SET Announcements

NOTE 15 - BANK OVERDRAFTS AND LOAN FROM BANKS As at December 31, bank overdrafts and loans from bank comprised of: (Amounts : Baht) Consolidated CH. Karnchang Public Co., Ltd. 1998 1997 1998 1997 Loans from banks 2,852,551,198 3,054,835,531 957,278,511 1,161,045,605 Add (Less) Difference in value of foreign currencies committed for above loans as compared to closing rates 44,524,999 (211,384,588) 520,000 (172,848,000) 2,897,076,197 2,843,450,943 957,798,511 988,197,605 Bank overdrafts 159,105,805 239,158,913 8,159,140 22,898,840 Trust Receipt 48,533,160 - 48,533,160 - 3,104,715,162 3,082,609,856 1,014,490,811 1,011,096,445 As at December 31, bank overdrafts and loans from banks are as follows: - The parent company, certain loans are foreign currency issued in promissory note in amount of USD 5 million with interest rate of 8.3681% per annum and amount of USD 2 million with fixed interest rate of 20.85% per annum. The company has fully insured against the risk from exchange rates. In 1998 the parent company has made trust receipt contract with a commercial bank for import construction equipment in approximate amount of Baht 48.5 million. In 1998 bank overdrafts and loan from banks of parent company are secured by claims in receipt from construction and companys directors. - Two partnerships in 1998 and 1997 are secured by claims in receipt from construction, and pledged by securities of related company, partners and directors. - A joint venture which the company has 35% of profit sharing had loan contracts with domestic commercial banks and foreign banks in the amount of Baht 1,150 million, and foreign currency amount of USD 36.04 million and Yen 8,982 million in the 1998, and the amount of Baht 585 million, USD 87.6 million and Yen 1,333 million in 1997. The joint venture has insured against the risk from exchange rates in the approximate amount of USD 7.8 million and USD 6.7 million in the 1998 and 1997 respectively. Certain loans are guaranteed by the parent company, participant and letter of consent from joint venture that bank may deduct any delinquent payment of fees, interest and principal from the discount sale of the promissory notes issued by employer. NOTE 16 - LIABILITIES UNDER DISCOUNTED NOTES RECEIVABLE As at December 31, liabilities under discounted note receivable comprise : (Amounts : Baht) 1998 1997 Liabilities under discounted notes receivable 2,899,193,500 986,076,000 Less Current portion of discounted notes receivable (1,816,444,000) (638,085,000) liabilities under discounted note receivable - Net 1,082,749,500 347,991,000 Liabilities under discounted note receivables of a joint venture occured from the discounted of notes receivable from the owner with 4 Banks, the issuance date on these notes receivable are varied. NOE 17 - LONG - TERM LOANS As at December 31, long - term loans comprises: (Amounts : Baht) Consolidated CH. Karnchang Public Co., Ltd. 1998 1997 1998 1997 Long - term loans 3,021,437,240 4,152,485,200 1,491,150,000 2,340,020,000 Less Difference in value of foreign currencies committed for above loan as compared to closing rates (392,787,500) (984,982,500) (392,787,500) (984,982,500) 2,628,649,740 3,167,502,700 1,098,362,500 1,355,037,500 Less Current portion of long-term loans (2,086,253,982) (991,705,855) (898,362,500) (256,675,000) Long-term loans - Net 542,395,758 2,175,796,845 200,000,000 1,098,362,500 As at December 30, long term loans are as follows: - In the 1998 and 1997, the parent company has a long-term loan from foreign financial institutions in the amounts of USD 35 million and USD 45 million respectively, with interest rate SIBOR + 1% per annum for which the company made an agreement to secure the risk from exchange rate on August 30, 1996 and May 12, 1997. The repayment will be made in semi - annually basis starting from August 1997. Each of the first four installments are USD 5 million. The remaining amount of repayments is due within 1 year after. And the long-term loan in amount of Baht 200 million consists of two promissory notes valued Baht 100 million each which are due in 1998 and 1999. The company postponed its repayment by cancelling and issuing two new promissory notes which will be due in 2000 with interest rate of MLR+1.5% per annum. - The joint venture which the company has 59.99% of profit sharing had a long-term loans from local commercial banks, by transferring the right of the claim for receipt of repayment from the employer to the bank as collateral of the said loan according to the construction agreement. Some of loan are guaranteed by the participants which is comprised of: In the approximate amount of Baht 279.6 million and Baht 750 million in 1998 and in 1997 respectively with interest rate of MLR, MLR+0.5% and MLR + 1%, the repayment of principle will be made on a monthly basis in approximate amount of Baht 100 million per installment, starting from July 1998. Since October 1998, the joint venture had repaid the principal on monthly basis in amount of 55% of monthly actual received of billings from the employer