SET Announcements

been prepared in accordance with generally accepted accounting principles and Ministerial Regulations No.7 (1996) dated October 25, 1996. Joint ventures including in the consolidation by proportionate method are those having major responsibility and significant in success of result being responsible by CH. Karnachang Public Co., Ltd. and/or its subsidiaries. The consolidated financial statements for the nine-month period ended September 30, 1999 and 1998 were consisted of the financial statements of CH. Karnchang Public Co., Ltd., subsidiaries and joint ventures by proportion of holding by the parent company as follows: Percentage Holding by Parent Company or Percentage of profit sharing in Joint Ventures Subsidiaries Construction Material Supply Company Limited 99.99% (in 1999) CH. Karnchang Realestate Co., Ltd. and Partnerships Limited 99.00% Bangkok Metro Company Limited 79.94% CH. Karnchang-Tokyu Construction Co., Ltd. and Joint Ventures 55.00% Equity in Joint Ventures 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% Joint Venture CH. Karnchang Public Co., Ltd., Tokyu Construction Co., Ltd. in joint venture with CH. Karnchang - Tokyu Construction Co., Ltd. - Highway Project 60.00% - Expressway Project 40.00% Joint Venture CH. Karnchang Public Co., Ltd., Bilfinger and Berger Bauaktiengesellschaft, Tokyu Construction Co., Ltd. and CH. Karnchang - Tokyu Construction Co., Ltd. - Second Stage Expressway Project Part B Route Phayathai - Bangkhlo 53.20% - Second Stage Expressway Project Part C+ Route Chaeng Watthana - Bang Phun and Bang Sai 59.99% - Second Stage Expressway Project Part D Route Asoke - Srinakarin 59.99% - Second Stage Expressway Project Part C1A Route Ngam Wong Wan - Chaeng Watthana 59.99% Joint Venture TWCK (Thames Water International (Thailand) Ltd. and CH. Karnchang Public Co., Ltd.) 50.00% Joint Venture BBCD (Bilfinger and Berger Bauaktiengesellschaft , CH. Karnchang Public Co., Ltd. and Dyckerhoff & Widmann AG) 35.00% Joint Venture BCKT (Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd., Kumagai Gumi Co., Ltd., and Tokyu Construction Co., Ltd.) 25.00% Equity in Joint Ventures by the parent company 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. CH. Karnchang Public Co., Ltd. in joint venture with Thames Water International (Thailand) Co., Ltd. Index International Group Co., Ltd. and Trio Consultant Co., Ltd. made agreement with The Civil Department, the Ministry of Interior to construct drainage system and waste water treatment system for Phuket Municipality of Phuket Province as contract dated May 31, 1994, and issued the last invoice to employer in the second quarter 1997. Joint Venture CH. Karnchang Public Co., Ltd., Tokyu Construction Co., Ltd. in joint venture with CH. Karnchang - Tokyu Construction Co., Ltd. CH. Karnchang Public Co., Ltd. in joint venture with CH. Karnchang - Tokyu Construction Co., Ltd and Tokyu Construction Co.,Ltd. made agreement with - The Department of Highways to construct Bangkok - Chon Buri New Highway Project from Anuj to Klong Kalong as contract dated September 30, 1993, and Bangkok - Chonburi new highway Bang Bo Interchange and road to Highway No 34 as contract dated August 30, 1994. The Joint Venture has completed construction work, Bangkok - Chon Buri highway project from Anuj - Klong Kalong, and Bangkok Chonburi new highway, Bang Bo interchange project and road to highway No 34, and submitted to the employer in the forth quarter 1997 and the first quarter 1998, respectively. - The Expressway and Rapid Transit Authority of Thailand to construct Ramindra - Atnarong Expressway System and BMAS Road : Lat Phrao Rd. - Soi Sukha as contract dated December 3, 1993, November 3 and 18, 1994. The Joint Venture has completed contraction work, Ramindra - Atnarong Expressway and BMAS Road project; Lat Phrao Rd - Soi Sukha, and submitted to contractor in the third quarter 1996. The amount of completed construction is less than what was stated in the contract but which has already been agreed upon by the employer. Joint Venture CH. Karnchang Public Co., Ltd., Bilfinger and Berger Bauaktiengesellschaft, Tokyu Construction Co., Ltd. and CH. Karnchang - Tokyu Construction Co., Ltd. CH. Karnchang Public Co., Ltd in joint venture with Bilfinger and Berger Bauaktiengesellschaft, Tokyu Construction Co., Ltd. and CH. Karnchang - Tokyu Construction Co., Ltd. made agreement with - Bangkok Expressway Public Co., Ltd. to construct Second Stage Expressway System Sector B from Phayathai interchange to Bangkhlo as contract dated March 14, 1994, which has completed and submitted to the employer in the third quarter 1996. - Northern Bangkok Expressway Co., Ltd. to construct Second Stage Expressway Sector C+ Bang Pa-in to Pak Kret, Sector 1, from Chaeng Wattana to Bang Pun and Bang Sai as contract dated September 27, 1996, which the first stage had been completed and submitted in December 1998 and the second stage will be completed within November 30, 1999. - Bangkok Expressway Public Co., Ltd. to construct Second Stage Expressway System Sector D from Asoke - Srinakarin as contract dated April 17, 1997, which the first stage had been completed and submitted in December 1998 and the second stage will be completed within April 21, 2000. - Bangkok