9 Other investments 1999 Consolidated Company Holding 1999 1998 1999 1998 % Baht'000 Baht'000 Baht'000 Baht'000 Investments in related companies Bangna Central Property Co., Ltd. 20% 107,946 107,946 107,946 107,946 Rachada Nonsee Department Store Co., Ltd. 19% 68,966 68,966 - - Siam Retail Development Co., Ltd. 15% 66,250 66,250 66,250 66,250 Ayudhaya Agrocity Co., Ltd. 12% 50,397 50,397 50,397 50,397 Square Ritz Plaza Co., Ltd. 12% 15,000 15,000 15,000 15,000 Jewelry Realty Co., Ltd. - 117,869 - 117,869 Jewelry Holding Co., Ltd. - 2,869 - 2,869 Investment, at cost 308,559 429,297 239,593 360,331 Less: Provision for impairment in value (167,096) (250,561) (167,096) (250,561) 141,463 178,736 72,497 109,770 Investment in marketable securities - non current Investment at cost - 19,750 - 19,750 Less: Unrealised loss - (18,650) - (18,650) - 1,100 - 1,100 Investment in other company Bangkok Club Co., Ltd. 0.1% 1,000 1,000 1,000 1,000 Deposit at financial institution 46,817 46,817 46,817 46,817 Total other investments 189,280 227,653 120,314 158,687 Deposit at financial institution of Bht 46.8 million (1998 : Bht 46.8 million) was promissory notes at a financial institution which is being controlled by the government. The company does not provide for a provision for doubtful accounts because the government comes to be the guarantor for all customers of the financial institution. 10 Property and equipment The balances included development cost of 5 shopping center development projects, located both in Bangkok and up-country, which were temporarily suspended. The management decision to continue the construction of the remaining projects depends on the future economic situation and the ability to obtain additional funds. The total costs of these projects, which are still temporarily suspended, and related allowance for decline in value as of 30 June 1999 are amounting to Baht 2,655 million and 583 million, respectively. The management believes that, at present, the assets could be recovered at values not less than their net carrying values. 11 Other assets Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Guarantee for leasehold right 405,248 408,710 106,673 109,760 Withholding tax deducted at source 98,864 102,638 56,141 56,139 Deferred income tax 96,874 66,012 96,874 66,012 Deferred expense 10,603 11,925 3,179 10,811 Other sundry assets 108,502 118,170 25,104 29,679 720,091 707,455 287,971 272,401 12 Other current liabilities Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Accrued interest expense 64,398 44,816 64,082 44,816 Accrued expenses 117,388 84,971 62,246 44,089 Other accounts payable 84,429 84,193 28,257 38,961 Retention payable 67,610 85,617 3,156 4,378 Others 99,948 82,292 19,713 7,466 433,773 381,889 177,454 139,710 13 Share capital Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Authorised and registered 121,000,000 ordinary shares of Bht 10 each 1,210,000 1,210,000 1,210,000 1,210,000 Issued and fully paid-up 100,000,000 ordinary shares of Bht 10 each 1,000,000 1,000,000 1,000,000 1,000,000 14 Surplus on revaluation from land Surplus on revaluation from land arising on acquisition of shares in a subsidiary represents the excess of the company's interest in the fair value ascribed to the identifiable assets (i.e. land) over the purchase consideration of share in the subsidiary. 15 Other income For the three-month period ended 30 June Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Management fee 758 4,073 9,976 14,214 Other income 30,971 26,201 5,720 10,994 31,729 30,274 15,696 25,208 For the six-month period ended 30 June Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Management fee 2,373 5,932 12,103 21,660 Other income 66,443 62,524 34,877 22,936 68,816 68,456 46,980 44,596 16 Cost of condominium leasehold right During the period from January to March 1999, 2 sale contracts of condominium units previously sold with total contract sum of Baht 7.1 million, were cancelled. Sales and cost of sales of the cancelled units, which were fully recognised in previous years, of Baht 7.2 million and Baht 6 million, respectively, were reversed during the first quarter of 1999. The net loss from cancellation of Baht 1.09 million was adjusted to cost of sales in the consolidated statement of income of the six-month period ended 30 June 1999. 17 Movement in operating working capital For the three-month period ended 30 June Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Decrease (increase) in trade accounts receivable 6,795 (603) 15,838 (100) Decrease in unbilled completed work - 8,336 - - Decrease (increase) in other current assets 35,132 (10,169) 22,668 (20,947) (Increase) decrease in other assets (9,624) 87,903 (996) 100,220 (Decrease) increase in trade accounts payable (1,291) 1,440 81 (222) (Decrease) in unearned rental income (1,802) (21,077) (18,902) (23,234) Increase (decrease) in other current liabilities 9,472 (39,214) 5,449 (16,690) (Decrease) increase in deposit from customers (5,198) (540) (3,217) 494 (Decrease) increase in guarantee for leasehold (27,670) 13,772 3,903 811 Increase (decrease) in deferred income tax 16,911 (9,330) 10,340 (9,330) Net increase in operating working capital 22,725 30,518 35,164 31,002 17 Movement in operating working capital (Cont'd) For the six-month period ended 30 June Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Decrease (increase) in trade accounts receivable 20,937 (20,677) 22,636 29,953 Decrease in unbilled completed work 4,208 8,336 - - Decrease (increase) in other current assets 4,261 (30,599) 10,883 (29,849) Decrease in other assets 997 135,251 10,934 103,286 (Decrease) increase in trade accounts payable (24,714) 