which is less than Baht 100 million. The repayment would be completed within June 1999. In the amount of Baht 150 million and Baht 300 million in 1998 and in 1997 respectively from employer month by month with interest rate MRR+3.75%, by repayment was on a monthly basis, in the amount of Baht 30 million per installment, starting from August 1998. And the amount of Baht 1,200 million in 1998 and 1997 with interest rate of MLR, the repayment was on a monthly basis in the amount at least 50% of construction work received each month, but not less than Baht 100 million, starting from October 1998 or when the joint venture has received revenue from the employer to totalling not less than 55% of the contract price, depending on which is earlier. The joint venture changed conditions of loan repayment to be on monthly basis and in amount not less than 20% of construction work received each month, started in January 1999, or when joint venture has received revenue from employer not less than Baht 3,300 million which is earlier. The joint venture has to repay at least in amount of Baht 1,000 million within February 2000 and repay the rest of principal in amount of Baht 200 million within June 2002. Any changes of condition for repayment which can not expected, depend on the ability of employers work payment. - A joint venture which the company has 35% of profit sharing has a long-term loan from a local commercial bank in the amount of Baht 688 million in 1998 and 1997, the repayment is on monthly basis and separated into 4 installments according to the agreement. The first repayment will be made on January 1999. And from a finance company in the amount of Baht 533.97 million in 1998 and Baht 488.97 million and US 4 million in 1997. In 1998, the repayment schedule have been changed to be in September 1999 and October 1999 in amount of Baht 106.79 million and Baht 487.17 million, respectively. Long term loans of this joint venture have been guaranteed by the participants. - In 1998, a joint venture which the company has 25% of profit sharing had a long term loan from a local commercial bank in the amount of Baht 500 million with interest rate of MLR + 1.25%. The repayment of principal was on a monthly basis in the amount 20 % of construction revenue received each month, but not less than Baht 35 million, starting from November 1999, by tranferring the right of the claim for receipt of repayment from the employer for only Baht currency portion according to the construction agreement with the bank as collateral of the said loan and guaranteed by the participants In the 1998 and 1997, the current portion of long - term loan included current portion of discounted notes receivable in approximate amounts of Baht 1,816.44 million and Baht 638.08 million respectively, of the joint venture which the company has 35% of profit sharing is shown under current liability. NOTE 18 - INCOME AND COST OF CONSTRUCTION ACTIVITIES In 1998, the parent company had made the adjustment to reduce the construction income in approximate amount of Baht 283.5 million, according to the cost overrun arising from increase in costs of construction materials, wages, subcontractors together with construction plan of project delayed because of the reserve structure in the construction area. The project which the company has already estimated and realized the loss in 1997 because the estimation of total contract cost exceeded the total contract revenue, also incurred additional cost in the amount of Baht 125 million in 1998. In 1998, the partnership which is investment of subsidiary company increased its construction contract value and also revised construction cost. This resulted in the reduction of construction revenue in amount of Baht 9.73 million. In 1998, the joint venture which the company has profit sharing of 59.99% revised its project cost in relevant to the current economic situation. As the result, the joint venture adjusted by reducing revenue from construction in the approximate amount of Baht 317.34 million. In 1998, the joint venture which the company has 50% of profit sharing devalue its contract price and revise its budget cost. As the result, the revenue from construction was decreased in approximate amount of Baht 15 million In 1998, the joint venture which the company has 35% of profit sharing revised its construction budget costs to be relevant to current economic situation. This caused its net construction revenue to be decreased in the amount of Baht 483.73 million. In 1998, the joint venture which the company has profit sharing of 25% increased value of construction contract and also revised its project cost. These adjustments caused its construction income decreased in approximate amount of Baht 279.44 million. Since the project consists of Baht and Yen currency portions, the value of project will vary in accordance with foreign exchange rate. The project value was lower than budget cost by using the exchange rate identified in construction contract in translation. The project value is higher than estimated budget cost when using