- 8 - 7. UNBILLED INCOME In Thousand Baht 1998 1997 Income recognition up to December 31 (include VAT) 15,354 124,639 Less amount dued 6,028 30,199 allowance for doubtful accounts 373 - Unbilled income -Net 8,953 94,440 8. INVESTMENTS IN SHARES OF SUBSIDIARIES - Equity Method For the Company In Thousand Baht Percentage Business of Paid-up Investment 1998 Type Holdings Shares At Cost At Equity Dividend Central Realty Service Co., Ltd. (2) 99.99 1,000 1,000 74,284 95,000 Lang Suan Realty Co., Ltd. (3) 99.99 150,000 150,000 111,807 - Central Food Avenue Co., Ltd. (4) 99.99 1,000 1,000 13,804 - Focus Holding Co., Ltd. (1) 99.99 800,000 800,000 694,468* - Central Pattana Chiang Mai Co.,Ltd.(1) and (4) 99.99 1,000,000 999,999 956,444 - Central Pattana Ko Raj Co., Ltd. (1) 99.99 200,000 199,999 70,652* - Food Novelties Co., Ltd. (5) 99.99 25,000 25,000 20,896 - Coffee Partners Co., Ltd. (5) 99.99 40,500 40,499 29,316 - Central Pattana Khon Kaen Co., Ltd. (1) 78.13 260,000 203,149 139,494* - Central Pattana Chonburi Co., Ltd. (1) 60.00 315,100 189,084 188,318* - Central Pattana Nine Square Co., Ltd. (1) 60.00 402,000 241,200 238,956* - Namsap Pattana Co., Ltd. (1) 50.00 100,000 324,926 360,235 - Total 3,175,856 2,898,674 95,000 - 9 - In Thousand Baht Percentage Business of Paid-up Investment 1997 Type Holdings Shares At Cost At Equity Dividend Central Realty Service Co., Ltd. (2) 99.99 1,000 1,000 152,706 - Lang Suan Realty Co., Ltd. (3) 99.99 150,000 150,000 134,827 - Central Food Avenue Co., Ltd. (4) 99.99 1,000 1,000 15,568 - Focus Holding Co., Ltd. (1) 99.99 100,000 100,000 99,819* - Central Pattana Chiang Mai Co., Ltd. (1) and (4) 99.99 475,000 474,999 454,104 - Central Pattana Ko Raj Co., Ltd. (1) 99.99 200,000 199,999 190,405* - Food Novelties Co., Ltd. (5) 69.99 1,000 700 672* - Central Pattana Khon Kaen Co., Ltd. (1) 61.74 148,630 91,779 90,327* - Central Pattana Chonburi Co., Ltd. (1) 60.00 315,100 189,084 187,995* - Central Pattana Nine Square Co., Ltd. (1) 60.00 390,000 234,000 234,957* - Namsap Pattana Co., Ltd. (1) 50.00 100,000 324,926 395,430 - Total 1,767,487 1,956,810 - (1) Construction of shopping center buildings for rent. (2) Utilities service in shopping center. (3) Construction of condominiums and shop houses for rent. (4) Sales of food and beverage. (5) Produce, sales and import of food, biscuits and beverage. * Not yet started the intended business and/or temporarily stopped projects. - 10 - 9. INVESTMENTS IN SHARES OF RELATED COMPANIES - Cost Method Consolidated In Thousand Baht Direct and 1998 Indirect Allowance Percentage of for Holdings Cost Net Book Declining 1998 1997 1998 1997 Value in Value Bangna Central Property Co., Ltd. 19.99 19.99 107,946 107,946 44,654 80,960 Jewelry Holding Co., Ltd. - 17.20 - 2,869 - - Siam Retail Development Co., Ltd. 15.00 15.00 66,250 66,250 - 49,687 Square Ritz Plaza Co., Ltd. 12.00 12.00 15,000 15,000 14,933 11,250 Jewelry Realty Co., Ltd. - 13.65 - 117,869 - - Rachada Nonsee Department Store Co., Ltd. 19.00 19.00 68,966 68,966 45,224 - Ayudhaya Agrocity Co., Ltd. 11.85 11.85 50,397 50,397 39,107 25,199 Other investment 0.14 0.14 1,000 1,000 480 - Total 309,559 430,297 167,096 For the Company In Thousand Baht Direct and 1998 Indirect Allowance Percentage of for Holdings Cost Net Book Declining 1998 1997 1998 1997 Value in Value Bangna Central Property Co., Ltd. 19.99 19.99 107,946 107,946 44,654 80,960 Jewelry Holding Co., Ltd. - 17.20 - 2,869 - - Siam Retail Development Co., Ltd. 15.00 15.00 66,250 66,250 - 49,687 Square Ritz Plaza Co., Ltd. 12.00 12.00 15,000 15,000 14,933 11,250 Jewelry Realty Co., Ltd. - 13.65 - 117,869 - - Ayudhaya Agrocity Co., Ltd. 11.85 11.85 50,397 50,397 39,107 25,199 Other investment 0.14 0.14 1,000 1,000 480 - Total 240,593 361,331 167,096 Net book value of the investee companies based on audited financial statements for the year ended December 31, 1997. - 11 - 10. INVESTMENT IN LISTED SECURITY At the board of directors meeting held on March 31, 1997, the directors approved to change its investment policy in a portion of listed securities from short-term to long-term purposes starting from April 1, 1997. As at March 31, 1997, this investment had market value amounting to approximately Baht 19.75 million. Unrealized loss on this investment amounting to approximately Baht 18.75 million was presented under Shareholders Equity in balance sheets. In 1998, the Company disposed of the above investment. 