Expressway Public Co., Ltd. to construct Second Stage Expressway System Sector C1A to expand lanes, from Ngam Wong Wan to Chaeng Wattana from a dual two-lane to dual three-lane carriageway as contract dated April 17, 1997. This project will be completed within April 21, 2000. The joint venture had completed and submitted the additional construction work of gate way at Ngam Wang Wan road to the employer on September 30, 1999. Joint Venture TWCK (Thames Water International (Thailand) Ltd. And CH. Karnchang Public Co., Ltd.) CH. Karnchang Public Co., Ltd. in joint with Thames Water international (Thailand) Co., Ltd. have made agreement with Pathumthani Water Co.,Ltd. to construct water producing and distribution plant in the Pathumthani Province as contract dated November 21, 1995, which construction work plan is being completed and submitted within February 1999. Joint Venture BBCD (Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd. and Dyckerhoff & Widmann AG) CH. Karnchang Public Co., Ltd. in joint with Bilfinger and Berger Bauaktiengesellsehaft and Dyckerhoff &Widmann AG to construct Bang na-Bang Pli - Bang Pakong Expressway Project as contract dated June 28, 1995. The project will be completed and submitted within January 2000. Joint Venture BCKT (Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd., Kumagai Gumi Co., Ltd. and Tokyu Construction Co., Ltd.) CH. Karnchang Public Co., Ltd. in joint with Bilfinger and Berger Bauaktiengesellschaft, Kumagai Gumi Co.,Ltd. and Tokyu Construction Co., Ltd. to construct of the initial underground transit section from Hua Lamphong to Bang-Su as contract dated November 5, 1996 and the project is scheduled to be completed within 260 weeks commencing the date of contract. Equity in Joint Ventures by subsidiary Joint venture of CH. Karnchang Public Co., Ltd. and CH. Karnchang Tokyu Construction Co., Ltd. CH. Karnchang - Tokyu Construction Ltd. in joint with CH. Karnchang Public Co., Ltd. made agreement with the Police Department to construct the police department office building, together with car park building and other related constructions as contract dated September 30, 1996. The joint venture has to finish its work within December 24, 1999. However, there is approval to extend construction period to August 7, 2000 as the notice dated May 26, 1999. Joint venture of CH. Karnchang Tokyu Construction Co., Ltd. and Tokyu Construction Co., Ltd. CH. Karnachang - Tokyu Construction Co., Ltd. in joint with Tokyu Construction Co., Ltd. made agreement with Joint Venture CH. Karnchang Public Co., Ltd. Bilfinger and Berger Bauaktiengesellschaft, Tokyu Construction Co., Ltd. and CH. Karnchang - Tokyu Construction Co., Ltd. to construct Bang Pa In Pak Kret Expressway sectors 15 & 16 as contract dated August 14, 1997. As at September 30, 1999 the joint venture had an additional construction and had received revenue over the contract value. A certain portion of construction value had not been covered by the contract and last stage of work is under the examination of the joint venture. The results of subsidiaries operation were presented in this consolidated financial statement since acquisition date. The significant related transaction, investment of parent company and shareholders equity of subsidiaries were eliminated from this consolidated financial statement. Excess in net book value as acquisition date over cost of investment in limited partnership of subsidiary is adjusted to retained earnings at the beginning of year. NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition for Construction Company recognized revenue from construction on percentage of completion. Revenue from additional work and the constructions that have working period not over 1 year are recognized on work done and billed to customer. Subsidiary company and joint ventures which subsidiary has joint control recognized revenue on work done and billed to customer due to contract period is short. Joint ventures and partnership recognized revenue on percentage of completion. Revenues from moving infrastructure, additional work and other contract works are recognized on work done and billed to customer. The joint ventures which the company has 25% of profit sharing have contract price in foreign currency, recognized revenue on percentage of completion included gains and losses from exchange rate between exchange rate identified in construction contract and exchange rate on billing date. Revenue and Expenses Recognition Revenue and expenses are recognized on an accrual basis. Cash and Cash Equivalents Cash and cash equivalents comprised cash on hand, unpledged cash at banks and short term deposits. Allowance for Doubtful Accounts Allowance for doubtful accounts is provided based on the review of the current status of each account. Construction Contract in Progress The cost of construction contract in progress comprises of the cost of materials and labor, subcontractor charges, the services and overheads plus attributable net profit or loss less amount billed to customers. Excess in construction contract in progress value over amount billed to customers is showed under current assets. For the excess amount billed to customers over construction contract in progress value is showed in deferred construction