SET Announcements

NOTE 7 - SUPPLIES FOR CONSTRUCTION AND CONSTRUCTION IN PROGRESS As at December 31, supplies for construction and construction in progress comprise of: Amounts : Baht Consolidated CH. Karnchang Co., Ltd. 1998 1997 1998 1997 Supplies for construction 136,252,237 114,707,544 20,422,485 39,839,300 Supplies in process 61,809,883 - - - Construction in progress 197,696,048 82,672,621 - 24,166,927 Goods in transit 8,973,078 - - - 404,731,246 197,380,165 20,422,485 64,006,227 Work in progress was the additional work extended from main construction contract such as bridge, junction with the main contract work which the joint venture is in process of submit its valuation of work and expected to have repayment in the future. NOTE 8 ADVANCE TO SUBCONTRACTOR As at December 31, 1998 a joint venture which the company has 25% of profit sharing has outstanding balance of advance payment to an affiliate company in amount of USD 1.62 million although the joint venture expected to submit the total work value within February 1999 because the said affiliate company delayed on shipping its supplies to joint venture. NOTE 9 OTHER CURRENT ASSETS As at December 31, 1998, other current assets included receivable from Revenue Department to the joint venture which the company has profit sharing of 50% incurred from Value Added Tax deduction in the future. The joint venture will change to be refund its Value Added Tax in cash when its project has been completed. As at December 31, 1998, other current assets included the other receivables of the joint venture which the company has 35% of profit sharing was incurred by an advance payment to a subcontractor in order to solve the problem of reiterate work. Therefore changing some contract price of joint venture because of the work performance of subcontractor, resulted to the Expressway and Rapid Transit Authority of Thailand will take responsibility for this transferring of work resulting from a contract price change. Since the approval of reimbursement for contract price change is in the process and the subcontractor has partly completed its construction , the joint venture reimbursed advance to the subcontractor included in the consolidate financial statements in the approximate amount of Baht 15.4 million. NOTE 10 - NOTE RECEIVABLE - FINANCE COMPANIES In 1998 and 1997, promissory notes from finance companies in the amount of Baht 42,117,187 and Baht 147,821,517, respectively, were formally promissory notes from finance companies which Bank of Thailand has suspended operations and it can not redeem 5 years before due date under the conditions prescribed by the Ministry of Finance. NOTE 11 - INVESTMENTS IN SUBSIDIARIES, ASSOCIATED, RELATED, OTHER COMPANIES AND JOINT VENTURES As at December 31, investments in subsidiary companies and joint ventures comprise: (Amounts : Baht) Percentage Holding by Parent Company Dividend Business or Percentage of profit sharing Cost method Equity method or profit sharing Classification Relationship (Amounts : Baht) in Joint Ventures 1998 1998 1997 payment Subsidiaries - CH. Karnchang Real Estate Co., Ltd. and Partnerships Limited 99 158,400,000 280,632,142 281,467,315 - Investment and construction Co- director - Bangkok Metro Co., Ltd. 79.94 799,400 - - - Public Utility Consession Co- director - CH. Karnchang-Tokyu Construction Co., Ltd. and Joint Ventures 55 55,000,000 183,239,957 165,278,184 - Construction Co- director Equity in Joint Ventures - Joint Venture CH. Karnchang Public Co., Ltd. Tokyu Construction Co., Ltd. in joint venture with CH. Karncahng - Tokyu Construction Co., Ltd. Highway Project 60 2,079,745 42,581,338 52,200,000 Construction Co-director Expressway Project 40 479,919 48,499,041 49,200,000 - Joint Venture CH. Karnchang Public Co., Ltd. Bilfinger + Berger Bauaktiengesellschaft Tokyu Construction Co., Ltd. and CH. Karnchang - Tokyu Construction Co., Ltd. Second Stage Expressway Project Sector B Route Phayathai Bangkhlo 53.20 73,420,099 279,522,415 198,900,000 Construction Co-director (Amounts : Baht) Percentage Holding by Parent Company Dividend Business or Percentage of profit sharing Cost method Equity method or profit sharing Classification Relationship (Amounts : Baht) in Joint Ventures 1998 1998 1997 payment - Second Stage Expressway Project Sector C+ Route Chaeng Watthana - Bang Phun & Bang Sai 59.99 - 632,579,837 318,526,732 - - Second Stage Expressway Project Sector D Route Asoke Srinakarin 59.99 - 14,200,548 3,637,008 - - Second Stage Expressway Project Sector C1A Route Ngam Wong wan - Chaeng Wattana 59.99 - 14,826,104 15,184,873 - - Joint Venture TWCK (Thames Water International (Thailand) Ltd. and CH. Karnchang Public Co., Ltd. 50 - 89,529,838 113,785,787 72,000,000 Construction Co-director Total Investment in subsidiaries and joint venture 214,199,400 1,290,988,189 1,268,482,693 372,300,000 As at December 31, investment in associated, related and other companies comprise: Percentage Holding Consolidated CH. Karnchange Public Co., Ltd. Dividend Business by Parent Company Amount