SET Announcements

1999 1998 Loan Policy of Related Parties Loans to Subsidiaries - CH. Karnchang Real Estate Company Limited - 400,000 Market borrowing at rate 9.50% up to 18.50% - Bangkok Metro Company Limited 129,527,970 61,527,970 Market borrowing at rate 8.75% up to 14.25% Joint ventures - Joint Venture Phuket Consortium Consists of CH. Karnchang Public Co., Ltd., Thames Water International (Thailand) Co., Ltd., Index International Group Co., Ltd., Market borrowing and Trio Consultant Co., Ltd. 6,626,579 6,400,000 at rate 8.75% up to 14.25% (Amounts :Baht) 1999 1998 Loan Policy of Related Parties - Joint Venture BCKT (Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd., Kumagai Gumi Co., Ltd., and Market borrowing Tokyu Construction Co., Ltd.) 45,502,739 45,502,740 at rate 15% Associated company Market borrowing at rate - Pathumthani Water Company Limited 376,417,686 141,040,900 8.87% up to 12.25% Total loans to 558,074,974 254,871,610 As at December 31, 1999 and 1998, the Company had the interest receivable from loans to subsidiaries, related companies, and joint ventures in the amount of Baht 52,525,789 million and Baht 18,482,068 million, respectively. Bangkok Metro Company Limited The parent company had loan to the subsidiary's Bangkok Metro Company Limited from advance payment for project to employer as at December 31,1999 in the amount of Baht 129,527,970 and interest receivable in the amount of Baht 10,305,296 by providing credit facility not over than Baht 150 million and repayment within 5 years starting from July 1,1998 as the date of contract. Joint Venture BCKT (Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd., Kumagai Gumi Co., Ltd. and Tokyu Construction Co., Ltd.) The parent company had loan to the joint venture in the approximated amount of Baht 45.5 million as at December 31, 1999 and 1998. In addition, the joint venture still has loan from other joint ventures in foreign currency in approximate amount of Yen 1,319 million and Germany Mark 8.88 million with interest rate of 2% per annum. All loan had scheduled full repayment within the beginning of year 2000. When the repayment was due, the joint venture had postponed the repayment schedule to be within May 2001. Pathum Thani Water Supply Company Limited The parent company had loan to Pathum Thani Water Supply Company Limited without loan agreement, certain repayment schedule and collateral. According to the company's Executive Board of Director's Meeting No.11/1999 held on December 7, 1999 which had unanimous resolution to accept the transfer of loan and accrued interest income from related company-CH. Karnchang Holding Co., Ltd.in the amount of Baht 187.9 million according to the proportion of additional shares which the company purchased in 1999. (Amounts :Baht) Loans to 1999 1998 Loan Policy of Related Parties - Joint Venture TWCK (Thames Water International (Thailand) Ltd. and CH. Karnchang Public Co., Ltd.) - 40,000,000 Market borrowing at rate Total - 40,000,000 11.5% up to 15.5% As at December 31, 1999 and 1998, the parent company had interest payable regarding to loan from the joint venture in approximate amount of Baht 5,287,397 and Baht 2,713,151, respectively. Joint Venture BBCD Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd. and Dyckerhoff & Widmann AG As at December 31, 1999 and 1998, the joint venture had loan from another participant in foreign currency in the amount of Germany Mark 23 million which the loan agreement scheduled full repayment in November 2000 with inter bank rate charge plus profit. In 1999, the joint venture paid interest at rate of 3.7 % per annum. 4. Other transactions. 1 Acquisition or selling of real estates or other assets In 1999 Acquisition transactions The company bought additional construction equipments from the Joint Venture CH. Karnchang Public Co., Ltd., Bilfinger and Berger Bauaktiengesellschaft, Tokyu Construction Co., Ltd. and CH. Karnchang Tokyu Construction Co., Ltd. by comparing with the price offered by other company. in the approximate amount of Baht 110.6 million in order to support the company project in the future. The management committee accepted this transaction as recorded in the minutes of the Executive Board of Director's Meeting No. 10/1999 held on November 11, 1999. This intertransaction contributed profit between each other in approximated amount of Baht 6 million. The company bought ordinary shares of Pathum Thani Water Co., Ltd. and Bangkok Concrete Industry Co., Ltd. from related company - CH.Karnchang Holding Co., Ltd. in the approximate amount of Baht 187.9 million and 94 million , respectively according to the resolution passed at the meeting of Executive Board of Directors. The company's financial advisor had expressed his opinion and supported the company for their fair value and the acquisition as reasonable transaction. Selling transaction The company sold construction equipment to the subsidiary - Construction Material Supply Co., Ltd. in the amount of Baht 16 million by monthly installments for 3 years commencing from the date on which the company had submitted all assets in May 1999 but the right will be transferred upon completion of monthly installments as stated in the agreement dated April 30, 1999. The company had profit from selling of the said equipment in the approximate amount of Baht 7 million. 