Investor Relations

MD & A

Financial Status

Assets

As at 2010. the Company reported total assets of Baht 22,047 million, a slight increase by 6.30% when compared to Baht 20.739 million at the 2009 year-end. It was because of accounts receivable from the sales of land and electricity that are undue for payment, advance payment for land purchase and construction. payment for land awaiting development in the Ayutthaya project and land of the subsidiary for condominium projects. including land, buildings and equipment for future capacity expansions.

Liabilities

Total liabilities of the Company were Baht 13,825 million, down from Baht 13.218 million in 2009. It was mainly due to short-term loans to purchase land awaiting future development. accrued expanse that is undue for payment. unrecognized installments and advance payment from customers of the projects in China that has not yet met the criteria of revenue recognition in accordance with Thai accounting standards.

Shareholders' Equity

The Company had total shareholders' equity of Baht 8.222 million. up from Baht 7,521 million in 2009. The increase was driven by the annual net profit of Baht 930 million. the exercise of warrants to purchase the ordinary shares and the premium on shares issued in connection with the deduction by the dividends payable to the shareholders.

Operating Results

The Company achieved better performance in 2010 when compared to 2009 as the figures shown below.

Year 2010
(Mil. Baht)
Year 2009
(Mil. Baht)
Increasing or (Decreasing)
%
Total Revenues 8,915 7,066 26.17
Net Profits 930 757 22.85

The changes were mainly due to the following major factors.

1. Revenues by Business Segments
Year 2010
(Mil. Baht)
Year 2009
(Mil. Baht)
Increasing or (Decreasing)
%
Land Sales 1,262 1,052 19.96
Residential & Condominium Sales 2,083 1,124 85.32
Product Sales 4,849 4,286 13.14
Services and Rental Fees 486 419 15.99
Share of Profits from the Investment in the subsidiary and affiliated companies 191 167 14.37
2. Costs of Goods Sold
Year 2010
(Mil. Baht)
Year 2009
(Mil. Baht)
Increasing or (Decreasing)
%
Land Sales 556 493 12.78
Residential & Condominium Sales 1,620 692 134.10
Product Sales 4,131 3,662 12.81
Services and Rental Fees 269 210 28.10

The increases can be explained as followed:

Land Sales: Land sales totaled 633 rais this year, divided into the sales of land in Ayutthaya for 617 rais and in Rayong for 16 rais, both in the old and new phases. The revenue in the old phase was fully recognized whereas the revenue recognition practice in the new phase (Phase 8 Stage 1) was in line with the percentage of work completed. In case the payment was made in full along with the transfer of ownership of land, the full revenue recognition was allowed. Additionally, in 2009 the Company entered into the land sale and purchase agreements for 100 rais of land with customers in Rayong but the revenue recognition from the sales took place in 2010 in proportion to the percentage of work completed.
Condominium Sales: The recognition of revenues mostly came from both projects in China. In the first project, the company has started to of Goods Sold: Selling and Administration Expenses: transfer ownership in condominium units to customers, expectedly that the transfer of the remaining units will be complete within 2011. The second project has started to recognize its revenue in the third quarter under the percentage-at-completion method.
Rental and Service Fees: Service fees consist at industrial water fees, wastewater treatment fees and general service fees for instance. In 2010, there were more sales of industrial water in line with the increasing number of factories and the added production capacity by the existing factories. The rental fee showed the decrease as the customers who previously used to rent land make the change from renting to buying land instead.
Cost of Goods Sold: The cost of goods sold increased at the rate similar to the sales volume except for the costs of condominiums that was higher as the price of construction material and equipment rose up.
Selling and Administration Expenses: The selling and administration expenses were higher than last year incurred by the expense for the construction of the patient care building for Phra Nakhon Sri Ayutthaya Hospital. It is a 5-storey building on a budget of Baht 72 million. Given the deduction by this transaction, the administration expense will be at the rate similar to the previous year, approximately 5-6% of total revenues. The increase in selling expense was influenced by tax on sales, agent commissions and advertisement fees in relation to the project in China, which was related to the condominium sales volume.
3. Revenue from Share of Profits from the Investments

The Company received share of profits from its investments in the affiliated companies proportionately to the shareholding ratio. In 2010, two subsidiaries of the Company showed better performance.

Liquidity

The Company's liquidity in 2010 accounted for 1.68, decreased from 1.76 in 2009. However, it was sufficient for the Company's business operations. It also reflected that the Company had remained in good financial status, having net cash flows from operating activities of Baht 16 million, investment activities of Baht 762 million and financing activities of Baht 118 million. The cash flow was mostly used for the acquisition of assets of the Company and the subsidiaries that would generate future income.

From the above-mentioned factors. it can be seen that the Company's liquidity is at a good level despite it has been expanding respectively by increasing land development and service providing to respond the customers' demand. If any factor is assumed to be a factor that would cause a risk or has a potential to affect the Company, then the Company and the subsidiaries will proceed to immediately rectify and improve such factor in order to reduce or eliminate the risk so as to ensure the optimum benefits of the Company and the subsidiaries.