SET Announcements

The commitments from letter of guarantee issued by banks which one of the joint venture transferred its right to received work value from employer to secured its bank guarantee are as follows: (Amounts : Baht) Consolidated CH. Karnchang Public Co., Ltd. 1998 1997 1998 1997 Guarantee of construction contract, bid, and payment 6,923,802,201 6,946,083,603 1,659,865,029 2,170,611,544 Advance Payment Bond and Retention 5,141,260,644 4,683,844,013 172,427,440 283,722,440 Guarantee of loss revenue due to damage caused by transportation, retention bond, rental equipment electricity and letter of credit 1,421,169,575 984,882,006 1,065,552,468 - Foreign exchange A joint venture which the company has 35% of profit sharing has commitment with banks from forward contracts in amount of USD 8.49 million and has made 2 forward contracts for speculation purpose in amount of USD 21 million with a commercial bank which is due on October and November 1999. This contract may raise gain or loss from exchange rate in the future. As at December 31, 1998 a joint venture recorded loss from the said contract in amount of Baht 9.45 million. The joint venture which the company has profit sharing of 25% has made 4 foreign exchange forward contracts in totalling amount of Yen 1,000 million with a commercial bank and pledged by fixed deposit in amount of Baht 25 million. This contract may raise gain or loss from exchange rate in the future. These contracts will be due in 1999. Contracts Subsidiary company has the outstanding balance of sale construction supplies contract in the approximate amount of Baht 19.55 million and from other rental contracts. A joint venture which the company has 35% of profit sharing has made 2 land leasing agreements for 3 year and 4 year periods. The leasing rate is Baht 13,500 per month per rai and Baht 618,000 per year , respectively. A joint venture which the company has 25% of profit sharing has the outstanding balance of purchase contract with subsidiary company in the approximate amount of Baht 20 million and has commitment from vehicle rental agreement in the approximate amount of Baht 32.4 million Other matters A joint venture which the company has 59.99% of profit sharing was claimed to compensate on its staff lay off in the approximate amount of Baht 4.7 million. The case is in the consideration of court. As at December 31, 1998 a joint venture which the company has 35% of profit sharing has a claim against the employer. This claim is under consideration of employers approval of work done which the joint venture has cost incurred in the approximate amount of Baht 70 million. NOTE 25 - RECLASSIFICATION Certain transactions for 1997 financial statements have been reclassified to conform with the 1998s financial statements presentation. NOTE 26 SUBSEQUENT EVENT The parent company will make a contract with a related joint venture regarding the MRTA project which project valued is in approximate amount of Baht 573.42 million in accordance with the minute of executive board of director meeting no 1/1999 held on January 19, 1999. The joint venture which the company had 59.99% of profit sharing has made the contract of additional work from the second stage expressway from Ngam Wong Wang to Changwattana by expanding from two lanes to three lanes, in the amount of Baht 36 million. This joint venture has claim to compensate on its staff lay off. The case is in the consideration of court. In January and February 1999. The joint venture which the company has 35% of profit sharing has overdue loan repayment to a local commercial bank. This would joint venture due to lender has a right to immediately call the principal and interest incurred according to the agreement. NOTE 27 - DISCLOSURE OF SEGMENT INFORMATION The parent company, subsidiaries and joint ventures operate their constructions only in Bangkok and region. Therefore, segment information is not available. NOTE 28 - IMPROVEMENT COMPUTERIZED SYSTEM FOR YEAR 2000 (Y2K) (UNAUDITED AND NOT FORMING PART OF AUDITORS REPORT) The company started operating computer improvement to solve problem of Y2K since January 1995. As at December 31, 1998 approximate 80% of solution has been finished. All improvement is expected to be finished in 1999. Total relevant expenses are approximate amount of Baht 1.5 million. The company recorded these expenses on accrual basis. As at December 31, 1998 the company recorded these expenses in total amount of Baht 1.4 million. The company still having risk in dealing with others who may be unable to solve the computerized system in time. The ultimate effect can not presently be determined but not expected to be material. Almost of subsidiary and joint venture, they will revised critical system which impact their ongoing operation and preparation of financial information. Plans are in place will be developed to enhance system required, before the impact of year 2000 created significant error. The reserve expenses for this issue are not be set but believe that there is no impact of year 2000 to their operation. The same as parent company, they still having risk in dealing with others who maybe unable to solve the computerized system in time. The ultimate effect can not presently be determined but not expected to be material. 43