2 Management Contract In 1999 Parent company The company had significant technical service agreement in addition to the other service provided to the related joint venture associated with related company - B C Post -Tensioning Co., Ltd. in the approximate amount of Baht 12 million. Joint Ventures Joint ventures had significant transactions with related parties included in the consolidated financial statements according to the proportion of holding by the parent company as follows Joint Venture CH. Karnchang Public Co., Ltd. Bilfinger and Berger Bauaktiengesellschaft, Tokyu Construction Co., Ltd. and CH. Karnchang - Tokyu Construction Co., Ltd. Joint venture had transaction with another participant such as wage in amount of Baht 21,051,594, technical service fee in amount of Baht 18,981,580 , design service in amount of Baht 21,479,632 , and management fee in amount of Baht 22,760,546. Joint Venture TWCK (Thames Water International (Thailand) Ltd. and CH. Karnchang Public Co., Ltd.) The joint venture had management fee charged by the parent company in the approximate amount of Baht 12,747,000 Joint Venture BBCD Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd. and Dyckerhoff & Widmann AG The joint venture had management fee charged by the parent company in the approximate amount of Baht 22,170,000 and by other participants in the approximate amount of Baht 17,723,335. Joint Venture BCKT (Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd., Kumagai Gumi Co., Ltd. and Tokyu Construction Co., Ltd.) The joint venture had management fee charged by the parent company in the approximate amount of Baht 27,600,000, and technical service from other participants and related company in the amount of Baht 228,502,530. 3 Guarantee and collateral As at December 31, 1999, The company and subsidiary company guaranteed or collateral to the joint venture by proportion of holding by the company as follows: Parent company Joint Venture CH. Karnchang Public Co., Ltd. Bilfinger and Berger Bauaktiengesellschaft, Tokyu Construction Co., Ltd. and CH. Karnchang - Tokyu Construction Co., Ltd. Loan and guarantee from banks in limit of Baht 2,250 million and Baht 5,120 million, respectively. In addition, the company also pledged its investment in Bangkok Expressway Public Company Limited in amount of Baht 623.41 million( fair value ) as the performance guarantee with bank. Joint Venture BBCD (Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd. and Dyckerhoff & Widmann AG) All credit facility with banks and financial institutions was in amount of Baht 7,152.3 million. Joint Venture BCKT (Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd., Kumagai Gumi Co., Ltd. and Tokyu Construction Co., Ltd.) Loan from a bank in amount of Baht 500 million of which repayment will be due in 2001. Letter of credit in limit of Baht 125 million, and foreign exchange hedging in limit of Yen 1,130 million. Pathum Thani Water Co., Ltd. The company pledged its investment in Pathum Thani Water Co., Ltd. for Baht 80.64 million (by equity method) as collateral for loan from bank which is in the approximate amount of Baht 3,800 million as at December 31, 1999. Subsidiary Company The subsidiary company pledged its investment in Bangkok Expressway Public Co., Ltd. in amount of Baht 176.7 milllion (fair value) as the performance guarantee with bank for Joint Venture BCKT (Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd., Kumagai Gumi Co., Ltd. and Tokyu Construction Co., Ltd.) 4. Others 1999 Joint Venture Joint Venture BCKT (Bilfinger and Berger Bauaktiengesellschaft, CH. Karnchang Public Co., Ltd., Kumagai Gumi Co., Ltd. and Tokyu Construction Co., Ltd.) In 1999, the joint venture had changed the deal of its construction contract of tunnel boring project from Rama IX station to Sirikit station by subcontracting the part of work to Kumagai Gumi Co., Ltd. to construct the said work according to the resolution of the joint venture's board of directors meeting dated March 4, 1999 which stated that its participants can be granted construction work by the joint venture under the existing budget of the project. The subcontract pricing conditions are fixed lump sum in amount of Baht 660,792,262 and Yen 1,811,205,561 (excluding value added tax). The payment will follow the schedule indicated in the contract. NOTE 3 - BASIS OF CONSOLIDATED FINANCIAL STATEMENTS 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 it's subsidiaries. The consolidated financial statements for the years ended December 31, 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% Bangkok Concrete Industries Company Limited 49.99%(in 1999) 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% Percentage Holding by Parent Company or Percentage of profit sharing in Joint Ventures 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 CKSL (CH. Karnchang Public Co., Ltd. and SNC-LAVALIN Inc) 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 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 per contract dated March 14, 1994, which had been completed and submitted to the employer in 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 per contract dated September 27, 1996, which the first stage had been completed and submitted in 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 per contract dated April 17, 1997, which the first stage had been completed and submitted in 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 per 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 Wong 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 per contract dated November 21, 1995, which construction work plan had been completed and submitted in 1999. Joint Venture CKSL (CH. Karnchang Public Co., Ltd. and SNC-LAVALIN Inc) CK. Karnchang Public Co., Ltd. in joint with SNC-LAVALIN Inc. to design, manufacture, supply and installation of track works according to contract dated October 15, 1999 which the project will be completed within 161 weeks starting from the dated indicated in letter of intent issued by employer which has not been specified yet. 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 per 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 the initial underground transit section from Hua Lamphong to Bang-Su as per 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 per 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 according to 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 per contract dated August 14, 1997. As at December 31, 1999 the joint venture had an additional construction and had received revenue in excess of the contract value in the approximated amount of Baht 28.15 million. A certain portion of construction value had not been covered by the contract. The joint venture submitted its completed work in 1999. 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. 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 debt The company estimated allowance for doubtful debt by management evaluation of expected loss from account receivable. The evaluation is based on account receivable' s financial status and its payment in the past together with economic situation in Thailand. 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 , Supplies in process and Construction in Progress Supplies for construction and inventory are valued at cost using first-in-first-out method. Supplies in process and construction in progress are valued at cost Construction in progress comprises of the cost of materials and labor, subcontractor charges, services and overheads. Investment Investment in subsidiaries, associated 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. Goodwill Goodwill are recorded at cost of acquisition which is in excess of fair value of assets and liabilities which is to be specific of company. Goodwill are amortized on straight line method for 20 years. The company record excess fair value over cost of goodwill as revenue in 1999. Property, Plant and Equipment Property plant and equipment are recorded at fair value if the prices are significant different from book value and stated at cost after deducting allowance for impairment. Depreciation are computed by the straight-line method over the estimated useful lives as follows: Building 20 years Equipment 5 years Leasehold according to contract period Leasehold improvement according to remaining project life Tunnel Boring Machines are stated at cost. Depreciation is computed based on the completed boring distance against the total project work distance. Allowance for impairment was estimated from refundable value of assets. Investment on land Investment on land was recorded in fair value if it is significantly different from net book value and stated at cost after deducting allowance for impairment. Foreign Currency Transactions Foreign currency transactions during the year 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. Basic earnings (Deficits) per Share Basic earnings (Deficits) per share are calculated by dividing the net profit (loss) for the years by the number of shares outstanding at the end of years. Basic earnings (deficit) per share Consolidate CH.Karnchang Public Co.,Ltd. 1999 1998 1999 1998 (more)