Total other investments 189,280 189,280 120,315 120,315 Although the Group's investments in Rachada Nonsee Department Store Co., Ltd. represent 23% interest in the total registered share capital of the Company, the Group has no significant influence in the company's financial and operating policy decisions. Therefore, the Group does not account for investment in Rachada Nonsee Department Store Co., Ltd. as an associate under equity method. As of 31 December 1998, the company's current assets fell short of its current liabilities by Baht 277 million and its shareholders' equity had a deficiency of Baht 5 million. Deposit at financial institution of Bht 46.8 million (1998 : Bht 46.8 million) was promissory notes at a commercial bank, which are matured in September 2002. 12 Deferred Income Tax The following amounts are shown in the consolidated and the company's balance sheets: Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Deferred tax assets 211,075 176,158 211,075 176,158 Deferred tax liabilities (3,461) (111,208) (3,461) (111,208) 207,614 64,950 207,614 64,950 13 Property and Equipment Consolidated Vehicles Project Leasehold Building& and Construction under Land right Improvement Equipment in progress development Total Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 At 31 December 1998 Cost 1,178,774 973,529 6,956,179 367,384 94,616 2,460,401 12,030,883 Less Accumulated depreciation - (112,623) (1,584,674) (222,857) - - (1,920,154) Net book amount 1,178,774 860,906 5,371,505 144,527 94,616 2,460,401 10,110,729 Less Provision for project loss - - - - - (255,587) (255,587) Closing net book amount 1,178,774 860,906 5,371,505 144,527 94,616 2,204,814 9,855,142 Year ended 31 December 1999 Opening net book amount 1,178,774 860,906 5,371,505 144,527 94,616 2,204,814 9,855,142 Additions/ Transferred in - - 244,084 88,911 - 70,567 403,562 Disposals / Transferred out - (57,214) - (1,275) (87,712) - (146,201) Provision for project loss - - - - - (30,000) (30,000) Depreciation charge - (37,605) (370,395) (50,075) - - (458,075) Closing net book amount 1,178,774 766,087 5,245,194 182,088 6,904 2,245,381 9,624,428 13 Property and Equipment (continued) Consolidated Vehicles Project Leasehold Building & and Construction under Land right Improvement Equipment in progress development Total Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 At 31 December 1999 Cost 1,178,774 916,315 7,200,263 454,964 6,904 2,530,968 12,288,188 Less Accumulated depreciation - (150,228) (1,955,069) (272,876) - - (2,378,173) Net book amount 1,178,774 766,087 5,245,194 182,088 6,904 2,530,968 9,910,015 Less Accumulated provision for project loss - - - - - (285,587) (285,587) Net book amount 1,178,774 766,087 5,245,194 182,088 6,904 2,245,381 9,624,428 Long-term bank borrowings are secured by the Group' s properties with book values of Baht 2,507 million (1998: Baht 1,422 million). Total interest capitalised to projects under development as at 31 December 1999 and 1998 was Baht 393.7 million. The Group's project under development with net book values amount of Baht 2,245.3 million comprises total 6 projects. However, the balances included development costs 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 project loss as of 31 December 1999 are amounting to Baht 1,904 million and 257 million, respectively. The management believes that, at present, the assets could be recovered at values not less than their net carrying values. 13 Property and Equipment (continued) Company Vehicles Leasehold Building & and Construction Land right improvement Equipment in progress Total Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 Baht'000 At 31 December 1998 Cost 300,907 640,815 3,656,488 188,431 32,693 4,819,334 Less Accumulated depreciation - (93,957) (1,078,738) (148,301) - (1,320,996) Net book amount 300,907 546,858 2,577,750 40,130 32,693 3,498,338 Year ended 31 December 1999 Opening net book amount 300,907 546,858 2,577,750 40,130 32,693 3,498,338 Additions/Transferred in - 7,484 34,632 16,039 - 58,155 Disposals/Transferred out - - - - (32,693) (32,693) Depreciation charge - (24,965) (137,435) (17,930) - (180,330) Closing net book amount 300,907 529,377 2,474,947 38,239 - 3,343,470 At 31 December 1999 Cost 300,907 648,299 3,691,120 204,470 - 4,844,796 Less Accumulated depreciation - (118,922) (1,216,173) (166,231) - (1,501,326) Net book amount 300,907 529,377 2,474,947 38,239 - 3,343,470 Long-term bank borrowings are secured by the Company' s properties with the book values of Baht 1,462 million (1998: Nil). 