as a "reverse acquisition" for financial reporting purposes and KPT and KPD were deemed to have acquired 94% of equity interest in the Company as of the date of acquisition. The relevant acquisition process utilized the capital structure of Immune America, Inc., and the assets and liabilities of KPT and KPD were recorded at historical cost. Concurrent with the reverse acquisition, the Company changed its corporate name from Immune America, Inc. to King Power International Group Co., Ltd. KPD is a Thailand-based corporation engaged in selling duty free merchandise to the traveling public under the supervision of Thai customs, in stores located in the international terminals of the various airports located in Thailand. KPD holds from the Airports Authority of Thailand, an exclusive license to operate duty free stores for all stores of this specific nature. Prior to January 1, 2002, KPD held a non-exclusive license to operate duty free stores of this specific nature (see Note 7). For the duty free store operation, KPD is exempt from input value added tax on purchases of import merchandise and from output value added tax on sales of merchandise. KPT is a Thailand-based corporation engaged in selling various souvenirs and consumer products to the general public in the international and domestic terminals of the various airports located throughout Thailand. KPT holds the operating license granted by the Airports Authority of Thailand for all shops of this specific nature. For the tax free operation, KPT is subject to input value added tax on purchases of merchandise and is exempt from output value added tax on sales of merchandise for shops within Bangkok International Airport's departure halls. On October 10, 1997, the Company acquired 4,900 shares of common stock in King Power International Group (Thailand) Company Limited (KPG Thai), equivalent to 49% of the registered capital. KPG Thai was established in Thailand on September 11, 1997, and has registered capital totaling Baht 1 million divided into 10,000 shares of common stock with Baht 100 per share. On the same date, KPT acquired 5,093 shares of common stock in KPG Thai, equivalent to 50.93% of the registered capital. Ultimately, the Company owns 99.93% of equity interest in KPG Thai. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - The consolidated financial statements, which include the accounts of the Company and its subsidiaries, are prepared in accordance with accounting principles generally accepted in the United States of America. All significant intercompany accounts and transactions have been eliminated in consolidation. Investments in other companies under 20% of interest are accounted for using the cost method. At December 31, 2001 and 2000, these investments have been written down due to an assumed permanent impairment of their value. The consolidated financial statements are presented in U.S. dollars. Cash and Cash Equivalents - The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Merchandise Inventories - Merchandise inventories are stated at the lower of cost or market. Cost is determined on a weighted average basis. Provision for Doubtful Accounts - Estimated collection losses of the Company are provided for based on the Company's collection experience together with a review of the financial position of each debtor. Where the Company determines reserves are necessary, it will provide a provision for the total receivable and accrued interest outstanding. 12 KING POWER INTERNATIONAL GROUP CO., LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FOR THE QUARTERS ENDED JUNE 30, 2002 AND 2001 See Accountants' Review Report Marketable Securities - Securities held for trading are marked to market at year-end with the resulting gain or loss being included in current income. Foreign Currency Translation and Transactions - The financial position and results of operations of the Company's foreign subsidiaries are determined using the local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the prevailing exchange rates in effect at each period end. Contributed capital accounts are translated using the historical rate of exchange when capital was injected. Income statement accounts are translated at the average rate of exchange during the year. Translation adjustments arising from the use of different exchange rates from period to period are included in the cumulative translation adjustment account in shareholders' equity. Gains and losses resulting from foreign currency transactions are included in operations. Gains or losses on foreign exchange transactions are recognized as incurred in the consolidated statements of income. Differences between the forward rate and the spot rate in forward exchange contracts are amortized as revenue and expense over the period of the contract. The exchange rates at June 30, 2002 and December 31, 2001 were $1= Baht 41.558 and Baht 44.227, respectively. The average exchange rates for the six months ended June 30, 2002 and 2001 were $1= Baht 43.2317, Baht 44.2589, respectively. Property, Plant and Equipment - Property, plant and equipment are stated at cost. Depreciation is computed by using the straight-line method over the estimated useful lives of the assets as follows: Buildings 20 Years Leasehold improvements Term of lease Selling office equipment and fixtures 5 Years Vehicles 5 Years Maintenance, repairs and minor renewals are charged directly to expense as incurred. Store Pre-Opening Costs - Store pre-opening costs are expensed as incurred. