4 -
3. SHORT TERM INVESTMENTS
Short term investments consist of the following:
1997 1996
Cash at banks 18,116,863 -
Deposits at financial institution 35,000,000 14,464,252
Investments in listed securities 1,003,760 7,365,650
Baht 54,120,623 21,829,902
Investments in listed securities consist of the following:
1997 1996
Cost Market Cost Market
Listed securities 17,487,568 1,003,760 24,903,894 7,365,650
Less Allowance for
diminution in
value of
investments (16,483,808) - (17,538,244) -
Baht 1,003,760 1,003,760 7,365,650 7,365,650
4. INVENTORIES
Inventories consist of the following:
1997 1996
Finished goods 344,568,152 251,211,810
Work in process 17,935,214 23,280,933
materials 108,048,680 92,508,678
Supplies 40,216,596 46,603,525
Goods in transit 9,859,699 14,090,247
Baht 520,628,341 427,695,193
…/5
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DEPOSITS USED AS COLLATERAL
Time deposits at bank of Baht 25,000,000 as at December 31, 1997 are used as collateral for
bank overdraft (See note 9)
6. INVESTMENTS IN RELATED COMPANIES
Investments in associated and other companies consist of the following:
1997 1996
Investments in associated companies 52,765,046 127,724,544
Investments in other companies 43,315,650 10,250,000
Baht 96,080,696 137,974,544
Investments in associated and other companies as at December 31, 1997 are as follows:
TYPE OF PAID-UP COST EQUITY
BUSINESS CAPITAL HOLDING METHOD METHOD
BAHT % BAHT BAHT
ASSOCIATED COMPANIES
Cermas Co., Ltd. Sale of feld,
spar and soil 8,000,000 21.55 1,224,500 619,635
Property Co., Ltd. Real estate 150,000,000 37.57 56,350,000 38,843,446
TEKNO CER S.r.l
Co., Ltd. Supplier 428,000 45.00 192,600 192,600
Ruampat Ceramic
Co., Ltd. Ceramic Agent 20,000,000 49.00 9,800,000 13,109,365
67,567,100 52,765,046
OTHER COMPANIES
- Laufen
Sanitaryware Ltd., Producer of
Sanitarywares 430,000,000 13.97 33,065,650 -
Siam Art Ceramic
Co., Ltd. Seller of Ceramic 110,000,000 7.50 8,250,000 -
Surf Dynamics Co., Ltd. Water Sports
equipment 14,000,000 14.28 2,000,000 -
43,315,650 -
investment in UMI - Laufen Sanitaryware Ltd., which for the year 1997 is included as
other company, the value shown is after adjustment for equity in undistributed net profit
(loss) in such company from the date of purchase to the date of part disposal such of the
investment.
For the year ended December 31, 1997, UMI - Laufen Sanitaryware Ltd. has incurred
substantial accumulated losses, and there is a capital deficiency, the major shareholder
agrees to provided additional financial support in the future, the company has plans to
expand the operations.
-
Investments in associated and other companies as at December 31, 1996 are as follows:
TYPE OF PAID-UP COST EQUITY
BUSINESS CAPITAL HOLDING METHOD METHOD
BAHT % BAHT BAHT
ASSOCIATED COMPANIES
Cermas Co., Ltd. Sale of feld,
spar and soil 8,000,000 21.55 1,224,500 677,565
Mining Co., Ltd. Producer of
feldspar 5,000,000 49.88 2,494,000 1,872,936
Property Co., Ltd. Real estate 150,000,000 37.57 56,350,000 55,684,830
TEKNO CER S.r.l
Co., Ltd. Supplier 428,000 45.00 192,600 192,600
- Laufen
Sanitaryware Ltd., Producer of
Sanitaryware 200,000,000 34.00 67,999,900 57,207,922
Ruampat Ceramic
Co., Ltd. Ceramic Agent 20,000,000 49.00 9,800,000 12,088,691
138,061,000 127,724,544
OTHER COMPANIES
Siam Art Ceramic
Co., Ltd. Seller of Ceramic 110,000,000 7.50 8,250,000 -
Surf Dynamics
Co., Ltd. Water Sports
equipment 14,000,000 14.28 2,000,000 -
10,250,000 -
For the years ended December 31, 1997 and 1996, equity in undistributed net profit (loss) of
associated companies which are included in the financial statements are as follows:
%
Net profit (loss)
1997 1996
Cermas Co., Ltd. (0.05) (0.13)
I Mining Co., Ltd. (0.10) (0.02)
I Property Co., Ltd. (16.76) (12.61)
I - Laufen Santitaryware Ltd. (9.82) (6.06)
Ruampat Ceramic Co., Ltd. (1.01) (0.54)
- 7 -
For investment in TEKNO CER S.r.l. Co., LTD. which the Company has a 45% holding,
Company has accounted for it by the cost method, because there is no adequate data
adjustment of equity and the investment has no material effect on the financial
position and the results of operations of the Company.
For the years ended December 31, 1997 and 1996, equity in undistributed net profit
(loss) of associated companies is computed from the financial statements for the same
year which have not been audited.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are as follows:
1997 1996
Land 154,135,302 154,135,302
Land-appraisal increase 266,102,532 266,102,532
Buildings 616,521,252 616,078,552
Machinery 1,863,114,523 1,865,515,206
Tools 79,762,720 72,741,489
Office furniture and fixtures 47,240,839 44,664,095
Vehicles 25,244,426 21,330,419
Office improvement 28,953,087 24,348,123
3,081,074,681 3,064,915,718
Less Accumulated depreciation (1,698,805,482) (1,462,571,945)
1,382,269,199 1,602,343,773
Building under construction 186,335,869 130,106,528
Machinery, furniture and equipment
under installation and in transit 146,578,284 53,236,055
Baht 1,715,183,352 1,785,686,356
Depreciation for the year Baht 240,968,241 245,161,489
.../8
-
Part of land, buildings and machinery are mortgaged as collateral for bank overdrafts,
loans from banks and long-term debt (see notes 9 and 10).