11. CONDOMINIUM AND SHOPHOUSE FOR RENT Consolidated In Thousand Baht 1998 1997 Leasehold rights 56,533 55,267 Buildings under construction 94,117 99,872 Cost of interest 33,086 33,086 Furniture, fixture and office equipment 11,479 - Total 195,215 188,225 Less cost of condominium leasehold right sales - 114,665 accumulated depreciation 7,694 - Net 187,521 73,560 12. ASSETS FOR LEASE - At Cost and Appraised Value In Thousand Baht Consolidated For the Company 1998 1997 1998 1997 Land - Appraised value 775,041 780,363 - - - At cost 533,135 526,047 300,907 300,907 Land leasehold rights (Note 19.1) 915,421 914,270 640,815 640,815 Buildings and improvements 6,836,744 6,688,005 3,656,985 3,648,908 Vehicles 11,885 16,062 - - Construction in progress 87,910 70,696 31,693 9,552 Total 9,160,136 8,995,443 4,630,400 4,600,182 Less accumulated depreciation and amortization 1,698,659 1,322,015 1,172,214 1,007,953 Net 7,461,477 7,673,428 3,458,186 3,592,229 - 12 - A subsidiary (Namsap Pattana Co., Ltd.) adopts Statement No. 9 issued by the Institute of Certified Accountants and Auditors of Thailand which allows the revaluation of property, plant and equipment at appraisal amounts for financial statement reporting purposes. Land used in operations, as at December 31, 1993, previously carried at cost totalling approximately Baht 55.2 million, is now restated at appraised value totalling approximately Baht 835.6 million. The subsidiary appraised the said land based on the information guidelines provided by an independent appraiser. The revaluation increment in land totalling approximately Baht 115.3 million based on the Companys portion (net of minority interest) was credited to Revaluation increment in land shown under Shareholders Equity in the Consolidated Balance Sheets. Based on land survey in 1997, a portion of the subsidiarys land had been transferred to a related company. As a result, the revaluation increment decreased by approximately Baht 2.6 million. The revaluation increment in land is not available for dividend distribution. In 1998 and 1997, the subsidiaries capitalized interest on loans for the building construction and utilities system as cost of building and utilities system amounting to approximately Baht 43.5 million and Baht 245.6 million, respectively. As at December 31,1998 and 1997, the subsidiaries has commitments to pay for construction building, utilities system and other system, materials, building design supervisory and management fees for various projects amounting to approximately Baht 141.5 million and Baht 216.3 million, respectively. Depreciation and amortization expenses of assets for lease and furniture and office equipment for the consolidated financial statements for the years ended December 31, 1998 and 1997 amounting to approximately Baht 466.5 million and Baht 367.3 million, respectively. Depreciation and amortization expenses of assets for lease and furniture and office equipment for the Companys financial statements for the years ended December 31, 1998 and 1997 amounting to approximately Baht 201.1 million and Baht 192.3 million, respectively. - 13 - 13. COST OF PROJECT DEVELOPMENT - SHOPPING CENTER Consolidated In Thousand Baht Land leasehold rights Construction Interest Land (Note 19.1) in progress capitalization Total 1998 Central Pattana Chiang Mai Co., Ltd. 430,000 - - 157,206 587,206 Focus Holding Co., Ltd. - 283,238 71,468 114,826 469,532 Central Pattana Ko Raj Co., Ltd. 134,160 81,996 5,434 20,322 241,912 Central Pattana Khon Kaen Co., Ltd. 383,163 - 239 77,838 461,240 Central Pattana Chonburi Co., Ltd. - 14,347 131,870 1,864 148,081 Central Pattana Nine Square Co., Ltd. - 377,333 27,287 664 405,284 Total 947,323 756,914 236,298 372,720 2,313,255 Less allowance for decline in value 258,077 Net 2,055,178 1997 Central Pattana Chiang Mai Co., Ltd. 430,000 - - 113,659 543,659 Focus Holding Co., Ltd. - 273,479 58,177 114,826 446,482 Central Pattana Ko Raj Co., Ltd. 134,160 81,996 5,434 17,832 239,422 Central Pattana Khon Kaen Co., Ltd. 383,163 - 239 77,838 461,240 Central Pattana Chonburi Co., Ltd. - 14,347 128,289 1,864 144,500 Central Pattana Nine Square Co., Ltd. - 377,333 27,287 664 405,284 Total 947,323 747,155 219,426 326,683 2,240,587 - 14 - As of December 31, 1998, the subsidiaries have cost of project development - shopping center totalling approximately Baht 2,313 million. The management of the subsidiaries have temporarily suspended the above construction project development and provided the allowance for loss of recoverable amount totalling approximately Baht 258 million. The management of the subsidiaries decision to continue the construction depends on the future economic situation and the subsidiaries ability to obtain additional funds. 14. BANK OVERDRAFTS AND LOANS FROM FINANCIAL INSTITUTIONS In Thousand Baht Consolidated For the Company 1998 1997 1998 1997 Bank overdrafts 35,599 54,016 12,276 9,508 Loans from foreign banks 184,450 400,061 184,450 400,061 Total 220,049 454,077 196,726 409,569 The Company and subsidiaries have overdraft lines with various local banks bearing interest at the minimum overdraft rate. The Company has loan from a foreign bank of approximately Baht 185 million (U.S. Dollars 5 million). The loan bears interest at the rate based on Singapore Inter Bank Offer Rate (SIBOR). Under the terms of the loan agreement, the Company shall ensure that the dividend payment in a particular year will not exceed 50% of the prior years consolidated net income. (More)