the present exchange rate in translation. In consolidated financial statements of 1998, the construction income of 2 joint ventures which the company has profit sharing of 50% and 25% have included gain from exchange rate arising from increasing of the exchange rate identified in the contracts of foreign currency income portion in approximate amount of Baht 216.94 million. In 1997, the parent company had its construction activities income including adjusted transactions decreased as completed construction work was less than the contract construction work in the amount of Baht 31.3 million and increased revenue from completed construction work which was more than contract price in the amount of Baht 35.5 million due to additional work. NOTE 19 ESTIMATION OF COST OF CONSTRUCTION ACTIVITIES In 1998, the joint venture which the company has 35% of profit sharing expected that its cost of construction will be increased from the previous estimation. The negotiation of cost overrun reimbursement between the joint venture and employer is in the process. The joint venture believe that it can claim this reimbursement. Therefore, the joint venture did not adjust to reduce the revenue. NOTE 20 - MANAGEMENT INCOME AND INTEREST INCOME In 1997, company recorded management income from its subsidiary and joint ventures, and interest income on converting from investment to loan to a joint venture with interest rate of 15% per annual. From January 1, 1997 to December 31, 1997, interest incurred in total amount of Baht 58.26 million. The Company informed that the negotiation just concluded in third quarter of 1997 according to the resolution of executive board of directors meeting held on October 7, 1997. NOTE 21 - GAIN (LOSS) FROM CURRENCY EXCHANGE The company recorded gain (loss) from currency exchange for the year ended December 31, as follows: Consolidated CH. Karnchang Public Co., Ltd. (Amounts : Baht) 1998 1997 1998 1997 Gain (Loss) from currency exchange - Realized 68,125,468 249,720,443 (12,951,081) (12,852,010) - Unrealized 218,346,777 (1,031,321,073) - (28,414,458) Total 286,472,245 (781,600,630) (12,951,081) (15,562,448) As at December 31, 1998, the company, subsidiaries and joint ventures had liabilities in foreign currencies equivalent to USD currency as follows: Amounts : US Dollar 1998 1997 CH. Karnchang Public Co., Ltd. 43,459,067 55,185,058 CH. Karnchang Public Co., Ltd. Subsidiary Companies and Joint Ventures 103,086,850 107,218,615 In 1998 and 1997, the company secure the risk of exchange rate for long term loan in the amount of USD 42,779,122 and USD 53,791,603, respectively. In 1998 and 1997, the company, subsidiaries and joint ventures had a contract to secure the risk from exchange rate in the amount of USD 47,696,485 and USD 56,136,603, respectively. NOTE 22 - LOSS FROM USING MANAGED FLOAT SYSTEM The company had net loss from exchange rate for the year ended December 31, 1997 in the amount of Baht 15,562,448 which included loss from using the managed float system in the amount of Baht 11,464,943, the company recorded as expenses in the statement of income. CH. Karnchang Public Co., Ltd. subsidiaries and joint ventures had net loss from exchange rate for the year ended December 31, 1997 in the amount of Baht 781,600,630 which included loss from using the managed float system before tax in the amount of Baht 803,429,174 which CH. Karnchng public Co., Ltd. subsidiaries and joint ventures recorded as expenses in the statement of income. NOTE 23 - DIVIDEND, LEGAL RESERVE AND PROFIT SHARING The parent company 1997 Ordinary Shareholders Meeting held on April 28, 1997, The resolution was passed approving payment of dividend in the amount of Baht 210 million and appropriated legal reserve 5% of net profit. Subsidiary company - 1998 and 1997 Ordinary Shareholders Meetings held on April 22, 1998 and April 29, 1997 the resolutions were passed approving payment of dividend at Baht 20 per share, totalling Baht 20 million and Baht 15 per share, totalling Baht 20 million, respectively. In 1998, the following joint ventures contributed its profit : Million Baht The joint venture which the company has 60% of profit sharing 87 The joint venture which the company has 40% of profit sharing 123 The joint venture which the company has 53.2% of profit sharing 390 The joint venture which the company has 50% of profit sharing 144 NOTE 24 - COMMITMENTS AND CONTINGENT LIABILITIES As at December 31, commitments and contingent liabilities are as follows: - The parent company had commitments from guarantee loans, unused letter of credit and letters of guarantee issued by banks to joint venture which the company is one of the participants, in the approximate amount of Baht 6,028.45 million and Baht 3,352 million in 1998 and 1997, respectively. - From unused letter of credit in the amount of Baht 100 million in 1997. - In 1998 and 1997 the joint ventures had unused letters of credit with banks in the approximate amount of Baht 1,036.26 million and Baht 227.1 million, respectively. 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