SET Announcements

60% of profit sharing paid the first profit sharing according to the notice dated June 19, 1998 in amount of Baht 15 million. The joint venture which the company has 50% of profit sharing paid the first and the second profit sharing from the partially completed project to the participants according to the notice dated May 12, 1998 and September 4, 1998 in amounts of Baht 34 million and Baht 30 million, respectively. NOTE 21 - COMMITMENTS AND CONTINGENT LIABILITIES As at September 30, commitments and contingent liabilities are as follows: - The parent company had commitments from guarantee loans, letter of credit, letters of guarantee issued by banks and discounted notes to joint venture which the company is one of the participants, in the approximate amounts of Baht 3,214 million and Baht 3,917.2 million in 1999 and 1998, respectively. - In 1999 and 1998, the joint ventures have unused letters of credit with banks in the approximate amount of Baht 62.65 million and Baht 337.2 million, respectively. The commitments from letter of guarantee issued by banks are as follows: (Amounts : Thousand Baht) Consolidated CH. Karnchang Public Co., Ltd. 1999 1998 1999 1998 Guarantee of construction contract, bid, and payment 5,873,936 6,991,958 1,508,614 1,618,087 Advance Payment Bond and Retention 4,998,291 5,116,296 222,178 184,301 Guarantee of loss revenue due to damage caused by transportation, retention bond, rental equipment, electricity and letter of credit 1,002,081 1,369,744 806,571 924,583 One of the joint ventures transferred its right to received work value from employer to secure its bank guarantee. Foreign currency In 1999 The joint venture which the company has 35% of profit sharing has commitment with banks from forward contracts in amount of USD 31.37 million. The joint venture which the company has 25% of profit sharing has made 30 foreign exchange forward contracts in totalling amount of Yen 3,000 million with a commercial bank which pledged by fixed deposit in amount of Baht 39 million and guaranteed by the participant. This contract may raise gain or loss from exchange rate in the future. These contracts will be due in 1999 and 2000. The joint venture has made another 5 foreign exchange forward contracts in totalling amount of Yen 500 million. The effects of these contracts are depend upon future decision of commercial bank as contractor. Other contracts In 1999 Subsidiary company has rental concrete plant and rubber plant contract by monthly rental payment of Baht 2,053,000 per month. The rental period is 1 year, ending on May 1, 2000. The joint venture which the company has 35% of profit sharing has made 2 land rental agreements for 3 year and 4 year periods. The rental rate is Baht 13,500 per month per rai and Baht 618,000 per annum, respectively. The joint venture which the company has 25% of profit sharing has a commitment from the outstanding balance of vehicle rental agreement in the approximate amount of Baht 25.58 million and land rental agreement for constructing a factory producing construction supplies and for locating a temporary office in the approximate amount of Baht 18.58 million. 1998 Subsidiary company from the Purchase and Sale contract with outstanding balance in the approximate amouns of Baht 22.9 million and Baht 34 million, respectively. A joint venture which the company has 25% of profit sharing from made Purchase Contract with subsidiary company has outstanding balance in the approximate amount of Baht 34 million and had commitment from vehicle rental agreement in approximate amount of Baht 32.9 million. Other matters In 1999 The joint venture which the company has 59.99% of profit sharing was claimed to compensate on its staffs lay off in the approximate amount of Baht 6.3 million. The case is in the consideration of court. The joint venture which the company has 35% of profit sharing - Claimed the compensation from employer which is in the process of arbitrator and has currently not been finalized yet. - Was claimed by its employee to pay compensation for overtime according to the law in the approximate amount of Baht 9.4 million. The case is on trial of Labor Court. - Had loan outstanding from a commercial bank which was overdue. The lender has the right to call for principal repayment and interest incurred according to the agreement. As at September 30, 1999, the outstanding loan principal and interest are in the amount of Baht 688 million and Baht 735,123.29, respectively. The joint venture which the company has 25% of profit sharing was claimed on an unfair employment termination by a former employee in the approximate amount of Baht 197.47 million, although the former employee received the full amount of compensation based on Thai Labor Law. The case is still under the court procedures. The view of its legal consulting company is that according to court practice, no precedent has existed for the payment of such a large claim in a Labor Case and expected that the case would be concluded in favor of the joint venture. NOTE 22 COMPENSATION ON SUBMITTED RIGHT OF WAY The joint venture which the company has 35% of profit sharing burdened increased construction costs, since the Expressway Rapid Transit Authority (employer) submitted right of way to the joint venture late than scheduled. The joint venture has sent letter to claim the employer for compensation according to actual costs incurred in various expenses in the approximate amount of Baht 10,000 million. Employers engineering consultant is currently considering for the appropriation of the said costs as the joint venture claim. This would result that the joint venture may have revenue from the said claim of compensation in a certain amount according to the right of claim concerned. NOTE 23 DISCLOSURE Disclosure of equity in assets, liabilities, revenue and expenses in joint venture of parent company according to its proportion as follows Amounts : Thousand Baht 1999 1998 Current assets 7,426,463 8,746,619 Fixed assets and other assets 1,358,429 2,240,254 Current liabilities 9,607,411 8,536,207 Long-term liabilities 25,870 1,275,661 Revenue 4,651,922 7,514,690 Expense 5,311,227 6,563,970 NOTE 24 SUBSEQUENT EVENTS A joint venture which the company has 59.99% of profit sharing had completed and submitted the significant part to use the whole project of the expressway Bang Pa-in to Pak Kret, Sector 1, Stage 2 in October 31, 1999, and signed contract for additional work of Second Stage Expressway System from Asoke Srinakarin in the approximate amount of Baht 302.24 million. In October 1999, a finance company, who is a the lender of the joint venture which the company has 35% of profit sharing has transferred the right and benefits according to the credit facility agreements and the right under all guarantees at present or will occur in future to one commercial bank, which was effect on October 15, 1999. As at September 30, 1999 the mentioned loan is in the amount of Baht 533.97 million. In addition the said joint venture had postponed repayment of loan from a commercial bank in the amount of Baht 750 million. The joint venture will repay all outstanding loan within December 2000. The first installment will be the date on which the joint venture receive money for additional work from employer or receive compensation from the delay of design submission and other expenses from employer or on January 31, 2000 which is earlier. NOTE 25 - RECLASSIFICATION Certain transactions for 1998 financial statements have been reclassified to conform with the 1999s financial statements presentation. Certain transactions for 1999 financial statements have been reclassified in accordance with generally accepted accounting principles applied for financial statements of fiscal year 1999. NOTE 26 - 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 27 - IMPROVEMENT COMPUTERIZED SYSTEM FOR YEAR 2000 (Y2K) (UNREVIEWED AND NOT FORMING PART OF REVIEW REPORT) The year 2000 problem arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as some other year, resulting in errors when information using year 2000 dates is processed. Entities may experience the effects of the Year 2000 problem before, on, or after January 1, 2000, and the effects on operations and financial reporting, if not addressed and repaired properly and timely, may range from minor errors to significant systems failure which could affect an entitys ability to conduct normal business operations. In addition, it is not possible to be certain that all aspects of the Year 2000 problem affecting the entity, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. The company started computer improvement to solve problem of Y2K. As at September 30, 1999 the improvement has been finished. The company recorded these expenses in the incurred period. As at September 30, 1999 the company recorded these expenses in totalling amount of Baht 1.67 million. However, the company is 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. Major subsidiary and joint venture, in overall have considered specific critical system which impact their ongoing operation or have considered that there is no impact of year 2000 to their operations. The same as parent company, they are 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.