Bank overdrafts and loans from bank were guaranteed by fixed deposit as stated in note 8 and mortgaged by
land, building and part of machines as collateral as stated in note 9.
13. LONG-TERM LIABILITIES
Parent Company (Baht)
September 30, 2000 December 31, 1999
Long - term loans of Baht 1,000 million 280,000,000.00 280,000,000.00
Long - term loans of US$ 20 million 840,244,000.00 754,196,000.00
Less Default on current portion of long - term debt (1,120,244,000.00) 0.00
Current portion of long - term debt 0.00 (781,066,600.00)
Total 0.00 253,129,400.00
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+0.50% per annum and US$ 20 million at the interest
rate of SIBOR+1.75% and LIBOR+2.50% per annum. Such long - term loans are guaranteed by mortgaging land,
building and part of machinery (in note 9) and assigned the benefits received from insurance policy to lenders
which has certain limitation specified in the agreements.
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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of loans to Baht 280 million which equal to the gradually withdrawn with the average interest rate of bank's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 installments
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+4.50% per annum. The repayment of loans was made on semi-annually through
6 installments of US$ 3.40 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 installment due in
September 1999. As at September 30, 2000, the company was sued for defaluted on debt repayment accrued interest
expenses of Baht 88,823,610.77 as stated in note 20.2. The lawsuit has not been finalized yet and the management
expects that the case is negotiable.
14. UNREALIZED GAIN (LOSS) FROM CHANGING FAIR VALUE OF INVESTMENTS
Parent Company (Baht)
September 30, 2000 December 31, 1999
Beginning of the period 1,173,000.00 0.00
Changes during the period (1,316,125.00) 1,173,000.00
End of the period (143,125.00) 1,173,000.00
15. 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.
16. PROVIDENT FUND
The company established contributory registered provident fund in accordance with the Provident Fund
Act B.E. 2530 (1987).
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17. 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:
September 30, 2000 September 30, 1999 December 31, 1999
Accounts receivable 217,915,674.66 138,173,497.97
Accounts payable 18,492,224.31 25,773,715.99
Purchases - net 84,235,621.74 77,081,475.36
Sales - net 423,633,113.45 286,548,400.58
18. 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. The income from export of that year must not be less than
revenues from the average of export sales over the previous three years period except for the first two years.
Moreover, the promoted products in the fifth plant from the date of income earning, will be exempted on
business tax 90% of normal rate for the period of 5 years, and exempted on corporate income tax for 5 years
(for export sales only) and 6 years of each type of product.
After the promotion is expired, the company will begranted corporate income tax reduction at 50% of normal
rate for 5 years.
The shareholders will gain benefit from tax-exempted on dividend received from the company (from the stated
exemptions). The dividend will not be lived over the period of the company's income tax exemption.
19. SEGMENT FINANCIAL INFORMATION
The company engages in manufacturing of floor, wall tile, kitchen equipment and supplementary food.
The details relating to the company's operations are segmented according to business for the three and nine months
ended September 30, 2000 and 1999, as follows :
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Baht
Parent financial statements for the period of July - September 2000
Floor and wall tile Sanitary product Other Total
Business Business
Sales - net 383,718,334.35 8,672,468.12 6,267,367.92 398,658,170.39
Less Cost of sales (281,154,095.13) (6,271,307.36) (1,453,224.74) (288,878,627.23)
Gross profit 102,564,239.22 2,401,160.76 4,814,143.18 109,779,543.16
Profit (Loss) from operation (3,573,638.92)
Equity gain (loss) on investments - net (2,250,061.19)
Interest expenses (59,985,510.80)
Net profits (loss) (65,809,210.91)
Baht
Parent financial statements for the period of July - September 1999
Floor and wall tile Sanitary product Other Total
Business Business
Sales - net 320,479,216.50 12,452,768.10 0.00 332,931,984.60
Less Cost of sales (270,255,120.76) (8,364,355.38) 0.00 (278,619,476.14)
Gross profit 50,224,095.74 4,088,412.72 0.00 54,312,508.46
Profit (Loss) from operation (88,311,402.90)
Equity gain (loss) on investments - net 7,832,820.70
Interest expenses (35,760,572.41)
Net profits (loss) (116,239,154.61)
Baht
Parent financial statements for the period of January - September 2000
Floor and wall tile Sanitary product Other Total
Business Business
Sales - net 1,130,456,051.00 36,023,623.22 9,842,029.02 1,176,321,703.24
Less Cost of sales (936,792,506.01) (26,547,134.81) (2,487,990.23) (965,827,631.05)
Gross profit 193,663,544.99 9,476,488.41 7,354,038.79 210,494,072.19
Profit (Loss) from operation (36,254,538.69)
Equity gain (loss) on investments - net (4,920,572.90)
Interest expenses (150,540,146.92)
Net profits (loss) (191,715,258.51)
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Baht
Parent financial statements for the period of January - September 1999
Floor and wall tile Sanitary product Others Total
Business Business
Sales - net 889,032,793.42 16,140,127.83 0.00 905,172,921.25
Less Cost of sales (835,347,616.76) (11,456,256.61) 0.00 (846,803,873.37)
Gross profit 53,685,176.66 4,683,871.22 0.00 58,369,047.88
Profit (Loss) from operation (159,056,437.01)
Equity gain (loss) on investments - net (10,354,780.58)
Interest expenses (109,855,507.84)
Net profits (loss) (279,266,725.43)
20. CONTINGENT LIABILITIES
20.1 As at September 30, 2000 and December 31, 1999, the company has contingent liabilities for bank guarantees
approximately Baht 9.29 million and Baht 11.70 million, respectively. In 1999, the company has unused letter
of credit of Baht 4.40 million.
