NOTE 9 - PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment-net as at December 31, consisted of the following: (Amounts in Baht) Consolidated Company 1997 1996 1997 1996 Land and improvements 349,102,980 325,003,964 66,894,155 64,719,955 Excess of acquisition costs attributable to land value 1,645,851,611 1,633,844,136 - - Buildings and construction 2,248,929,565 2,053,917,300 730,071,561 717,687,461 Leaseholdings 1,152,444 1,152,444 1,152,444 1,152,444 Machinery, equipment and tools 5,528,944,949 5,167,984,315 31,042,514 29,708,471 Office furniture, fixtures and equipment 679,852,849 626,600,187 560,800,250 522,394,058 Vehicles 193,701,457 182,951,223 120,784,411 116,878,918 Construction and installation in progress 679,890,089 133,659,136 298,500 196,435 11,327,425,944 10,125,112,705 1,511,043,835 1,452,737,742 Less:Accumulated depreciation (4,646,606,938) (3,982,330,058) (634,378,334) (522,420,674) Property, Plant and Equipment - net 6,680,819,006 6,142,782,647 876,665,501 930,317,068 Depreciation and amortization were included under cost of goods manufactured, cost of sales and selling and administrative expenses in amounts of Baht 740,997,720 in 1997 and Baht 792,143,410 in 1996, for the consolidated financial statements, and in the amounts of Baht 123,204,933 in 1997 and Baht 119,051,832 in 1996 for the Companys financial statements. The excess of acquisition costs attributable to land value represents the difference between the fair value of land at the date of acquisition of subsidaries and the original cost of this land to the subsidiaries concerned. The taxation that might become payable were the revaluation surpluses so arising realized through sale of these assets is included under deferred income tax - non-current in the consolidated financial statements NOTE 10 - OTHER ASSETS - OTHERS Others in other assets as at December 31, consisted of the following: (Amounts in Baht) Consolidated Company 1997 1996 1997 1996 Deposits 10,071,201 9,589,823 5,098,163 5,003,163 Property foreclsoed 49,231,483 34,228,813 - - Deferred charges - net 24,404,560 32,972,522 3,614,451 4,118,610 Others 284,984 8,875,245 - - Total 83,992,228 85,666,403 8,712,614 9,121,773 NOTE 11 - LONG-TERM LIABILITIES Long-term liabilities as at December 31, consisted of the following: (Amounts in Baht) Consolidated Company 1997 1996 1997 1996 Baht loans from financial institutions 309,000,000 132,000,000 - - Foreign currency loans from financial institutions 3,891,859,778 3,297,550,200 3,243,395,207 2,437,700,000 Other loans 10,721,553 2,944,535 - - . Total loans outstanding 4,211,581,331 3,432,494,735 3,243,395,207 2,437,700,000 Consolidated Company 1997 1996 1997 1996 Loan repayment within a period: Not exceeding one year 1,628,770,778 768,324,388 1,205,460,000 293,257,143 More than 1 year but not exceeding 2 years 168,389,106 2,047,046,908 - 1,704,557,143 More than 2 year but not exceeding 3 years 156,254,385 462,249,893 - 293,257,143 More than 3 year but not exceeding 4 years 115,231,855 154,591,321 - 146,628,571 More than 4 year but not exceeding 5 years 2,132,935,207 47,700 2,037,935,207 - More than five years 10,000,000 234,525 - - Total loans outstanding 4,211,581,331 3,432,494,735 3,243,395,207 2,437,700,000 Less : Amounts repayable within one year included in current liabilities (1,628,770,778) (768,324,388) (1,205,460,000) (293,257,143) Total long-term liabilities 2,582,810,553 2,664,170,347 2,037,935,207 2,144,442,857 The figures for foreign currency loans from financial institutions shown above disclose foreign currency borrowings at exchange rates prevailing on the balance sheet date or, where relevant, at exchange rates based on various foreign exchange contracts entered into to fix the exchange rate at which such foreign currency borrowings will be repaid in future. Loans are repayable in various annual instalments at a weighted average rate of interest of 6.57% in 1997(1996:6.11%) for foreign currency loans and at a weighted average rate of 13.79% in 1997 (1996: 13.75%) for Baht loans. Hedging costs for US dollar denominated loans vary between 2.42% and 7.25% in 1997 (1996:2.42% and 2.86%). In December 1997 the Company crystallised a gain on its long term principal only swaps, amounting to Baht 1,428,946,000, of which Baht 973,516,000 was received in cash and Baht 455,430,000 relating to loans due in 2002 will be received