Amount or profit sharing classification Relationship (Amounts : Baht) 1998 1997 1998 1997 payment Investment in Related Companies - Pathumthani Water Company Ltd. 15.00 149,449,978 102,940,000 149,449,978 102,940,0000 - Public Utility Concession Investment - Bangkok Expressway Public Co., Ltd. 13.81 2,133,070,087 2,628,596,027 1,992,631,048 2,488,156,989 - Public Utility Concession Investment Investment in Other Companies - Nava Finance and Securities Public Co., Ltd. - 27,291,095 113,569,500 27,291,095 113,569,500 - Financial Institutions None - Bangkok Tokyu Department Store Co.,Ltd - 2,280,000 - - - - Department Store None - Kruasakul Co., Ltd. 10.14 43,750,000 43,750,000 43,750,000 43,750,000 - Real Estate Development None - Tokyu Merchandise Development Co., Ltd. - - 15,000,000 - - - DepartmentStore None - Tokyu Department Store (Thailand) Co.,Ltd. - - 2,100,000 - 600,000 - DepartmentStore None - The Bangkok Club Co., Ltd. 0.57 3,000,000 3,000,000 3,000,000 3,000,000 - Entertainment None - Chanthaburi Country Club Co., Ltd. 0.25 2,000,000 2,000,000 2,000,000 2,000,000 - Real Estate Development None Total Investments 2,360,841,160 2,910,955,527 2,218,122,121 2,754,016,489 Less Allowance for devaluation of investments (27,291,095) (17,100,000) (27,291,095) (600,000) - Total Investment - Net 2,333,550,065 2,893,855,527 2,190,831,026 2,753,416,489 Allowance for Devaluation of Investments 1. As at December 31, 1998 and 1997, investment in Bangkok Expressway Public Company Limited. The parent company invested in the said company in the approximate amount of Baht1,992.6 million and Baht 2,488.15 million, respectively. This investment was valued at market price in approximate amount of Baht 3,483.3 million and Baht 3,232.1 million, respectively. Subsidiary company had this investment in the approximate amount of Baht 140.4 million, carried a market value in approximate amount of Baht 343.8 million and Baht 255.5 million, respectively. 2. As at December 31, 1998, investment in Nava Finance and Securities Public Co.,Ltd., in approximate amount of Baht 27.3 million, there was no market price at the ended of the year. According to the report of Office of the Auditor General on the financial statements for the nine-month periods ended September 30, 1998, they reported with qualifications regarding the allowance for doubtful debt or compare to the amount set by Bank of Thailands regulation and going concern of the company which depends on the rehabilitation plan. Since Bank of Thailand has instruction to the company dated May 17, 1998 to devalue its share capital from Baht 10.00 to Baht 0.01 par value and then increase the capital and change the board of directors. In addition, the Financial Institutions Rehabilitation Fund subscribed the additional capital and it also merged by transferring assets and liabilities according to the report dated November 12, 1998, the company therefore considered to set up the allowance for devaluation of the mentioned securities and presented the loss in the statement of income. As at December 31, 1997, this investment is in the amount of Baht 113.6 million at cost (The market value is in approximate amount of Baht 11.6 million.) the value of investment was not devalued due to the total market value was higher than the total cost. 3. As at December 31, 1997, investments in Tokyu Merchandise Development Co., Ltd. and Tokyu Department Store (Thailand) Co., Ltd., totalling cost in approximate amount of Baht 17.1 million, as at July 31, 1996, had a deficit greater than the amount of issued share capital. The company has considered to set up allowance for devaluation of the said investment. In the forth quarter of 1998, the company sold its investment in both companies to Tokyu Department Store (Japan) Co.,Ltd. at cost. Selling Investments In 1998, according to the minute of the executive board of directors meeting, no 1/1998 held on 15 January 1998, a resolution approved by the directors in 1998, the minute of the executive board of directors meeting no 4/1998 held on August 20, 1998 and no 5/1998 held on October 20, 1998 , the managements resolution were pass to sell a portion of their investments in Bangkok Expressway Public Company Limited and Nava Finance and Securities Public Co.,Ltd. In 1998, profit from selling of investment in the approximate amount of Baht 152 million was presented net off loss from selling of investment in Nava Finance and Securities Public Co., Ltd. in the amount of Baht 75.1 million. Pledged Investment As at December 31, 1998 and 1997, in consolidated financial statements, investments in related companies in approximate amounts of Baht 502.2 million and Baht 482.2 million, respectively, were pledged to secure construction for joint ventures and related company, and as a collateral for loans from banks and financial institutions of related company. As at December 31, in the companys financial statements, subsidiaries company and Joint Ventures which had liability balances at the end of year were presented as other liabilities