SET Announcements

NOTE 8 - SURPLUS ON LAND REVALUATION In the fourth quarter of 1997, land are revalued using fair market value method by the independent appraiser approved by the Stock Exchange Committees. Fixed assets revaluation are as follows: Original Revaluated Revaluation Book value value surplus Baht Baht Baht Land under development for rent: Sanpinyo Limited 110,406,452.36 650,167,115.00 539,760,662.64 Prakarn Limited 33,373,390.00 134,832,885.00 101,459,495.00 143,779,842.36 785,000,000.00 641,220,157.64 The additional value from fixed assets revaluation are recorded as surplus on land revaluation presented in the balance sheet. NOTE 9 -INVESTMENTS IN RELATED PARTIES - NET Investments in related parties net as at June 30,1998 are as follows: (Amounts in Thousand) Investments Deficit on Paid up Percentage of Cost Method Equity Method investments Subsidiaries Capital shareholding 1998 1998 1998 Sanpinyo Limited 11,000 99 % 14,490 - (17,366) Chanachai Limited 90,000 99 % 101,524 89,846 - Jainad Limited 30,000 99 % 51,950 - (70,231) Prakarn Limited 1,000 99 % 1,000 - (13,344) Total investments in subsidiaries 168,964 89,846 (100,941) Related company Regency One Co., Ltd 200,000 10 % 20,000 - - Less Allowance for decline in value (1,357) - - Total investments in related company - net 18,643 - - Total investments in related parties 187,607 89,846 (100,941) The Company has relationship with its real estate subsidiaries by the shareholding and directors. NOTE 10- ASSETS PLEDGED AS COLLATERAL 1. Land including existing construction and land for development of the parent company are pledged as collateral for loans from finance companies and banks. 2. Land including existing construction and leasehold of property development project of subsidiaries are pledged as collateral for loans from finance companies and banks. 3. Certain land for development of subsidiaries are pledged with finance companies and banks as collateral for loans of the parent company and related parties. 4. Certain investments in securities of the parent company are pledged to secure loans from financial institutions. 5. As at June 30,1997, fixed deposit of the parent company and subsidiaries amounting to Baht 107 million are pledged to secure letter of guarantee issued by bank. NOTE 11 - LOSS ON RESTRUCTURING DEBTS On June 8, 1998, the Company entered into an agreement with a domestic commercial bank regarding to the repayment of debts. The bank agreed to transfer the credit facilities and the securities as described in the credit agreement specifically in relation to principal amount of Baht 187 million including the pledged rights on land of Saladaeng 748 project to a company which is the real estate credit management company under the Bank of Thailand policies. The Company transferred the guaranteed land totaling Baht 349 millions to the said company for repayment of debts. As a result, the Company had the loss on transfer of the said real estate development projects for the debt payment in the amount of Baht 162.323 million. NOTE 12 - DEFAULT IN DEBTS As at June 30,1998 parent and subsidiary companies were default in debts as follows; (Amounts in Thousand Baht) Principal Interest Payable Parent company 491,178 257,115 Subsidiaries 70,000 86,454 Total 561,178 343,569 The Company was in the process of negotiating to extend the period of loan agreements, restructuring debts and the condition of interest payment. NOTE 13- COMMITMENTS AND CONTINGENCIES 1. As at June 30,1998 the Company had commitments resulting from project construction agreements were Baht 526.62 million and Baht 161.93 million in consolidated and the Companys financial statements, respectively, and from letters of guarantee issued by bank were Baht 8.89 million and Baht 2.55 million, in consolidated and the Companys financial statements, respectively. 2. The Company had a contingent liability arising from being indicted by a customer, demanding a refund of both principal and interest, of approximately Baht 1.36 million, as a result of the delay in construction for the project being made later than what is stated in the contract. The litigation was under consideration of the court. As at June 30, 1998, no provision for any liability that may result from the lawsuit has been recognized in the financial statements. 3. As at June 30, 1997 commitments of the parent company and subsidiaries resulting from project construction were Baht 2,485 million and from letter of guarantee issued by bank were Baht 3.37 million. NOTE 14 - SEGMENT INFORMATION The operations of parent company and its subsidiaries were in the domestic real estate sector therefore no segment information is provided. NOTE 15 - SHARE CAPTICAL At the Ordinary Shareholders Meetings held on April 30, 1998, it was resolved to increase the share capital from 64,550,000 shares to 94,550,000 shares by issuing 30 million ordinary shares at Baht 10 par value totaling Baht 300 million to be totally offered for sale in one or at several times to 17 institutional investors as announced by the SEC. As regards the selling price per share, date and time of booking purchase, and payment of shares, these will be at the discretion of the board of directors. After that at the Board of Director Meeting held on June 8, 1998, it was resolved to offer increased share capital for sale totaling Baht 29,280,450 divided into 2,928,045 ordinary shares of Baht 10 par value to a commercial bank in order to restructure the company's debts. The company registered the increased paid up share capital on June 12,1998. NOTE 16 - SUBSEQUENT EVENT Parent Company At the Board of Directors Meeting held on July 6, 1998, it was resolved to offer the increased share capital for sale totaling Baht 4 million divided into 400,000 ordinary shares of Baht 10 par value to a life insurance company in order to restructure the company's debts. The company registered the increased paid up share capital on July 17,1998. Subsidiary Company In July 1998, the Company, as the guarantor, had transferred the rights of condominium in 1 unit as a payment of the parent company's debts to an insurance company amounting to Baht 8 million and had transferred the rights of condominium in 1 unit and some of land under development was paid for the Jainad Limiteds debts to a financial institution in the amount of Baht 41.57 million. These were resolved by the Board of Directors Meeting held on June 8,1998. NOTE 17 - RECLASSIFICATION Certain transactions in 1997 financial statements are reclassified to conform with the 1998 financial statements