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Revenue Recognition - The Company recognizes revenue from sales of merchandise at the point of sale. Concession Fees - According to the concession agreement with the Airports Authority of Thailand, KPT is required to pay concession fees, rental and services fees, and other related expenses at the fixed charges per month defined in the concession agreement. According to the concession agreement with the Airports Authority of Thailand, KPD is required to pay concession fees at a fixed percentage of sales, greater than or equal to the fixed charges as defined in the concession agreement, and pay rental and service fee and other related expenses. Concentrations of Credit Risk - The Company's retail businesses are cash flow businesses. Most sales take place with cash receipts or credit card payments. The Company maintains its cash accounts with various financial institutions. In Thailand, such accounts are insured for the full amount of their value by the Thai government. U.S. bank deposits are within Federal insurance limits. In addition, see Note 11 with respect to loans and advances to directors and affiliated companies. 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 fluctuate with market interest rates. Income Taxes - The Company accounts for income taxes using the liability method, which requires an entity to recognize the deferred tax liabilities and assets. Deferred income taxes are recognized based on the differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, that will result in taxable or deductible amounts in future years. Further, the effects of enacted tax laws or rate changes are included as part of deferred tax expense or benefits in the period that covers the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized. 13 KING POWER INTERNATIONAL GROUP CO., LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FOR THE QUARTERS ENDED JUNE 30, 2002 AND 2001 See Accountants' Review Report The Company does not provide for United States income taxes on unlimited earnings of its Thailand-based subsidiaries since the Company's intention is to reinvest these earnings in their operations. Earnings Per Share - Basic earnings per share has been computed based on the average number of common shares outstanding for the period. There are no potentially dilutive securities outstanding. Reclassification - Certain amounts in the 2001 financial statements and related footnotes have been reclassified to conform with 2002 presentation. 3. RESTRICTED FIXED DEPOSITS June 30, 2002 December 31, 2001 --------------- ----------------- Restricted fixed deposits $ 17,108,792 $ 11,650,467 Interest rates 0.75%-3.50% 1.00%-4.00% As of June 30, 2002 and December 31, 2001, the restricted fixed deposits with maturities from three to twelve months were pledged as collateral to a commercial bank for bank credit facilities of subsidiaries. As these are current obligations of the Company, the deposits are shown as current assets. 4. REFUNDABLE VALUE ADDED TAX For Thailand-based subsidiaries, refundable value added tax (VAT) represents, on a cumulative basis, the excess of input tax (charged by suppliers on purchases of merchandise and services) over the output tax (charged to customers on sales of merchandise and services). Value added tax is levied on the value added at each stage of production and distribution, including servicing, generally at the rate of 10% effective August 16, 1997. The Minister of Finance, however, declared a new value added tax at the rate 7% commencing April 1, 1999, in order to stimulate the domestic economy. 5. PROPERTY, PLANT AND EQUIPMENT, NET June 30, 2002 December 31, 2001 ----------------- ----------------- Land $ 632,369 $ 594,207 Building 395,740 116,844 Leasehold improvements 6,082,438 4,627,983 Office equipment and fixtures 3,389,605 2,663,704 Vehicles 1,000,226 788,678 Work in progress 248,881 338,498 ----------------- ----------------- Total cost 11,749,259 9,129,914 Less: accumulated depreciation (6,445,703) (5,410,438) ----------------- ----------------- Net book value $ 5,303,556 $ 3,719,476 ================= ================= 6. BANK OVERDRAFT AND LOANS FROM BANKS June 30, 2002 December 31, 2001 ----------------- ----------------- Bank overdraft $ -- $ 597,861 Trust receipts 22,411,755 13,955,530 Short-term loan 5,534,434 7,009,293 ----------------- ----------------- $ 27,946,189 $ 21,562,684 ================= ================= 14