5,791 (3,349) 1,138 (Decrease) increase in unearned rental income (51,187) 86,272 (45,857) (37,919) (Decrease) in other current liabilities (9,625) (113,438) (5,494) (10,261) (Decrease) increase in deposit from customers (6,534) 1,927 3,577 2,248 (Decrease) increase in guarantee for leasehold (27,339) (80,206) 3,903 (3,747) Net (decrease) increase in operating working capital (88,996) (7,343) (2,767) 54,849 18 Related party transactions The Group enters into transactions with related companies in the normal course of business. Significant transactions for the three-month and six-month periods ended 30 June can be summarised as follows: Consolidated For the three-month For the six-month period ended 30 June period ended 30 June 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Rental and service income 65,234 73,837 128,729 155,954 Interest income 2,062 42,280 5,472 82,183 Management income 1,198 3,359 2,373 5,607 Other income 3,402 2,244 5,002 3,792 Rental charges and other expenses 7,479 7,585 13,345 12,952 18 Related party transactions (cont') Company For the three-month For the six-month period ended 30 June period ended 30 June 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Subsidiaries Rental and service income 20,111 20,415 42,903 43,297 Interest income 14,328 61,429 23,551 118,727 Management income 4,308 13,142 12,670 18,768 Other income 1,680 1,394 3,141 2,928 Rental charges and other expenses 717 3,927 1,757 6,447 Other related companies Rental and service income 38,854 38,714 75,255 81,041 Interest income 854 - 2,892 - Management income 1,013 1,058 2,188 2,566 Other income 2,817 1,151 4,437 2,647 Rental charges and other expenses 7,757 4,150 13,546 8,001 Rental and service income are charged at market price. Management and consultant fees are charged at negotiated prices which were higher than actual cost. Loans to and loans from subsidiaries and associates carry interest at the bank's lending rate, except for the wholly-owned subsidiaries which carry interest at fixed deposit rate. 19 Commitments At 30 June 1999, the Group has commitments in respect of further development costs to complete property development projects in progress of Bht 122.4 million (1998: Baht 208.8 million). A subsidiary has entered into a Baht 1,000 million long-term loan agreement and a loan agreement by issuing promissory note with the line of Baht 300 million with a local bank. The loans are guaranteed by the company and a related company and secured by transferring a land leasehold right and mortgaged of the subsidiary's existing construction and/ or the future construction thereon. However, as at 30 June 1999, the subsidiary has not drawndown the loans. 20 Contingent liability The company and subsidiaries have contingent liabilities for letter of guarantee issued by banks in favor of a state enterprise for the consumption of electricity totaling of Baht 65.5 million (1998: Baht 56.0 million). 21 Pending lawsuits on Land In 1998, a subsidiary filed a case with the court against a local company for breach of land lease agreement amounting to Baht 444 million. The defendant filed a counter-claim with the court against the subsidiary for the payment of land rental and damage amounting to Baht 1,249 million (consist rental fee of approximately Baht 349 million and claim loss for breach the agreement of approximately Baht 900 million). The cases are pending and the ultimate outcome of these cannot presently be determined. 22 Subsequent event At the end of July 1999, the company entered into a loan agreement with a financial institution for a secured loan amounting to Baht 550 million. And in early August 1999, the company issued 950,000 secured debentures at nominal value of Baht 950 million. The loan and debentures carry interests at the rates based on the average minimum lending rate less 0.375% per annum and at 10.125% per annum. The loan and debentures are matured within 5 years with the repayment of principals and interest every three-month. The company mortgages one of its projects comprised a shopping center, office building and car park with net book values of Baht 1,700 million as the collateral of the loan and debentures. 23 Subsidiaries Subsidiaries included in the interim consolidated financial statements are as follows: Effective interest Held by the Group 1999 1998 Percent Percent Central Realty Service Co., Ltd. 100.0 100.0 Central Food Avenue Co., Ltd. 100.0 100.0 Central Pattana Chiang Mai Co., Ltd. 100.0 100.0 Central Pattana Ko Raj Co., Ltd. 100.0 100.0 Focus Holding Co., Ltd. 100.0 100.0 Lang Suan Realty Co., Ltd. 100.0 100.0 Food Novelties Co., Ltd. 100.0 100.0 Coffee Partners Co., Ltd. 90.0 100.0 Central Pattana Khon Kaen Co., Ltd. 78.1 61.7 Namsap Pattana Co., Ltd. 60.5 50.0 Numsup Pattana Realty Service Co., Ltd. 60.5 50.0 Central Pattana Chonburi Co., Ltd. 60.0 60.0 Central Pattana Nine Square Co., Ltd. 60.0 60.0 24 Reclassifications Certain reclassifications have been made to the presentation of the 1998 interim consolidated and company financial statements for comparative purpose. 25 The year 2000 issue The Company has modified the computer system to solve the year 2000 problems beginning in February 1998. The remidiation project was completed in June 1999 with the total cost of Baht 5 million, which mainly was providing the new personal computers and equipment. The Company, however, still faces risks that other companies with whom the Company does business may be unsuccessful in their computer remediation plan within the time. As a result, there are uncertainties that might affect the Company's operations. The ultimate outcome of this matter cannot presently be determined.