ข่าวแจ้งตลาดหลักทรัพย์

THE BANGCHAK PETROLEUM PUBLIC COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE SECOND QUARTER ENDED JUN 30,1998 1. Summary of Significant Accounting Policies 1.1 The accounting transactions of the Company have been recorded on the accrual basis. 1.2 Allowance for Doubtful Accounts The allowance for doubtful accounts is set-up based on debts deemed uncollectable from debtors as judged from the current status of each account receivable. 1.3 Inventories Finished petroleum products are stated at the lower of cost or market, whichever is lower. The unit cost is determined by the weighted average of monthly production costs and the volume of each oil product and ex- refinery selling prices. Product inventories are priced on a first-in, first-out method. Crude oil is stated at the lower of cost or market, whichever is lower. The unit cost is determined by the weighted average cost and the volume of monthly purchased crude oil. Crude inventories are priced on a first-in, first- out method. 1.4 Materials and Supplies Materials and supplies are stated at cost determined by the moving average method. 1.5 Long-Term Investment 1.5.1 The investment equal to or over 20 % of the paid-up share capital is recorded on the equity method. 1.5.2 The investment less than 20 % of the paid-up share capital is recorded on the cost method. 1.6 Property, Plant and Equipment Property, plant, equipment and depreciation are carried at cost. Interest expenses and the foreign exchange gains or losses on loans, which are related to fixed assets, are booked to the cost of assets. Depreciation is computed by the straight-line method at rates varying from 5% to 20% per annum based upon the estimated useful life of the assets. The company revises the value of its fixed assets should serious fluctuation in the economy occur which has direct effect on the assets.The surplus value from the revaluation is recorded under account +Surplus on fixed assets revaluation" in Shareholders+ Equity, which is not available for dividend distribution. Depreciation on the increased value of the assets is deducted from the +Surplus on fixed assets revaluation". 1.7 Deferred Income Tax The company records the difference in the corporate income tax numbers, calculated on the basis of the company+s financial statement and that of the Revenue Code, as +Deferred Income Tax" in the Balance Sheet. Amortization of this account is made as the income or expense booked is realized or used for tax credit when permitted under the Revenue Code. 1.8 Deferred Charges The prepaid land lease for service stations are amortized over the term of the land lease contract. Deferred charges related to the exchange of buildings between the company and Defence Energy Department,of the Ministry of Defence is amortized over a contracted term of 20 years. Other deferred charges are amortized within five years. 1.9 Foreign Currencies 1.9.1 Foreign currency transactions are converted into Baht at the exchange rate on the date the transactions incurred . The outstanding balance as of the ending period is translated into Baht using the exchange rate as announced by the Bank of Thailand. Differences from foreign exchange translations are booked the total amount as income or expense except for foreign exchange losses prior to year 1996, which are booked as deferred expense and amortized over the period of the loan . 1.9.2 Foreign exchange gains or losses translation and revaluation on long-term loan agreement which are related to construction projects are recorded as follows :- - In case of work in progress , gains or losses are booked as construction cost. - In case of completed project ,gains or losses are booked as income or expense. 1.9.3 Gains or losses resulting from the repayment of loans during the year are recorded as income or expense. 1.10 Deferred Revenue Deferred revenue, the advance lease income of equipments and others, are amortized over the term of the contract. 1.11 Interest Expense Interest on loans which is related to the construction of fixed assets are booked to the cost of work in progress until projects are completed. Interest costs incurring after the project is completed , are booked to expense. 1.12 Earnings Per Share Earnings per share is calculated from the net profit (loss) divided by the weighted average of issued and paid-up share capital. 2. Trade Accounts and Notes Receivable - Net The Company has trade account receivables that have problems in repaying debts. The following is an age analysis of the outstanding amount of such debts. ( Million Baht ) over 3 - 6 months 7.88 over 6 - 12 months 11.79 over 12 months 40.09 Total 59.76 The Company has set up an allowance for doubtful receivables of Baht 53.62 Million. 3. Investments and Loans Total investments and loan to related parties of Baht 424.36 million consists of investments in related parties of Baht 200.73 million ( on cost method of Baht 163.00 million and on equity method of Baht 37.73 million ) and Tariff Prepayment of Baht 223.63 million. The details of which are as follows :- 3.1 Investments in related parties Company Type of Business Relationship Paid -up Share Investment Dividend share holding (Million Baht ) capital Ratio As of 30 June 1998 (Million (%) Cost Method Equity Method Baht) Associated company The Bangchak Green Net Co.,Ltd. Retail Business Share holding 1.00 49.00 - 18.65 - and Service The Bangchak Green Line Co.,Ltd. Transportation Share holding 0.10 49.00 - 2.63 - and Service Mongkhol Chaipattana Co.,Ltd. Retail Business Share holding 3.00 48.98 - 1.86 - and Service The Bangchak Power Co.,Ltd. Power Generation Share holding 40.00 39.99 - 14.59 - and Steam Production Related company Fuel Pipeline Transportation Ltd. Transportation Share holding 796.00 16.71 133.00 - - and Service Auchan Chiang Mai Co.,Ltd. Wholesale, Share holding 300.00 10.00 30.00 - - Retail Business Total 163.00 37.73 3.2 Tariff Prepayment to Fuel Transportation Ltd. of Baht 223.63 million. The Company realized earnings from The Bangchak Green Net ,The Bangchak Green Line, Mongkhol Chaipattana and The Bangchak Power in the amounts of Baht 7.14 million ,Baht 0.34 million , Baht 0.25 million and Baht 1.35 million ,respectively. These earnings are recorded under the equity method as stated above in note 1.5.1 4. Contingent Liabilities As of June 30 ,1998 the Company+s contingent liabilities consisted of : 4.1 Obligations Bank guarantees issued by the banks on behalf of the Company at the amount of Baht 187.83 million. 4.2 Allegation The Ministry of Finance(the first defendant) was alleged in a land right transgression case (The claim for damages,which was filed with the civil court, amounts to Baht 1,055 million). The land in question ,which is located at the pier of the Refinery,was leased from the Ministry of Finance. The Company,as the lessee of land owned by the Ministry of Finance,was alleged as the fifth defendant along with the Ministry of Finance. According to the Company+s Legal Office opinion,regardless as to the outcome of the case,the Company would not be liable for any losses associated with the above mentioned claim as it is protected under a lease agreement. The case is being appealed with the civil court. 5. Preparation to encounter the problem of the year AD 2000 that would affect business The Company has begun, since the first quarter of 1997 , to solve the problem associated with the year AD 2000. As of June 30 ,1998 , 65 % of the work has been completed. However, there are some risks that companies, with whom the company does business , may not be ready in time to adjust their system. In any case , the Company does not expect any major problem that would affect its business as a result of this.