For the year ended December 31, 1999, the company has adopted the Thai Accounting Standard No.40 Accounting for
Investments in Debt and Equity Securities. The adoption of this standard has not been adjusted to the prior financial statements.
3.6.1 Investments in related companies
Investments in associated companies are recorded under the equity basis.
3.6.2 Investments in other companies
Securities available for sales are carried at fair value less allowance for impairment of investments (if any). The
differences between book values and fair value are presented as unrealized gain or loss in the shareholders' equity.
Other investments are stated at cost, less allowance for impairment in value (if any)
Cost of short-term and long-term investments sold during the period were computed by the weighted average method.
For the year ended December 31, 1999, under Thai Accounting Standard No.12 Accounting for marketable securities
and No. 17 Accounting for investments, investments in marketable securities were stated at the lower of aggregate cost or market
value. Other securities which are held for investment purpose are stated at cost less provision for anticipated loss. Temporary
loss is recorded in the shareholders' equity section. The decline in the book value considered other than temporary is recognized
as expense.
3.7 Capitalization of Interest
Borrowing costs are capitalized as cost of assets that the company has incurred borrowing cost on assets that required a
period of time to get them ready for sale. Capitalization of borrowing cost will stop when such assets are ready for their
intended use.
3.8 Corporate Income Tax
The company recognized total corporate income tax as expenses in the occurring period.
3.9 Earnings (Loss) per share
Earnings (Loss) per share are determined by dividing net profit (loss) by the number of shares outstanding at the end of the
period.
4. CASH IN HAND AND AT BANKS
1999 Baht 1998
Cash 111,575.00 100,727.75
Current accounts 3,220,244.74 325,997.81
Savings deposit 4,666,088.32 260,427.44
----------------- -----------------
Total 7,997,908.06 687,153.00
----------------- -----------------
- 3 -
5. SHORT-TERM INVESTMENTS
1999 Baht 1998
Cash at banks 3,280,192.97 3,280,192.97
Deposits with financial institutions 0.00 51,900,000.00
Temporary investments 33,181,761.50 12,230,245.04
Total 36,461,954.47 67,410,438.01
----------------- -----------------
Temporary investments consists of :
Baht
1999
Available for sale Other securities Total
Equity securities 2,131,475.00 0.00 2,131,475.00
Equity securities - investment units 0.00 31,050,286.50 31,050,286.50
---------------- ----------------- -----------------
Total 2,131,475.00 31,050,286.50 33,181,761.50
---------------- ----------------- -----------------
1998
Available for sale Other securities Total
Equity securities 2,230,245.04 0.00 2,230,245.04
Equity securities - investment units 0.00 10,000,000.00 10,000,000.00
---------------- ----------------- -----------------
Total 2,230,245.04 10,000,000.00 12,230,245.04
---------------- ----------------- -----------------
6. ACCOUNTS AND NOTES RECEIVABLE
The company's delinquent accounts receivable amount of 145 and 85 receivables in 1999 and 1998, respectively, classified
by aging are as follows :
1999 Baht 1998
Over 3 months - 6 months 19,376,525.78 37,064,497.62
Over 6 months - 12 months 830,734.15 8,394,531.50
Over 12 months 16,289,310.46 16,170,976.20
----------------- -----------------
Total 36,496,570.39 61,630,005.32
----------------- -----------------
The company provided the allowance for doubtful accounts amount of Baht 28,131,933.79 in 1999 (In 1998, the amount was
Baht 28,131,933.79)
7. INVENTORIES
1999 Baht 1998
Finished goods 301,874,473.13 297,818,224.43
Work in process 16,061,781.81 14,198,208.75
Raw materials 97,262,836.30 90,184,472.12
Supply used 44,950,884.01 38,695,208.66
Goods in transit 3,203,404.35 2,114,190.56
----------------- -----------------
Total 463,353,379.60 443,010,304.52
----------------- -----------------
- 4 -
8. INVESTMENTS IN RELATED COMPANIES
1999 Baht 1998
Investments in associated companies 15,589,149.95 15,308,186.64
Long - term investment 10,250,000.00 10,250,000.00
----------------- -----------------
Total 25,839,149.95 25,558,186.64
----------------- -----------------
8.1 Investments in associated companies consist of :
1999
Type of Paid-up Holding Cost Equity
Business Capital % Method Method
Baht Baht Baht
Associated companies
Tekno Cer S.R.L Supplier 428,000.00 45.00 192,600.00 192,600.00
Co., Ltd.