As of June 30, 2002 and December 31, 2001, land and building are pledged as collateral for credit lines, trust receipts, and a long-term loan from a bank. (Notes 6 and 8) 15

On March 20, 2001, the Airports Authority of Thailand awarded the Company a contract, beginning January 1, 2002, to operate the duty free retail space of other operator. 8. LONG-TERM LOANS, NET Long-term liabilities as of June 30, 2002 and December 31, 2001 consist of the following: June 30, 2002 December 31, 2001 ----------------- ----------------- Long-term loans $ 573,461 $ 168,861 Installment purchase payable 1,983 4,659 ----------------- ----------------- 575,444 173,520 Less: current portion of long-term debt (427,561) (33,275) ----------------- ----------------- Total $ 147,883 $ 140,245 ================= ================= As of June 30, 2002 and December 31, 2001, long-term loans consist of loans from banks carrying interest rates of 7.00% - 7.25% per annum,The long-term loans are secured by the Company's land and building and guaranteed by a director of the Company. (See Note 5) 16

18 KING POWER INTERNATIONAL GROUP CO., LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FOR THE QUARTERS ENDED JUNE 30, 2002 AND 2001 See Accountants' Review Report As a result, the effective income tax rate for the subsidiaries is different from the standard income tax rate. The following reconciliation shows the differences between the effective and standard rates. For six months ended June 30, 2002 2001 ----------- ----------- Standard income tax rate 35.00% 35.00% Foreign tax rate difference (5.20%) (5.28%) Less: valuation allowance 1.38% 1.95% ----------- ----------- Effective income tax rate 31.18% 31.67% =========== =========== As of June 30, 2002, and December 31, 2001, the Company has deferred income tax assets relating to net operating loss carry forwards for income tax purposes of $194,476 and $21,081, respectively, that expire in years 2001 through 2004. A valuation allowance on the United States loss carry forward has been provided, as the Company has determined that it is more likely than not that this deferred income tax asset will not be realized. 19

Additionally, the Airports Authority of Thailand owns 5% of KPD common shares. As of June 30, 2002, and December 31, 2001, KPD has accrued concession fees amounting to $3,698,078 and $2,737,366, respectively. 21 KING POWER INTERNATIONAL GROUP CO., LTD AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) FOR THE QUARTERS ENDED JUNE 30, 2002 AND 2001 See Accountants' Review Report Effective July 1, 2001, KPD and KPT increased the interest rate charged for new loans to related companies from a range of 2%-2.50% to 8.45%, reflecting the increase in borrowing costs to KPD and KPT. The new rates apply to total loans outstanding of each related company that borrowed additional funds from KPD or KPT during 2001 and 2002. For related companies that did not require additional loans from KPD and KPT, the interest rate charged to them did not change. The Company had operating transactions with related parties and directors as follows (in $000s): For the six months ended June 30, 2002 2001 ------------ ------------ Related Companies Sales $ 389 $ 381 Interest income 648 92 Management fee income 262 -- Purchases 4,142 689 Concession fees 11,229 6,639 Purchases - assets 9 -- Service $ 191 $ -- 12. COMMITMENTS AND CONTINGENT LIABILITIES (see Note 7) Lease commitments As of June 30, 2002, KPD and KPT had leasing commitments for office space under non-cancelable operating lease agreements in excess of one year. The obligations of the subsidiary companies under these lease agreements are set forth as follows: KPT KPD --------- --------- 2002 $ 25,988 $ 211,167 2003 51,976 362,943 2004 12,994 -- Thereafter $ -- $ -- Letters of guarantee As of June 30, 2002, and December 31, 2001, KPT and KPD were contingently liable for bank guarantees totaling $17.75 million and $16.95 million, respectively, issued in favor of the Excise Department and the Airports Authority of Thailand as a performance bond. Unused letters of credit As of June 30, 2002, and December 31, 2001, KPD and KPT have unused letters of credit totaling $1.41 million and $7.99 million, respectively. Land Acquisition On June 17, 2002, KPD contracted to acquire two tracts of land for a total price of 311.34 million Baht ($7,491,698 at June 30, 2002, exchange rates), of which 80.63 million Baht ($1,940,277) has been paid directly to the seller or deposited with KPD's agent for payment in September and is included in Investments and Other Assets in the accompanying balance sheet. Under the terms of the contract, KPD will owe the balance of 39.6 million Baht ($952,885 at June 30, 2002 exchange rates) on the first tract on December 14, 2002. The balance of 191.11 million Baht ($4,598,731 at June 30, 2002 exchange rates) due on the second tract is payable 21.23 million Baht ($510,950) on October 14, 2002, and 169.88 million Baht ($4,087,781) between the first and second anniversaries of the contract, respectively. 22