revenue under current liabilities. Supplies for Construction and Construction in Progress Supplies for construction and inventory are valued at cost using first-in-first-out method. Construction in progress comprises of the cost of materials and labor, subcontractor charges, services and overheads. Construction in progress and supplies in process are valued at cost. In 1999, one subsidiary company had changed its accounting policy to present value of cost of material and inventories from the weighted average method to use the first-in first-out method in compliance with the general accounting principle applied for the same business. The effect of this change is immaterial. Investment Investment in subsidiaries and joint ventures which the company has significant influence are stated according to the equity method. Investments in marketable securities are stated at fair value in 1999 and at the lower of cost or net realizable value in 1998. Other investments are stated at cost. Investment in marketable securities are stated at fair value in accordance with generally accepted accounting principles applied for financial statements of fiscal year 1999. Excess in Book value over Cost of Investment Excess in book value over cost of investment is the difference of book value compare with amount paid for acquisition cost of investment, which is written off to retained earnings at beginning of years. Property, Plant and Equipment Property plant and equipment are stated at cost. Depreciation are computed by the straight-line method over the estimated useful lives as follows: Building 20 years Equipment 5 years Leasehold improvement according to remaining project life For the equipments acquired by a partnership before 1993, depreciation was computed by straight-line method from the book value at January 1, 1993, the useful life of 5 years. Tunnel Boring Machines are stated at cost. Depreciation is computed based on the completed boring distance against the total project work distance. Investment on land was recorded in appraised price, which was estimated by independent appraisal. Company Establishment Expenses Company establishment expenses are amortized within five years from date of operating. Pre-operating Expense Pre-operating expense is amortized according to the project - period from the date of commencement of the operations. Deferred Charges Almost deferred charges are related to expense of providing finance, successful biding project, leasehold improvement will be amortized according to the related contracts and loan periods. Foreign Currency Transactions Foreign currency transactions during the periods are translated to Baht at the exchange rate at the transaction dates. Foreign currency balances at the balance sheet date are translated at the exchange rates ruling on that date. Foreign currency balances that are secured by the agreement are translated using exchange rate of the agreement. Exchange gains and losses are included in determining income. The differences between exchange rate from foreign exchange forward contracts are amortized as expense or income included in statement of income according to each foreign exchange forward contract periods. Earnings (Deficits) per Share Earnings (Deficits) per share are calculated by dividing the net profit (loss) for the periods by the number of shares outstanding at the end of periods. NOTES 5 SHORT-TERM INVESTMENTS As at September 30, cash at bank - fixed deposit of the parent company in the amount of Baht 20,000 and of one joint venture in amount of Baht 39 million are used as collateral for bank guarantee of using electricity and forward contract in 1999. Cash at bank of one joint venture in amount of Baht 7.5 million are used as collateral for bank guarantee from banks in 1998. NOTES 6 - ACCOUNTS RECEIVABLE As at September 30, 1999, the company had accounts receivable, which were classified by account receivable aging as follows: Amounts : Thousand Baht Construction contract receivables Consolidated CH.Karnchang Public Co.,Ltd Related Companies Other Related Companies Other & Joint Ventures Receivables Total & Joint Ventures Receivables Total Less than 3 months 359,134 484,185 843,319 130,883 195,255 326,138 More than 3 to 6 months 87,118 - 87,118 217,740 - 217,740 More than 6 to 12 months 99,287 573 99,860 217,024 573 217,597 More than 12 months 272,069 - 272,069 274,223 - 274,223 817,608 484,758 1,302,366 839,870 195,828 1,035,698 Less Allowance for doubtful accounts (5,090) - (5,090) - - - 812,518 484,758 1,297,276 839,870 195,828 1,035,698 Retention accounts as per contracts 11,576 129,073 140,649 15,399 21,354 36,753 Total 824,094 613,831 1,437,925 855,269 217,182 1,072,451 For the accounts receivable aging over 1 year, the company does not record allowance for doubtful accounts. The management has explained that the related joint venture has been affected by the economic recession and overall Thailands liquidity problem in 1997 which being recovered since 1998. The joint venture started to repay its debt in 1999 and the company plans to discuss with the joint venture regarding to its finance restructure in order that the joint venture can make full repayment within the forth quarter of 1999. As at September 30, 1999, the joint venture which the