Cermas Co., Ltd. Sale of feldspar and soil 8,000,000.00 21.55 1,224,500.00 0.00
UMI Property Co., Ltd. Real estate 150,000,000.00 37.57 56,350,000.00 0.00
Ruampat Ceramic Ceramic Agent 20,000,000.00 49.00 9,800,000.00 15,396,549.95
Co., Ltd.
-------------- --------------
Total investments in associated companies 67,567,100.00 15,589,149.95
-------------- --------------
1998
Type of Paid-up Holding Cost Equity
Business Capital % Method Method
Baht Baht Baht
Associated companies
Tekno Cer S.R.L Supplier 428,000.00 45.00 192,600.00 192,600.00
Co., Ltd
Cermas Co., Ltd. Sale of feldspar and soil 8,000,000.00 21.55 1,224,500.00 169,163.18
UMI Property Co., Ltd. Real estate 150,000,000.00 37.57 56,350,000.00 1,146,109.23
Ruampat Ceramic Ceramic Agent 20,000,000.00 49.00 9,800,000.00 13,800,314.23
Co., Ltd.
-------------- --------------
Total investments in associated companies 67,567,100.00 15,308,186.64
-------------- --------------
Investment in Tekno Cer S.R.L. Co., Ltd. is valued at cost method, because of insufficient information to state under
equity method. Such investment has no material to the position and the results of company's operation.
For the three associated companies financial statements for the year ended December 31,1999 and 1998, brought into
the computation of investment under equity method, were taken from unaudited financial statements by other auditors.
- 5 -
8.2 Long - term investment was represented as equity securities consist of :-
1999
Type of Paid-up Holding Cost
Business Capital % Method
UMI-Laufen Producer of Sanitaryware 430,000,000.00 11.04 33,065,650.21
Sanitaryware Ltd.
Less Provision for diminution in value of investments (33,065,650.21) 0.00
--------------
Siam Art Ceramic Seller of Ceramic 110,000,000.00 7.50 8,250,000.00
Co., Ltd.
Surf Dynamics Co., Ltd. Water Sports Equipment 14,000,000.00 14.28 2,000,000.00
--------------
Total investments in other companies 10,250,000.00
--------------
1998
Type of Paid-up Holding Cost
Business Capital % Method
Baht Baht
Other companies
UMI-Laufen Producer of Sanitaryware 430,000,000.00 11.04 33,065,650.21
Sanitaryware Ltd.
Less Provision for diminution in value of investments (33,065,650.21) 0.00
--------------
Siam Art Ceramic Co.,Ltd. Seller of Ceramic 110,000,000.00 7.50 8,250,000.00
Surf Dynamics Co.,Ltd. Water Sports Equipment 14,000,000.00 14.28 2,000,000.00
--------------
otal investments in other companies 10,250,000.00
--------------
Investment in UMI-Laufen Sanitaryware Ltd. had net aggregate book value lower than cost approximately of Baht 251.70
million as at December 31, 1998, according to the latest audited financial statements. As at December 31, 1999, the company
provided the allowance for diminution in value of investments of Baht 33,065,650.21 (in 1998, Baht 33,065,650.21). The
company believed that the diminution in value of investment is impermanent and its operation will be recovered in the near
future. In addition, the meeting will be held the increase share capital from Baht 430 million to Baht 550 million.
9. DEPOSITS WITH COMMITMENT
In 1999, fixed deposit of Baht 30,000,000.00 (In 1998, Baht 30,011,000.00) is used as collateral for bank overdraft and
loans from bank as mentioned in note no.13 and for bank's issuance of letter of guarantee to the Metropolitan Power Authority
for electricity charge.