14 Other Assets Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 (Restated) (Restated) Withholding tax deducted at source 107,715 91,355 56,140 56,139 Guarantee for leasehold right 403,704 406,791 105,130 108,216 Deferred expenses from issue Euro convertible bond 12,290 24,871 12,290 24,871 Deposit and intangible assets 18,682 32,796 1,286 16,640 542,391 555,813 174,846 205,866 15 Borrowings Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Current portion of long-term borrowings Financial institution borrowings 105,269 2,194,609 89,168 772,915 Bonds issued to financial institutions 156,971 - 156,971 - 262,240 2,194,609 246,139 772,915 Long-term borrowings Financial institution borrowings 1,489,451 - 460,831 - Bonds issued to financial institutions 755,205 - 755,205 - 2,244,656 - 1,216,036 - Total borrowings 2,506,896 2,194,609 1,462,175 772,915 As at 31 December 1998, the subsidiary has not settled a portion of the loan first due in December 1998 of Baht 222 million. The subsidiary is in the process of loan settlement within March 1999, by increase share capital of Baht 200 million and waiting for approval of credit to its lease receivables from the same bank, to settle its debt. In addition, the subsidiary has not received any letter from the same bank, advising an event of default to the loan and is still servicing interest minimum loan rate (normal rate) during negotiations with the bank. The subsidiary always pays interest to the bank consistently. The management believes that the subsidiary will receive the approval letter from the bank. However, because the subsidiary has not received the second formal approval letter from the bank, the subsidiary presents the balance of the loan totaling Baht 1,422 million as current portion of long-term loan. In March 1999, the repayment terms of outstanding loan of the subsidiary company totaling Baht 1,422 million was formally extended by the bank. Therefore the loan was presented by the repayment period indicated in the amended agreement. All loans are secured with the land and buildings of the Company and subsidiaries as mentioned in Note 13 to the financial statements, except for the loan from financial institution amounting to Baht 772.9 million in 1998 which has no collateral. 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 will be guaranteed by the company and a related company and secured by transferring a land leasehold right and mortgaged of the subsidiary's existing construction, with net book values of Baht 174.3 million and/ or the future construction thereon at the time when the subsidiary withdraws the loans. However, as at 31 December 1999, the subsidiary has not drawndown the loans. 15 Borrowings (continued) The interest rate exposure of the borrowings of the Group and the company was as follows: Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Total borrowings: - at fixed rates 550,000 - 550,000 - - at floating rates 1,956,896 2,194,609 912,175 772,915 2,506,896 2,194,609 1,462,175 772,915 Weighted average effective interest rates: - Bank overdrafts 4.0 %- 8.2% 11.5 %-16.7% 4.0 %- 8.2% 12.0 % -16.0% - Euro convertible bonds 2.75% 2.75% 2.75% 2.75% - Bonds and other borrowings 8.2% -10.1% 12.0% -16.0% 8.2% - 10.1% 12.0% -16.0% Maturity of long-term borrowing: Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Later than 1 year and not later than 2 years 262,240 2,194,609 246,139 772,915 Later than 2 years and not later than 5 years 2,244,656 - 1,216,036 - 2,506,896 2,194,609 1,462,175 772,915 16 Other Current Liabilities Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Accrued expenses 134,619 131,458 65,865 68,654 Other accounts payable 128,253 100,738 40,881 41,025 Accrued interest expenses 85,178 85,922 84,677 84,987 Retention payable 61,697 76,718 2,932 3,457 Contractor payable 34,614 39,183 1,125 825 Others 26,963 32,183 10,249 14,647 471,324 466,202 205,729 213,595 17 Euro Convertible Bonds In April 1996, the Company issued Euro Convertible Bonds to be offered in Luxembourg Stock Exchange amounting to United States Dollar 50 million, divided into 50,000 bonds at United States Dollar 1,000 par value. The bonds