in 2002. NOTE 12 - LONG-TERM LEASE DEFERRED INCOME The long-term lease deferred income outstanding as at December 31, 1997 and 1996 represents the unamortized balance of lease premiums received in advance in respect of which the underlying lease had 27 years and 28 years, respectively, to expiry. NOTE 13 - OTHER LIABILITIES -OTHERS Others in other liabilities as at December 31, consisted of the following: (Amounts in Baht) Consolidated Company 1997 1996 1997 1996 Deposits 16,618,354 17,364,828 16,618,354 17,364,828 Excess of loss over book value of investments in subsidiary companies 1,211,641 - 30,673,876 23,674,666 Total 17,829,995 17,364,828 47,292,230 41,039,494 NOTE 14 - DONATED SURPLUS The donated surplus of Baht 36,867,563 at December 31, 1997 and 1996 resulted from profit made by a director of the Company in 1994 on sale of the 397,104 rights issue shares not subscribed for by the shareholders and resold to the public on the Stock Exchange of Thailand. NOTE 15 - INCOME TAX Income tax consisted of the following: (Amounts in Baht) Consolidated Company 1997 1996 1997 1996 Accrued income tax 66,478,855 170,947,802 3,327,995 41,949,591 Income tax prepayment - half year 121,337,340 158,306,361 8,580,087 32,208,146 Income tax withheld 44,801,699 42,678,012 26,656,237 19,820,833 Adjustments to prior year- income tax provisions 252,513 (490,921) - - Income tax payable 232,870,407 371,441,254 38,564,319 93,978,570 Deferred income tax (12,048,391) (43,896,401) (43,745,612) (34,524,549) Income tax shown in the statements of income 220,822,016 327,544,853 (5,181,293) 59,454,021 NOTE 16 - ADJUSTMENTS TO OPENING BALANCE OF RETAINED EARNINGS The adjustments represent retirement benefits payable to employees for period prior to 1997, which had been underestimated in the amounts of Baht 147,627,962 before tax and Baht 114,628,106 net of income tax. NOTE 17 - CONTINGENCIES The Company was contingently liable as guarantor of credit facilities for related parties at December 31, 1997 and 1996 to the extent of Baht 368,585,440 and Baht 68,519,500, respectively. At December 31, 1997, a subsidiary company was contingently liable as guarantor of credit facilities provided to Vina Glass Industries Limited amounting to Baht 505,823,700 (DEM 19 million). NOTE 18 - COMMITMENTS At December 31, 1997 and 1996 subsidiary companies had commitments for capital expenditures in the approximate amounts of Baht 279 million and Baht 29 million, respectively. NOTE 19 - BUSINESSES ACQUIRED Assets and liabilities of the subsidiary companies acquired during 1997 are summarized below. (Amounts in Baht) Current assets 152,640,674 Fixed assets 307,904,892 Current liabilities (194,861,488) Long-term liabilities (112,374,743) Total 153,309,335 NOTE 20 - SEGMENT INFORMATION For financial accounting purposes the Group divides its core business into two areas: Packaging & Consumer products and Technical products & Engineering, non-core operations are grouped as Others. The results of operations for the years ended December 31, 1997 and 1996 are summarized below: Baht (Million) Packaging Technical & Consumer products Others 1997 1996 products & Engineering Total Total Sales 1997 6,736.3 3,834.5 44.2 10,615.0 1996 6,532.0 3,523.1 74.3 10,129.4 Operating profit before interest excluding proportion attribu to minority interests 1997 824.9 284.9 (47.9) 1,061.9 1996 895.2 221.1 (27.1) 1,089.2 Minority interests proportion in operating profit before tax 295.5 393.4 Operating profit before interest 1,357.4 1,482.6 General corporate expenses (29.4) (37.2) Net interest(expense)income (292.1) (276.0) (Loss) gain on foreign exchange (260.9) 13.8 Net income before tax 775.0 1,183.2 Income tax (220.8) (327.6) Net income before minority interests 554.2 855.6 Minority interests (169.7) (245.2) Net income 384.5 610.4 As at December 31, 1997 and 1996 property, plant and equipment, net of accumulated depreciation and amortization, were allocated as follows: Property plant and equipment: 1997 5,240.8 534.4 72.1 5,847.3 1996 4,786.2 397.3 80.4 5,263.9 General assets used 833.5 878.9 Total Property Plant and Equipment - Net 6,680.8 6,142.8 NOTE 21 - RECLASSIFICATION OF ACCOUNTS Certain accounts in the financial statements for the year ended December 31, 1996 are reclassified to comply with the presentation of the accounts in the financial statements for the year ended December 31, 1997.