- 6 -
10. PROPERTY, PLANT AND EQUIPMENT - NET
1999 Baht 1998
Land 154,135,301.52 154,135,301.52
Appraisal surplus of land 207,515,676.00 266,102,532.00
Building 617,199,532.43 617,199,532.43
Machinery 1,861,465,327.06 1,860,644,522.98
Tools 86,736,033.94 83,794,079.98
Furniture and office equipment 50,989,559.16 49,128,988.96
Vehicles 25,832,203.67 24,760,825.67
Office improvement and fixture 29,156,439.96 28,953,086.96
----------------- -----------------
Total 3,033,030,073.74 3,084,718,870.50
Less Accumulated depreciation (2,089,632,511.78) (1,914,518,209.78)
Provision for loss from impairment of assets (16,299,397.74) 0.00
----------------- -----------------
Total 927,098,164.22 1,170,200,660.72
----------------- -----------------
Project under construction - expansion part at 7th plant
Building under construction 190,075,577.39 188,984,668.31
Machinery, furniture and fixture and equipment under installation 177,876,090.75 177,983,874.83
----------------- -----------------
Total 367,951,668.14 366,968,543.14
Less Provision for loss from impairment of assets (7,245,977.39) 0.00
Total project under construction - expansion part 360,705,690.75 366,968,543.14
----------------- -----------------
Property, plant and equipment - net 1,287,803,854.97 1,537,169,203.86
----------------- -----------------
Depreciation for the fiscal year 175,877,777.84 220,247,807.51
Property, plant and equipment at book value, beginning of the period 3,084,718,870.50
Add Increased during the period 7,675,847.83
Less Decreased during the period (59,364,644.59)
-----------------
Property, plant and equipment at book value, ending of the period 3,033,030,073.74
-----------------
Project under construction - expansion part at 7th plant
at book value, beginning of the period 366,968,543.14
Add Increase during the period 1,723,929.08
Less Transfer during the period (740,804.08)
-----------------
Project under construction - expansion part at 7th plant
at book value, end of the period 367,951,668.14
-----------------
- 7 -
Land including its building and part of machinery are mortgaged as collateral for bank overdrafts, loans from banks and
long-term loans as mentioned in notes 13 and 14.
In 1999, the company reappraised the land by Charterred Property Consultants Co.,Ltd., an independent appraiser, according
to the report dated on February 28, 2000. The current appraisal value of land is devalued amount of Baht 58,586,856.00. After
deducting to the appraisal surplus of land of Baht 266,102,532.00 in 1996, the remaining balance of the appraisal suplus of land
would be Baht 207, 515,676.00 shown in the shareholders' equity.
The company recorded interest expense incurred from loans to purchase new machinery as a part of cost of machinery
amounting to Baht 12,725,821.92 for three months ended March 31, 1998.
In the third quarter of the year 1998, the company has suspended the project under construction of expansion part of
the seventh plant causing from the volatility of economy as mentioned in note 1 and the slowdown in growth of real
estate business. However, the company expects to take benefit from such construction project in the future when the economic
is recovered.
11. DEPOSIT
1999 Baht 1998
Deposit for purchasing machinery 0.00 45,697,474.19
Other deposits 773,400.00 697,800.00
------------- --------------
Total 773,400.00 46,395,274.19
------------- --------------
Deposit for purchasing machinery from overseas have value at LIT 32,000 million or Baht 672 million. The company has
already paid the deposit at 15% of machinery value or amount of Baht 45,782,250.00 (LIT 4,800 million) recorded such amount
in deposit for machinery. Due to the economic volatility as stated in note 1, therefore the company has suspended to purchase
the machinery. In 1999, the company has recorded loss from non-refundable deposits shown as expenses in the statements of income.