24 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS (1) Caution Regarding Forward-Looking Information This quarter report contains certain forward-looking statements and information relating to the Company that is based on the beliefs of the Company or management as well as assumptions made by and information currently available to the Company or management. When used in this document, the words "anticipate", "believe", "estimate", "expect", and "intend" and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. Such statements reflect the current view of the Company regarding future events and are subject to certain risks, uncertainties and assumptions, including the risks and uncertainties noted. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. In each instance, forward-looking information should be considered in light of the accompanying meaningful cautionary statements herein. (2) Effects on the Change in Foreign Currency Exchange System On July 2, 1997, the Thai Government announced that the Thai Baht would thereafter be converted to a "Managed Float" system for the relationship of the Baht to other international currencies. This change had an immediate impact on the Company's operations and the results of its operations. The Company's subsidiaries conduct their business with selling and purchase prices based on Thai Baht, US Dollars, and other currencies. Sales are made both in Thai Baht and other currencies, but eventually will be converted into Thai Baht. Accordingly, the Company bears foreign currency transaction risks between the date of purchase of goods for resale and the ultimate payment of the goods in the appropriate negotiated currency. The overall effect of the Thai Baht devaluation was an increase in the attractiveness of Thailand as a tourist destination. This increase in tourists had a direct impact on increasing the Company's sales in the post-devaluation time period. In accordance with generally accepted accounting principles, the Company has separately presented the following items in its statement of income for the quarter ended June 30, 2002: Loss on foreign exchange, net $(50,009) The calculation of loss on foreign exchange, net of $(50,009) is shown in charts labeled A and B, respectively. 25

(3) Results of operations, comparing six months ended June 30, 2002 and 2001 Sales revenue for the six months ended June 30, 2002, was approximately $84.3 million compared to approximately $57.9 million for 2001. This increase is directly attributable to the Company's ability to obtain additional space from the AAT to operate the Duty Free business throughout international airports in Thailand, starting from January 1, 2002. Furthermore, according to the statistical compilation provided by the Bangkok International Airport, the number of international passengers traveling through its premises from January to June, 2002 has increased 4.36% from the same period last year. The cost of merchandise sold for the six months ended June 31, 2002 and 2001, was approximately $40.5 million and $28.1 million, respectively. The principal factor causing this increase is directly related to the increase in merchandise sold. The ratio of the concession fees paid to the AAT, comparing the six months ended June 30, 2002, to the same period in 2001, increased from 18.87% in 2001 to 18.88% in 2002. This slight increase is due to concession fee structure of KPT is being based on fixed amount with additional annual increment. The volume of sales generated from KPT for the six months ended June 30, 2002 has not kept up with such increment thus caused the increase in the ratio of the concession fees paid to the AAT. However, due to the increase in sales volume generated from the KPD's operation, such percentage increase of concession fee has been kept at minimal. Management anticipates that possible reduction in the ratio of these fees may result from the continuing increase in sales volume generated from the KPD's operation. Selling and administrative expenses were approximately $14.0 million for the six months ended June 30, 2002, and approximately $14.8 million for the same period in 2001. In terms of percentage of sales, 2002 expenses were approximately 16.60% of sales and 2001 expenses were approximately 25.50% of sales. This decrease is associated with decrease in sales promotional campaign which are in-line with Management's expectation as the competition has been lessen due to the Company's ability to expand the shopping space at the international airports in Thailand. Net income for the six months ended June 30, 2002, was approximately $9.2 million, or $0.46 per share (basic), and approximately $2.6 million, or $0.13 per share (basic), for the six months ended June 30, 2001. 