comprise., Percentage of share Holding by Parent Company or Percentage Dividend Business of profit sharing Amount or profit sharing Classification Relationship (Amounts : Baht) in joint venture 1998 1997 payment - Joint Venture Phuket Consortium Consists of CH. Karnchang Public Co., Ltd. Thames Water International (Thailand) Co., Ltd, Index International Group Co., Ltd. and Trio Consultant Co., Ltd. 93.00 2,325,387 909,415 Construction Co - director - Bangkok Metro Co., Ltd. 79.94 2,728,732 - Public Utility consession Co - director - Joint Venture BBCD Bilfinger and Berger Bauaktiengesellschaft CH. Karnchang Public Co., Ltd. Dyckerhoff + Widmann AG 35.00 951,178,319 662,533,326 Construction Co - director - Joint Venture BCKT Bilfinger and Berger Bauaktiengesellschaft CH. Karnchang Public Co., Ltd. Kumagai Gumi Co., Ltd. and Tokyu Construction Co., Ltd. 25.00 5,066,682 21,030,765 Construction Co. - director Total Other Liabilities 961,299,120 684,473,506 NOTE 12 - PROPERTY, BUILDING AND EQUIPMENT - NET As at December 31, property, building and equipment comprised of: (Amounts : Baht) Consolidated CH. Karnchang Public Co., Ltd. 1998 1997 1998 1997 Land and improvement 174,202,506 212,155,573 163,478,762 163,478,761 Building and construction 250,703,086 168,241,762 107,940,184 107,940,184 Leasehold improvement 324,235,491 314,125,933 - - Machinery and equipment 2,885,113,598 2,697,811,165 739,595,537 768,443,181 Furniture fixtures and office equipment 149,551,475 139,995,816 50,265,981 45,588,399 Vehicles 375,488,505 366,906,982 122,258,218 120,423,652 Asset in transit and in progress - 145,280,510 - 734,546 4,159,294,661 4,044,517,741 1,183,538,502 1,206,608,723 Less Accumulated depreciation (2,063,581,065) (1,360,179,527) 655,397,025 (535,432,713) Property, Building and Equipment - net 2,095,713,596 2,684,338,214 528,141,477 671,176,010 In the consolidated financial statements for the year 1998 and 1997, the depreciation were in the amount of Baht 738,367,242 and Baht 603,212,568 respectively. In the companys financial statements, depreciation for the year 1998 and 1997 were recorded in the amount of Baht 141,716,591 and Baht 143,663,182 respectively. As at December 31, 1998 some vehicles of the parent company, the ownerships were registered under the name of a subsidiary and are not being transferred to the company. As at December 31, 1998 and 1997 most equipments and vehicles of joint ventures were registered under the name of joint venture parties or related company or subcontractor. For the subcontractor, the joint venture informed that the assets were registered under the name of subcontractor in order to have convenience for its operation. However, this subcontractor confirmed these assets belong to the joint venture. As at December 31, 1998 and 1997, machinery, equipment and vehicles of a joint venture in amount of Baht 3.85 million, and Baht 111 million respectively, have not yet been registered as joint venture assets. The joint venture which the company has 25% of profit sharing had made land rental contract with the other company. The factory is constructed on rental land to produce the construction material which the rental period is shorter than project life. When the contract is over the joint venture can continue to rent the land as mentioned in the contract. NOTE 13 INVESTMENT IN LAND Investment in land as at December 31, 1998 comprised : Consolidated CH. Karnchang Public Co., Ltd. 1998 1997 1998 1997 Investment in land 230,447,723 230,447,723 187,377,069 187,377,069 Less Allowance for Devaluation of investment in land (27,716,002) - (12,777,069) - Investment Land - Net 202,731,721 230,447,723 174,600,000 187,377,069 In 1998 the parent company, subsidiaries and joint ventures evaluated their investment in land and adjusted to be stated in fair value. In 1997 the company purchased land valued at Baht 21 million. NOTE 14 - OTHER ASSETS Other assets as at December 31, comprised (Amounts : Baht) Consolidated CH. Karnchang Public Co., Ltd. 1998 1997 1998 1997 Deferred Charges 481,616,679 350,293,246 24,361,271 53,657,617 Withholding income tax 143,928,828 108,063,518 77,118,647 6,182,584 Deposits and Guarantees 16,797,968 18,734,025 2,215,467 2,450,505 Other Assets 80,291,162 11,648,218 6,409,505 5,460,405 722,634,637 488,739,007 110,104,890 67,751,111 In the consolidated financial statements of year 1998 and 1997, deferred charges were amortized in amount of Baht 430,088,093 and Baht 343,544,104 for respectively. In the companys financial statements of year 1998 and 1997, deferred charges were amortized in amount of Baht 11,854,164 and Baht 29,553,501, for respectively. As at December 31, 1998 and 1997, the withholding tax which was prepaid no more than 3 years have not yet be requested for refundable amount by the parent company, subsidiaries, and joint ventures. As at December 31, 1998, the consolidated financial statement included deferred expense of Baht 69.35 million incurred from biding MRTA project which the biding result can not be determined in this moment. (More)