The Company capitalized interest expense incurred from the purchase of machinery as
part of the cost of fixed assets amounting to Baht 30,841,061 and Baht 8,068,835 for the
years ended December 31, 1997 and 1996, respectively.
8. OTHER ASSETS
Other assets consist of the following:
1997 1996
Advance for investment 1,251,900 1,251,900
Concession fee - net 875,710 1,020,076
Deferred charges - net 7,362,510 15,042,771
Baht 9,490,120 17,314,747
9. BANK OVERDRAFTS AND LOANS FROM FINANCIAL INSTITUTIONS
Bank overdrafts and loans from financial institutions consist of the following:
1997 1996
Bank overdrafts 58,773,249 26,976,435
Loans from banks 386,446,000 297,450,000
Loans from financial institutions 826,555 63,662,782
Baht 446,045,804 388,089,217
The Company has available overdraft facilities of Baht 122,000,000 and Baht
129,000,000 as at December 31, 1997 and 1996 respectively. These bank overdrafts
carry interest at 13.50-17.50% and 13.50-14.00% p.a. in 1997 and 1996, respectively.
Loans from banks carry interest at 9.91-17.15% and 6.18 - 17.50% p.a. in 1997 and
1996, respectively.
Bank overdrafts and loans from banks are secured by time deposits at bank, a mortgage
part of land, building and machinery (see note 5 and 7).
.../9
-
10. LONG-TERM DEBT
10.1 The long-term debt consists of the following:
1997 1996
Long-term loan due every 6 months
1997-2003 1,231,120,000 713,200,000
Less Current portion (351,380,800) (87,244,000)
Baht 879,739,200 625,956,000
10.2 The Company has long-term loans with the banks and the financial institutions
within the limit of Baht 1,500 million, carrying interest for Baht loans at 11.00-
13.75% p.a. and MLR+0.5% p.a. and for US$ loans at SIBOR+1.75% and
LIBOR+2.5% p.a. Agreements for the long-term loans mentioned in note 9.1
above require the Company to mortgage part of land, buildings and machinery
(see note 7) and to assign benefits from the insurance of the Company+s assets to
borrowers and also have certain restrictive clauses. The long-term loan due in
1997 is guaranteed by a bank.
The Company is in the course of amending the loan agreement for the credit line
Baht 1000 million and for the interest to average standard interest rate + 3% or
per year, the loan amount outstanding to be repayable six-monthly, at Baht
million per installment commencing on September 30, 1998.
11. LEGAL RESERVE
Under the Public Companies Act, the Company is required to set aside as a legal
reserve at least 5% of its net profit after accumulated deficit brought forward (if any)
until the reserve is not less than 10% of the authorized capital.
12. LOSS ON THE APPLICATION OF THE MANAGED FLOAT EXCHANGE SYSTEM
For the year ended December 31, 1997, loss on the application of the managed float
exchange system which was calculated by translating the assets and liabilities
denominated in foreign currencies into Baht as described in note 2.10 to the financial
statements is presented as an extraordinary item in the profit and loss statement
amounted to Baht 530,312,404.
.../10
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13. PROVIDENT FUND
The Company has a provident fund which is registered in accordance with the Provident
Fund Act B.E. 2530 (1987).
14. TRANSACTIONS WITH RELATED COMPANIES
portion of the Company's business is represented by transactions with its related
companies and the financial statements reflect the effects of these transactions on the
basis determined by the companies concerned. Main transactions and balances with
related companies consist of the following:
1997 1996
Baht Baht
Accounts receivable 116,500,818 89,133,475
Accounts payable 35,072,681 59,362,213
Purchases - net 203,143,281 199,958,490
Sales - net 410,812,044 339,093,936
15. INVESTMENT PROMOTION CERTIFICATE
For the Company's production expansion, it is granted rights and privileges for the
production of the fifth plant as a promoted industry under the Investment Promotion Act
B.E. 2520 (1977), including exemption from custom duties and business tax for raw
materials and supplies (for export for 5 years) and the Company is permitted to deduct
of revenues from export which is an increase over the prior year for 10 years from
date of the Company receiving operating revenues and such export revenues of each
year must not be less than the average export revenues for 3 previous years except for the
first 2 years.
Moreover, for each type of products which is promoted in the fifth plant, from the date of
Company receiving operating revenues, it will receive privilege for reduced business
at 90% of normal rate for 5 years for sale of such products and is exempted from
company income tax for 5 years (for export sales only) and 6 years, in accordance for
each type of products.
.../11
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After the end of such periods, the Company will receive a 50% reduction of the normal
rate of company income tax for 5 years.
Shareholders of the Company will be exempted from tax on dividend (for revenues
subject to the above exemption) which will be received during the period in which the
Company is granted exemption from company income tax.
The Company thus has to comply with certain conditions contained in the promotion
certificate.
16. CONTINGENCIES
The Company has contingent liabilities to banks for letters of guarantee issued on its
behalf amounting to approximately Baht 10.2 million as at December 31, 1997 and 1996.