28 The ratio of inventory divided by revenue for the six months ended June 30, 2002 and 2001, was approximately 41.64% and 35.47%, respectively. This increase is caused by the larger volume of merchandised orders required by the Company's suppliers for their financial viability to support the new and improved lines of products developed and initiated by the Company. (4) Results of operations, comparing three months ended June 30, 2002 and 2001 Sales revenue for the three months ended June 30, 2002 was approximately $39.8 million compared to approximately $26.3 million for 2001. This increase is directly attributable to the Company's ability to obtain additional space from the AAT to operate the Duty Free business throughout international airports in Thailand, starting from January 1, 2002. Furthermore, according to the statistical compilation provided by the Bangkok International Airport, the number of international passengers traveling through its premises from April to June, 2002 has increased 4.28% from the same period last year. The cost of merchandise sold for the three months ended June 30, 2002, and 2001, was approximately $19.7 million and $12.3 million, respectively. The principal factor causing this increase is directly related to the increase in merchandise sold. The ratio of the concession fees paid to the AAT, comparing the three months ended June 30, 2002, to the same period in 2001, reduced from 19.69% in 2001 to 18.98% in 2002. This decrease is due to concession fee structure of KPT is being based on fixed amount. Management anticipates that a further reduction in the ratio of these fees may result from the increase in sales volume generated from the upcoming high seasons during the last half of the year. Selling and administrative expenses were approximately $7.4 million for the three months ended June 30, 2002, and approximately $7.8 million for the same period in 2001. In terms of percentage of sales, 2002 expenses were approximately 18.53% of sales and 2001 expenses were approximately 29.52% of sales. This decrease is associated with decrease in sales promotional campaign which are in-line with Management's expectation as the competition has been lessen due to the Company's ability to expand the shopping space at the international airports in Thailand. Net income for the three months ended June 30, 2002, was approximately $3.2 million, or $0.16 per share (basic), and approximately $0.6 million, or $0.03 per share (basic), for the three months ended June 30, 2001. (5) Liquidity and Capital Resources For the quarter ended June 30, 2002, and the year ended December 31, 2001, the Company had working capital of approximately $15.6 million and $5.1 million, respectively. The improvement of this figure is due to the Company's ability to expand operations and to generate increased sales, thereby increasing current assets. Management anticipates that the current positive trend will continue as sales continue to grow and operations are stabilized. 29 (6) Monetary Assets and Liabilities Denominated in Thai Baht As of June 30, 2002, the amount of monetary assets and liabilities which are denominated in Thai Baht are as follows: TYPE OF MONETARY ASSET US DOLLARS Cash and equivalents 2,018,813 Trade Accounts Receivable 890,979 Refundable value-added-tax 1,025,683 Advance to related companies 10,177,688 Deferred income tax assets 3,863,889 Restricted deposit 17,108,791 Other current assets 3,592,626 Other non-current assets 226,224 TYPE OF MONETARY LIABILITY US DOLLARS Bank overdraft & loan 26,657,770 Current portion of long-term debt 427,561 Accounts Payable 8,072,329 Concession fees 3,698,582 Other current liabilities 6,845,052 Long-term loan - net 147,883 (7) Recently Issued Accounting Principles New Accounting Standards Not Yet Adopted - NONE Part II - Other Information Item 1 - Legal Proceedings None Item 2 - Changes in Securities None Item 3 - Defaults Upon Senior Securities None Item 4 - Submission of Matters to a Vote of Security Holders The Company held its Annual Meeting of Shareholders on June, 2002. 30 The following seven persons were elected as Directors to serve for a year. NAME VOTES FOR VOTES AGAINST Vichai Raksriaksorn 19,523,506 112 Viratana Suntaranond 19,523,506 112 Aimon Boonkhundha 19,523,506 112 Suwan Panyapas 19,523,506 112 Dharmnoon Prachuabmoh 19,523,506 112 Chulchit Bunyaketu 19,523,506 112 Preeyaporn Thavornun 19,523,506 112 Item 5 - Other Information None Item 6 - Exhibits and Reports on Form 8-K None 31 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned who are duly authorized. KING POWER INTERNATIONAL GROUP CO., LTD. By: /s/ Vichai Raksriaksorn ---------------------------------------------------------- Vichai Raksriaksorn, President and Chief Executive Officer August 9th, 2002 By: /s/ Viratana Suntaranond ---------------------------------------------------------- Viratana Suntaranond, Chief Financial Officer August 9th, 2002 32

KING POWER INTERNATIONAL GROUP CO LTD 10-Q