SET Announcements

by Parent Company Cost method Amount Amount classification Relationship (Amounts : Thousand Baht) 1999 1999 1998 1999 1998 1999 1998 Investment in Related Companies - Pathumthani Water Company Ltd. 15.00 165,298 165,298 149,450 165,298 149,450 - - Public Utility Concession Investment - Bangkok Expressway Public Co., Ltd. 13.81 2,133,070 1,940,160 2,383,575 1,765,852 2,243,136 - - Public Utility Concession Investment Investment in Other Companies - Nava Finance and Securities Public Co., Ltd. - 27,291 27,291 27,291 27,291 27,291 - - Financial Institution None - Bangkok Tokyu Department Store Co.,Ltd - 2,280 2,280 - - - - - Department Store None - Kruasakul Co., Ltd. 10.14 43,750 43,750 43,750 43,750 43,750 - - Real Estate Development None - Tokyu Merchandise Development Co., Ltd. - - - 15,000 - - - - Department Store None - Tokyu Department Store (Thailand) Co., Ltd. - - - 2,100 - 600 - - Department Store None - The Bangkok Club Co., Ltd. 0.57 3,000 3,000 3,000 3,000 3,000 - - Entertainment None - Chanthaburi Country Club Co., Ltd. 0.25 2,000 2,000 2,000 2,000 2,000 - - Real Estate Development None Investment in Related Joint Ventures 10,502 10,502 10,502 8,845 8,845 - - Total Investments 2,387,191 2,194,281 2,636,668 2,016,036 2,478,072 - - Less Allowance for devaluation of investments (27,291) (27,291) (44,391) (27,291) (27,891) - - Total Investment - Net 2,359,900 2,166,990 2,592,277 1,988,745 2,450,181 - - Valuation of Investments 1. As at September 30, 1999 and 1998, investment in Bangkok Expressway Public Company Limited. The parent company invested in the said company at cost in the approximate amount of Baht 1,992.6 million and Baht 2,243.1 million, respectively. This investment was valued at market price in approximate amount of Baht 1,765.9 million and Baht 3,267.8 million, respectively. Subsidiary company had this investment at cost in the approximate amount of Baht 140.4 million, carried a market value in approximate amount of Baht 174.3 million and Baht 286.5 million, respectively. Investment in Bangkok Expressway Public Company Limited was recorded in fair value in 1999 and in the lower of cost or net realizable value in 1998. The company recorded investment in Bangkok Expressway Public Company Limited in fair value according to generally accepted accounting principles applied for financial statements of fiscal year 1999. 2. As at September 30, 1999 and 1998, investment in Nava Finance and Securities Public Co.,Ltd. in approximate amount of Baht 27.3 million. According to the report of Office of the Auditor General on the financial statements for the year ended December 31, 1998, dated April 1, 1999, reported with qualifications regarding inadequacy of the allowance for doubtful debt. 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 changes the board of directors. In addition, the Financial Institutions Rehabilitation Fund subscribed the additional capital and it also merged by sale or transferring assets and liabilities. The company therefore considered to set up the allowance for devaluation of the whole mentioned security. Losses are shown in statement of income of 1998. 3. As at September 30, 1998, 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 Investment In 1998, according to the minutes of the executive board of directors meeting, no 1/1998 held on 15 January 1998, the managements resolution was passed to sell a portion of its investments in Bangkok Expressway Public Company Limited and investment in Nava Finance and Securities Public Co.,Ltd. in the first quarter of 1998, for the directors approval in the second quarter of 1998, and according to the minutes of the executive board of directors meeting, no 4/1998 held on 20 August 1998 in the third quarter of 1998, approving the sale of investment with a profit of Baht 10.04 million, after net off the loss from selling of investment in Nava Finance and Securities Public Co.,Ltd. in the amount of Baht 75.1 million. Pledged Investments As at September 30, 1999 and 1998, in consolidated financial statements, investments in related companies in approximate amounts of Baht 502.2 million and Baht 500.2 million, respectively were pledged to secure construction for joint ventures and related company and as a collateral for loans from banks and financial institutions for related company. As at September 30, in the companys financial statements, subsidiaries company and Joint Ventures, which had liability balances at the end of period were presented as other liabilities comprise: Percentage Holding by Parent Company Dividend Business or Percentage of profit Equity method or profit sharing classification Relationship (Amounts : Thousand Baht) sharing in Joint Ventures 1998 1999 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 2,919 1,584 - Construction Co - director - Bangkok Metro Co., Ltd. 79.94 16,852 - - Public Utility