20.2 The company was sued by six financial statements for defaulted on debt repayment for principal and accrued
interest expense totalling of Baht 1,603,235,022.21. The Lawsuits has not been finalized yet and the
management expects that this case is negotiable.
21. RECLASSIFICATION ACCOUNTS
Certain accounts included in the financial statements for the year 1999 have been reclassified for a comparison
purpose with the financial statements as at September 30, 2000.
22. Y2K ISSUE ON THE COMPANY'S OPERATION (UNAUDITED)
The company purchased software used for management and report preparation from the vendors which have
long experience in develop and install computer program. The company is testing the aforementioned program which
the vendor confirmed that the issue will not create Y2K problem. Although the company expects to solve its
computer system within the year 1999, the company is concerned that its trading company could not solve the issues
in time. However, the company expects that there is no materiality on the company's operation of which cannot be
presently determined.
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23. EFFECTS OF CHANGE IN ACCOUNTING METHOD
23.1 In 1999, The company has changed the accounting method of recording of factory maintenance expenses from
deferred expenses to operating expenses in their occurring period to conform with the new accounting standards
of the Framework and interpretation of Impairment of assets - expenses of undeveloped and developing
businesses have been recorded as assets. The company has retroactively adjusted the financial statements for the
three and nine months ended September 30, 1999 that have been taken for comparative purpose.
From the aforementioned change in accounting policy, consequently net assets would decrease
by Baht 4,049,139.62 as of December 31, 1999 and net loss would increase by Baht 1,286,395.45 and Baht
4,750,420.85 for the three and nine months ended September 30, 1999, respectively.
23.2 The cumulative change in accounting policy of consolidated financial statements and Accounting for
investments in subsidiaries is applied in the third quarter of 2000. The company has changed accounting
for investments in subsidiaries in accordance with Accounting Standard No. 44 Consolidated Financial
Statements and Accounting for Investment in Subsidiaries by taking financial statements of all companies
into consolidated financial statement. Such companies are under control by the parent company, though, the
parent company has voting right less than half. Before, the parent company prepared consolidated financial
statements by including the company that the parent company has shareholding more than 50 per cent of
registered capital of those companies. The company, therefore, made retroactive adjustment in the financial
statements of third quarter for the year 1999 by representing cumulative change in those financial statements.
Consequence of the aforementioned change in accounting policy are as follows :
The financial statements of parent company as at September 30, 2000, represented a decrease in assets by
Baht 0.26 million, an increase in deficit by Baht 1.05 million as at December 31, 1999, and decreases in net loss
for the three and nine months by Baht 0.17 million and Baht 0.79 million, respectively.
The consolidated financial statements of the company as at September 30, 2000, represented net increases
in assets by Baht 716.64 million, liabilities by Baht 494.60 million, minority interest by Baht 221.69 million and
decrease in net loss by Baht 0.79 million.
24. OTHERS
24.1 The company was registered as Public Company Limited.
24.2 The company's head office is located at 65 Chamnan Phenjati Business Center, 29th Fl., Rama 9 Rd., Huaykwang
Bangkok 10320. The location of two branches are as follows :
Branch : 1st site at 54/1 Suwannasorn Road, Tumbol Kokeyae, Nongkhae District, Saraburi.
: 2nd site at 54 Moo1, Tumbol Phaitum, Nongkhae District, Saraburi.
24.3 The company engages in Producing and Distributing of floor, wall tile, kitchen equipment and supplementary food.
24.4 The company has staff in the amount of 1,600 as at September 30, 2000 and December 31, 1999.