company has 59.99% of profit sharing had an account receivable from additional construction work in the approximate amount of Baht 101.8 million. Currently, it is in the process of negotiation on repayment with the account receivable. The joint venture set up allowance for doubtful account in amount of Baht 5.09 million. The effect of the allowance for doubtful account that should be set up increasingly can not be estimated. NOTE 7 CONSTRUCTION IN PROGRESS In the second quarter of 1999, the joint venture which the company has 35% of profit sharing has adjusted construction in progress from additional work in the approximate amount of Baht 232.4 million which value of work of the additional contract from employer is in the process of negotiation which resolution can not yet be concluded by transferring to the cost of construction and adjusted estimated budget cost to address increasing of the said cost. NOTE 8 ADVANCE TO SUBCONTRACTOR As at September 30, 1999, a joint venture which the company has 50% of profit sharing has outstanding balance of advance payment to an affiliate company in amount of USD 1.58 million. The joint venture expected to submit the whole construction work in 1999. The outstanding significant advance payment amount to the affiliated company resulted from the delay in shipping supplies. The joint venture will reduce this outstanding balance by compensation with balance in payable and get reimbursement from the affiliated company in the future. NOTE 9 OTHER CURRENT ASSETS As at September 30, 1999, other current assets included receivable from Revenue Department of the joint venture which the company has 50% of profit sharing in the amount of Baht 20.1 million from Value Added Tax. The joint venture will refund its Value Added Tax in cash when its project finished. As at September 30, 1999, 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 and to create efficient working result in the same area. The Expressway and Rapid Transit Authority of Thailand will take responsibility of compensation cost by payment through variation order of joint venture. Since the approval of reimbursement for variation order is in process and the said subcontractor has partly completed its construction, the joint venture had to pay advance to the said subcontractor which was included in the consolidated financial statements in the approximate amount of Baht 15.4 million. NOTE 10 - NOTES RECEIVABLE - FINANCE COMPANIES In 1998, promissory notes from finance companies in the amount of Baht 147.8 million were promissory notes from the finance companies to which the 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. In the fourth quarter of 1998, one subsidiary company had discounted its promissory note to bank. In the second quarter of 1999, the joint venture in which the company has 50% of profit sharing transferred its right to claim in promissory note to related company according to the notice dated May 27, 1999 for principal and interest repayment. NOTE 11 - INVESTMENTS IN SUBSIDIARIES, RELATED, OTHER COMPANIES AND JOINT VENTURES As at September 30, investments in subsidiary companies and joint ventures comprise of: Percentage Holding by Parent Company Dividend Business or Percentage of profit Cost method Equity method or profit sharing payment Classification Relationship (Amounts : Thousand Baht) sharing in Joint Ventures 1999 1999 1998 1999 1998 Subsidiaries Production, distribution, Selling & buying - Construction Material Supply Co.,Ltd. 99.99 15,000 32,144 - - - construction supplies Co- director - CH. Karnchang Realstate Co., Ltd. and Limited Partnerships 99 158,400 300,127 285,696 - - Investment and construction Co- director - Bangkok Metro Co., Ltd. 79.94 799 - 772 - - Public Utility Concession Co- director - CH. Karnchang-Tokyu Construction Co., Ltd. and Joint Ventures 55 55,000 234,560 208,020 16,500 - 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 - 1,953 49,560 - 9,000 Construction Co-director Expressway Project 40 - 293 29,550 - 21,200 Percentage Holding by Parent Company Dividend Business or Percentage of profit Cost method Equity method or profit sharing payment Classification Relationship (Amounts : Thousand Baht) sharing in Joint Ventures 1999 1999 1998 1999 1998 - 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 - 73,895 153,133 - 122,400 Construction Co-director - Second Stage Expressway Project Sector C+ Route Chaeng Watthana - Bang Phun & Bang Sai 59.99 - 576,173 591,405 47,984 - - Second Stage Expressway Project Sector D Route Asoke Srinakarin 59.99 - 81,506 40,501 - - - Second Stage Expressway Project Sector C1A Route Ngam Wong wan - Chaeng Wattana 59.99 - 44,117 13,419 - - - Joint Venture TWCK (Thames Water International (Thailand) Ltd. and CH. Karnchang Public Co., Ltd.) 50 - 31,554 115,181 80,000 32,000 Construction Co-director - Joint Venture BCKT Bilfinger + Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd., Kumagi Gumi Co.,Ltd.,and Tokyu Construction Co., Ltd. 25 - 94,200 - - - Construction Co-director Total Investment in subsidiaries and joint ventures 229,199 1,470,522 1,487,237 144,484 184,600 As at September 30, investment in related and other companies comprise of: Percentage Holding Consolidated CH.Karnchange Public Co., Ltd. Dividend Business (more)