concession Co - director - Joint Venture BBCD Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd., Dyckerhoff + Widmann AG 35.00 2,325,600 842,300 - 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 - 8,782 - Construction Co - director Total Other Liabilities 2,345,371 852,666 - NOTE 12 - PROPERTY, BUILDING AND EQUIPMENT - NET As at September 30, 1999, certain vehicles of the parent company, the ownerships were registered under the name of a subsidiary and are not being transferred to the company. In the second quarter of 1999, the company sold equipments for construction to a subsidiary company in amount of Baht 16 million which the payment is separated into 36 installments. Each of the first to the thirty fifth installments are Baht 450,000 and the thirty sixth installment is Baht 250,000, starting from May, 1999. The company delivered the whole assets on May 4, 1999 but will transfer the ownerships to the subsidiary when it paid fully price of the received fixed assets already as the contract dated April 30, 1999. The company had gain from sale of the said fixed assets in the approximate amount of Baht 7 million. As at September 30, 1999 and 1998 most equipments and vehicles of joint ventures, which the company has 59.99% and 35% of profit sharing, were registered under the name of participants or related companies or subcontractors. 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 that these assets are belong to the joint venture. Machinery, equipment and vehicles of the joint ventures with the value according to the companys proportion in the approximate amount of Baht 1.4 million, and Baht 144.9 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 other company for plant of producing supplies for construction purpose. Rental period is shorter than project life. When the rental contract period is due, the joint venture can renew the said rental contract as mentioned in the contract. NOTE 13 - OTHER ASSETS In the second quarter of 1999, the company amortized deferred expense in amount of Baht 13.34 million which incurred since 1994 to 1997 for bidding the power purchase concession project generated by waterpower from Num Ngum dam. Expenses from the amortization are included in statement of income. As at September 30, 1999 and 1998, the withholding tax which was prepaid no more than 3 years for the companys financial statements in the amount of Baht 161.9 million and Baht 78.7 million, respectively and in the consolidated financial statements in the amount of Baht 250.4 million and Baht 203 million, respectively, have not yet be requested for refund by the parent company, subsidiaries, and joint ventures. As at September 30, 1999, in the consolidated financial statements included deferred expense in the approximate amount of Baht 112.7 million incurred from biding MRTA concession project which the bidding result cannot be determined at this moment. NOTE 14 - BANK OVERDRAFTS AND LOAN FROM BANKS As at September 30, 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 8.125% per annum. The company has not insured against the risk from exchange rates. Bank overdrafts and loan from banks of parent company are secured by claims in receipt from construction costs and companys directors. - Two limited partnerships in 1999 and 1998 are secured by claims in receipt from construction costs and pledged by securities of related company, partners and directors of the company. - 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 in amount of USD 38.57 million and Yen 8,981.66 million in the 1999, and the amount of Baht 1,150 million and foreign currency in amount of USD 36.04 million and Yen 8,982 million in 1998. The joint venture has insured against the risk from exchange rates in the approximate amount of USD 31.37 million and USD 7.8 million in the 1999 and 1998, respectively. Certain of the mentioned loans are guaranteed by the parent company, participants 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. - A joint venture has premium from purchasing foreign exchange forward contract in the approximate amount of Baht 3.02 million and Baht 10.9 million in the 1999 and 1998, respectively. NOTE 15 - LIABILITIES UNDER DISCOUNTED NOTES RECEIVABLE Liabilities under discounted note receivables of the joint venture which the company has 35% of profit sharing incurred from the discounted of notes receivable from the employer with 4 Banks, the issuance date on these notes receivable are varied which are due within 1 year. NOTE 16 - LONG-TERM LOANS As at September 30, long term loans are as follows: - In 1998, the parent company has a long-term loan from foreign financial institutions in the amounts of USD 35 million, with interest rate SIBOR + 1% per annum. The company made an agreement to secure the risk from exchange rate of the whole loan 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 100 million