12. OTHER ASSETS
1999 Baht 1998
Advance payment - share investment 1,251,900.00 1,251,900.00
Concession fee - net 586,979.08 731,344.60
Deferred expenses 2,128,333.34 2,117,222.30
------------- --------------
Total 3,967,212.42 4,100,466.90
------------- --------------
13. BANK OVERDRAFTS AND LOANS FROM BANK
1999 Baht 1998
Bank overdrafts 57,940,537.29 70,705,074.48
Loans from banks 363,680,008.24 370,810,708.24
------------- --------------
Total 421,620,545.53 441,515,782.72
------------- --------------
As at December 31, 1999 and 1998, the company had overdraft lines of Baht 122 million and Baht 122 million, respectively,
at the interest of 8.75-11.50% and MOR+2% per annum and the interest rate of loans from banks are applied of 10.25-12.25%
per annum and 8.65-30.00% per annum, respectively.
Bank overdrafts and loans from bank are guaranteed by fixed deposits as stated in note 9, and by mortgaging land,
building and part of machinery as collateral, as described in note 10.
- 8 -
14. LONG-TERM LIABILITIES
1999 Baht 1998
Long-term loans of Baht 1,000 million 280,000,000.00 280,000,000.00
Long-term loans of US$ 20 million 754,196,000.00 737,800,000.00
Less Current portion of long - term debt (781,066,600.00) (460,278,000.00)
--------------- ---------------
Total 253,129,400.00 557,522,000.00
--------------- ---------------
In September 1997, the company had long-term loans from banks and financial institutions amounting to Baht 1,000 million
at the interest rate of 11.00-13.75% and MLR+0.5% per annum and US$ 20 million at the interest rate of SIBOR+1.75% and
LIBOR+2.5% per annum. Such long-term loans are guaranteed by mortgaging land, building and part of machinery (in note 10)
and assigned the benefits received from insurance policy to lenders which has certain limitation specified in the agreements.
On December 24, 1997, the company entered into the amendment of loans agreement by reducing the amount of loans to
Baht 280 million which equal to the gradually withdrawn with the average interest rate of bank's standard plus 3% and 4% per
annum. The repayment of principal was made on semi-annually through 10 instalments of Baht 28 million each, beginning on
September 30, 1998.
On March 6, 1998, the company entered into the amendment of loans agreement of US$ 20 million by changing interest rate
to LIBOR/SIBOR+4.5% per annum. The repayment of loans was made on semi-annually through 6 instalments of US$ 3.4 million
each, beginning on September 2, 1998.
On September 8, 1998, the bank proposed to extend term of principal repayment granted for one year by calculating interest
of LIBOR/SIBOR+ 6% per annum. These extension resulted the first instalment due in September 1999. However, until the date of
this report the company has not yet made such payments upon the new agreement and the company is under the process of
debt restructuring
15. Unrealized (gain) loss from changing fair value of investments
1999
Baht
Beginning of the period 0.00
Increase (Decrease) during period 1,173,000.00
End of the period 1,173,000.00
16. LEGAL RESERVE
According to the Public Companies Act, the company has appropriated its reserve as a legal reserve not less than 5% of the
annual net profit deducted by the total accumulated deficit brought forward (if any) until the reserve reaches an amount not less
than 10% of the authorized share capital.
17. PROVIDENT FUND
The company established contributory registered provident fund in accordance with the Provident Fund Act B.E. 2530 (1987).
18. TRANSACTIONS WITH RELATED COMPANIES
The financial statements include transactions incurred with related companies. These transactions are recorded based on a
mutually determined basis in the ordinary commercial transaction. The intercompany significant transactions with related companies
during the period are as follows:
- 9 -
1999 Baht 1998
Accounts receivable 138,173,497.97 98,023,956.22
Accounts payable 25,773,715.99 9,506,608.61
Purchases - net 107,832,382.83 98,689,078.17
Sales - net 404,637,357.82 364,738,277.52
19. PROMOTIONAL PRIVILEGES
For the company's production expansion, the company was granted certain rights and privileges on production of the fifth
plant as a promoted industry under the Investment Promotion Act. B.E. 2520 including exemption from customs duty and
business tax on imported raw materials and supplies (5 year for export) and has also obtained a permission to deduct 5% of the
increased income over the previous year, derived from export for 10 years, commencing from the date of income earning.
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