shall be effective for a period of 5 years (up to April 2001). The bonds bear interest at the rate of 2.75% per annum payable annually through maturity on 11th April 2001 and can be converted at the ratio of 1 bond : 245 common shares at the price of Baht 103 per share (subject to adjustment in the circumstances described under terms and conditions of the Bonds - Conversion), with a fixed rate of exchange conversion of Baht 25.235 = United State Dollar 1. The bondholders may exercise conversion rights from 11th June 1996 up to 27th March 2001. In addition, under certain conditions, the Company may mandatorily redeem all or some of the bonds at the par value plus redemption premium at any date after 11th April 1999. At the maturity date, all remaining bonds will be redeemed at United States Dollar 1,320 per share. As at 31 December 1999, the Company provided financial expense of redemption premium amounting to United States Dollar 320 per share by the straight-line method over a period of the bonds. In respect of the issuance of the bonds as referred to above, the Company increased its authorised share capital of 21 million shares in order to reserve the shares for the exercise of conversion rights of the bondholder. In 1999, the Company purchased the bonds, in a nominal face value totaling of United States Dollar 2.45 million (1998: purchased and cancelled the bond totaling of United States Dollar 11 million), divided into 2,449 bonds (1998: 10,950 bonds) at United States Dollar 1,000 par value (1998: United States Dollar 1,000). The Company has gain on bond purchase amounting to Baht 56 million (1998: Baht 264.6 million). The Company presented this transaction separately in the statements of income. 18 Share Capital and Premium on Share Capital Ordinary Share Number of Shares Premium Total shares Baht'000 Baht'000 Baht'000 At 31 December 1997 100,000,000 1,000,000 1,185,000 2,185,000 Issue of shares - - - - At 31 December 1998 100,000,000 1,000,000 1,185,000 2,185,000 Issue of shares - - - - At 31 December 1999 100,000,000 1,000,000 1,185,000 2,185,000 The total authorised and registered number of ordinary shares is 121,000,000 shares (1998: 121,000,000 shares) with a par value of Baht 10 per share (1998: Baht 10 per share). Totaling of 100,000,000 issued shares are fully paid. 19 Legal Reserve Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Beginning balance 121,000 97,343 121,000 97,343 Appropriation during the year - 23,657 - 23,657 Ending balance 121,000 121,000 121,000 121,000 20 Other Operating Income Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 (Restated) (Restated) Management income - 7,474 30,095 35,535 Others 109,712 112,532 59,040 53,319 109,712 120,006 89,135 88,854 21 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, was Baht 7.1 million and Baht 6.0 million, respectively. The net loss from cancellation of Baht 1.04 million was adjusted to cost of sales in the consolidated statement of income for the year ended 31 December 1999. 22 Interest Expenses Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Interest expenses - Financial institution borrowings 212,649 392,963 92,535 172,406 - Bonds 33,723 - 33,723 - - Euro convertible bonds (Note 17) 134,729 199,207 134,729 199,207 381,101 592,170 260,987 371,613 23 Operating Profit The following expenditures, classified by nature, have been charged in arriving at operating profit: Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 Net foreign exchange transaction gains/(losses) (35,902) 598,218 (35,902) 598,218 Depreciation on property, plant and equipment (Note 13) - owned assets 420,470 385,330 155,365 159,178 - owned assets leased under operating leases 37,605 36,276 24,965 23,972 Provision for loss on projects under development (Note 13) 30,000 258,077 - 241,057 Amortisation of intangible assets (included in 'Administrative expenses') 17,801 16,049 15,533 14,818 Staff costs 173,450 166,779 123,795 142,408 24 Earnings Per Share Basic earnings per share is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year. Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 (Restated) (Restated) Net profit attributable to shareholders 371,986 350,854 371,986 350,854 Weighted average number of ordinary shares in issue ('000 shares) 100,000 100,000 100,000 100,000 Basic earnings per share (Baht) 3.72 3.51 3.72 3.51 24 Earnings Per Share (continued) In the diluted earnings per share calculation, the convertible debt is assumed to have been converted into ordinary shares and the net profit is adjusted to eliminate the applicable interest expense less the tax effect. This calculation serves to determine the 'unpurchased' shares to be added to the ordinary shares outstanding for the purpose of computing the dilution; for the share options calculation no adjustment is made to net profit. Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 (Restated) (Restated) Net profit attributable to shareholders 371,986 350,854 371,986 350,854 Elimination of interest expense on convertible debt (net of tax effect) 84,828 114,818 84,828 114,818 Elimination of (gain) loss from foreign exchange (net of tax effect) 24,905 (340,239) 24,905 (340,239) Net profit used to determine diluted earnings per share 481,719 125,433 481,719 125,433 Consolidated Company 1999 1998 1999 1998 Shares'000 Shares'000 Shares'000 Shares'000 Weighted average number of ordinary shares in issue 100,000 100,000 100,000 100,000 Adjustments for assumed conversion of convertible debt 8,906 9,506 8,906 9,506 Weighted average number of ordinary shares for diluted earnings per share 108,906 109,506 108,906 109,506 Diluted earnings per share 4.42 1.15 4.42 1.15 For the year ended 31 December 1999, diluted earning per share is higher than basic earning per share. Therefore, basic earnings per share is presented as diluted earnings per share in the statement of income. 25 Prior year adjustments Consolidated Company 1999 1998 1999 1998 Baht'000 Baht'000 Baht'000 Baht'000 (Restated) (Restated) Cumulative effect from change the accounting policy on pre-operating expenses to comply with the new accounting framework (46,186) (29,261) (46,186) (29,261) Prior year adjustment The capitalisation of interest expense to cost of assets (19,325) (28,988) (19,325) (28,988) (65,511) (58,249) (65,511) (58,249) The Company has restated the financial statements for the year ended 31 December 1998 to reflect the result of cumulative effects from the change in its accounting policy on pre-operating expenses in 1999 to comply with the new accounting framework and prior year adjustments relating to the correction of errors in the capitalisation of interest expenses as cost of assets. 26 Dividends Per Share At the meeting on 21 April 1999, a dividend in respect of the year 1998 of Baht 1 per share amounting to a total of Baht 100 million was approved. Dividends payable are not accounted for until they have been ratified at the Annual General Meeting. These financial statements do not reflect this dividend payable, which will be accounted for in shareholders' equity as an appropriation of retained earnings in the year ended 31 December 1999. 27 Cash Flows from Operating Activities Reconciliation of net profit to cash flows from operating activities: Consolidated Company 1999 1998 1999 1998 Baht Baht Baht Baht (Restated) (Restated) Net profit 371,986,388 350,853,562 371,986,388 350,853,562 Interest expense 381,100,522 592,169,980 260,987,261 371,613,185 Income tax 183,786,396 330,972,429 169,584,580 319,038,562 Minority interest 27,032,331 (41,271,219) - - Net profit before interest and tax 963,905,637 1,232,724,752 802,558,229 1,041,505,309 Adjustments for: Depreciation and amortisation 482,051,042 462,766,989 195,629,164 201,058,014 Allowance for doubtful debts 76,446,021 59,912,481 73,613,629 52,255,242 Provision for loss on project under development 30,000,000 425,173,037 - 408,152,844 Recognise rental and service income (154,376,056) (153,728,498) (80,165,238) (80,249,431) Loss on cancellation of sale contract (Note 21) 1,044,503 - - - (Profit)/Loss on foreign exchange 33,954,137 (546,253,199) 33,954,137 (546,253,199) Share of (profit)/loss of subsidiaries - - (4,454,543) 135,055,662 (Gain) from valuation of marketable securities - (760,700) - (760,700) (Gain) loss on disposal of investments (1,192,372) 151,879,224 (1,192,372) 151,879,224 Redemption premium on convertible bonds - 91,522,721 - 91,522,721 Gain from redemption of Euro convertible bonds (56,185,049) (264,604,261) (56,185,049) (264,604,261) Changes in operating assets and liabilities: - (Increase) decrease in trade accounts receivable 73,418,086 1,932,650 76,643,609 38,289,346 - Increase in other accounts (more)