is promissory note, which is due in 1999. The company postponed its repayment by cancelling and issuing 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 according to the construction agreement to the bank as collateral of the said loan. Certain loans are guaranteed by the participants which is comprised of: In the approximate amount of Baht 500 million in 1998 with interest rate of MLR, MLR+0.5%, the repayment of principal will be made on a monthly basis in approximate amount of Baht 100 million per installment, starting from July 1998. Since October 1998, 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 240 million in 1998 with interest rate of MRR+3.75%, the repayment was on a monthly basis, in the amount of Baht 30 million per installment, starting from August 1998. And in the amount of Baht 406.7 million and Baht 1,200 million in 1999 and 1998, respectively 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 whatever is earlier. In December 1998, 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 whatever 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 September 2002. The conditions for repayment can be changed, depend on the ability of employers work payment in the future. In 1999, the joint venture had requested to change conditions of loan repayment and was approved by bank to start the repayment in October 1999 and complete within April 30, 2000. - A joint venture which the company has 35% of profit sharing has long-term loans from a local commercial bank in the amount of Baht 688 million in 1999 and 1998 which the repayment is separated into 4 installments according to the agreement. All loans will be paid within November 1999 which the joint venture is requesting to postpone and from a finance and securities company in the amount of Baht 533.97 million and Baht 543.97 million in 1999 and 1998, respectively. In 1999 the repayment schedule have been changed to be made in January and February 2000 in amount of Baht 226.98 million per month. Long-term loans of this joint venture have been guaranteed by the participants. - In 1999 and 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 and MLR+1.25%, respectively. 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 transferring 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 1999 and 1998, the current portion of long-term loan included current portion of discounted notes receivable in approximate amounts of Baht 3,823 million and Baht 1,308 million respectively, of the joint venture which the company has 35% of profit sharing is presented under current liabilities. NOTE 17 - INCOME AND COST OF CONSTRUCTION ACTIVITIES In consolidated financial statements of 1999 and 1998, the construction income of a joint venture which the company has 25% of profit sharing have included gain from exchange rate arising from increasing of the exchange rate which was identified in the contracts of foreign currency income portion in the approximate amount of Baht 199.76 million and Baht 121.48 million, respectively which included unrealized gain from exchange rate in amount of Baht 67.37 million and Baht 33.49 million, respectively. The project value of the said joint venture consists of Baht and Yen currency portions, the value of project will vary in accordance with foreign exchange rate. If using the exchange rate identified in construction contract in translation, the project value was lower than the revised budget cost. When using the exchange rate as at September 30, 1999 in translation, the project value is still higher than estimated budget cost. In 1999 The parent company has revised the construction contract price and the project cost. Consequently, the company had to reduce net construction activity income in amount of Baht 93.81 million. The joint venture which the company has 59.99% of profit sharing has revised the project cost. Consequently, the joint venture had to reduce net construction activity income in amount of Baht 32.09 million. The joint venture which the company has 50% of profit sharing has revised the construction contract price. Consequently, the joint venture had to increase net construction activity income in amount of Baht 33.63 million. The joint venture which the company has 35% of profit sharing has revised the project cost. Consequently, the joint venture had to decrease net construction activity income in amount of Baht 771.8 million due to its additional contract from the Expressway and Rapid Transit Authority of Thailand. In 1998 The parent company had made the adjustment to reduce the construction income in approximate amount of Baht 93 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 and the project which the company has already estimated and realized the whole loss in 1997 because the estimation of total contract cost exceeded the total contract revenue, also incurred additional cost in the amount of Baht 90 million. The joint venture which the company has 35%, 50% and 59.99% of profit sharing revised the project cost to be in line with the current economic situation, resulting the joint venture adjusted by decreasing the construction activity income in amount of Baht 483.73 million, Baht 25.08 million and Baht 120.03 million, respectively. The joint ventures which the company has 25% and 59.99% of profit sharing had additional project value and revised project cost, resulting the joint ventures adjusted by decreasing the net construction activity income in amount of Baht 76.71 million and Baht 10.43 million, respectively. NOTE 18 ESTIMATION OF COST OF CONSTRUCTION ACTIVITIES 1999 The joint venture which the company has 35% of profit sharing has revised its cost of construction by increasing from the previous estimation. A certain portion of additional cost of project is additional construction value from the employer which in the first quarter of 1999, there was uncertainty of negotiation. In the second quarter the employer has approved a certain portion of additional construction value. NOTE 19 - GAIN (LOSS) FROM CURRENCY EXCHANGE The company recorded gain (loss) from currency exchange for the nine-month period ended September 30, as follows: Consolidated CH. Karnchang Public Co., Ltd. (Amounts : Thousand Baht) 1999 1998 1999 1998 Gain (Loss) from currency exchange - Realized (28,879) 55,907 377 (12,626) - Unrealized (180,977) 239,758 (6,419) - Total (209,856) 295,665 (6,042) (12,626) As at September 30, the company, subsidiaries and joint ventures had net liabilities in foreign currencies equivalent to USD currency as follows: Amounts : Thousand US Dollar 1999 1998 CH. Karnchang Public Co., Ltd. 5,319 42,567 CH. Karnchang Public Co., Ltd. Subsidiary Companies and Joint Ventures 57,996 95,986 In 1998, the company secured the risk of exchange rate for long-term loans in the amount of USD 42.3 million. In 1999 and 1998, the company, subsidiaries and joint ventures had made contracts to secure the risk from exchange rate in the amount of USD 3.98 million and USD 45 million, respectively. NOTE 20 DIVIDEND, LEGAL RESERVE AND PROFIT SHARING In 1999 The parent company-at the 1999 Ordinary Shareholders meeting held on April 30, 1999, a resolution was passed approving an appropriation of additional legal reserve by 5% of net profit. At a Directors meeting of 8/1999 held on September 14, 1999, resolutions were passed approving as follows - The company to issue and offer for sale senior subordinated debentures with collateral and/or without collateral in Baht and/or in foreign currency equivalent to the total amount not exceeding Baht 2,000 million for local and/or overseas institutional investor, by offering for sale in the whole amount or some part and payment can be made in one or several. The debenture maturity will not exceed 10 years, which the company's directors will set all details and conditions about issuing and selling of debentures. - The company to purchase 1,774,220 shares of Pathumthani Water Co.,Ltd. in the value of Baht 218,770,000 and purchase 849,947 shares of Bangkok Concrete Industries Co.,Ltd. in the value of Baht 94,280,000. - The company to have a mutual investment to set up a limited company with authorized share capital not to exceed Baht 1,200 million. The objective of this investment is to invest in large utility system project. The company will invest not exceed to 60% of the authorized share capital of the said limited company. Subsidiaries-Ordinary shareholders meeting held on April 30, 1999, a resolution was passed approving payment of dividend in amount of Baht 30 per share. The joint venture which the company has 59.99% of profit sharing paid the first profit sharing from completed project to the participants according to the notice dated April 20, 1999 in amount of Baht 80 million. The joint venture which the company has 50% of profit sharing paid the fifth and the sixth profit sharing from the partially completed project to the participants according to the notice dated June 11, 1999 and August 30, 1999 in the total amount of Baht 160 million. In 1998 The joint venture which the company has 53.2% of profit sharing had completed its projects and paid the second and the third profit sharing to the participants in the amounts of Baht 40 million and Baht 200 million, respectively according to the notice dated January 10, 1998 and May 26, 1998, respectively. The joint ventures which the company has 40% and 60% of profit sharing, the project which the company has 40% of profit sharing paid the first, the second and the third profit sharing from completed project to the participants according to the notice dated February 2, 1998, June 19, 1998 and July 27, 1998 in amounts of Baht 20 million, Baht 15 million and Baht 18 million, respectively. And the project which the company has (more)