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Management Discussion & Analysis (MD&A) Quarter 1/2017

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Overview

In its consolidated financial statements as of March 31, 2017, Phol Dhanya Pubic Company Limited (The Company)
recorded revenue from sales and services of 248.22 MB, decreasing 20.50 MB or 7.63% compared to the revenue from
sales and services of 268.72 MB in the same quarter of previous year. Revenue from sales and services of Occupational
Safety, Health and Environment Products (SAFETY) and Control Environment Products (CE) were increase, however,
Water Solution Products (WATER) recorded revenue recognized from construction contracting service of the community
water supply projects decreased compared with the same quarter of previous year. In addition, the delayed completion of
the construction continuously from quarter 4/2016, in Quarter 1/2017, the company estimated liabilities arising from the
delay of this project for 116.25 MB, 94.27 MB of which was reclaimable from the contractors. The Company assessed its
ability to reclaim the penalties from the sub-contractors and estimated provisions, expected cannot reclaim such penalties
from the sub-contractors, also consequently recorded liabilities from expected penalties of delayed project delivery to
increase of 22.03 MB. These results in net loss attributable to equity holders of 10.99 MB in Quarter 1/2017, decreasing
by 20.95 MB or 210.29% compared to net profit attributable to equity holders of 9.96 in Quarter 1/2016.

Operating performance

Unit: Million baht

  1Q2017 1Q2016 % YoY
Revenue from sales 214.08 203.47 5.22%
Revenue from rendering of services 8.58 7.74 10.83%
Revenue from construction and service contracts 25.56 57.51 -55.56%
Other Revenue 1.88 0.47 303.89%
Total Revenue 250.10 269.19 -7.09%
Cost of sales 156.89 151.77 3.37%
Cost of redering of services 5.83 8.14 -28.33%
Cost of construction and service contracts 25.98 48.42 -46.36%
Total Costs 188.69 208.33 -9.42%
Gross Profit 59.53 60.40 -1.44%
Gross Profit (%) 26.74% 28.60% 0.00%
Total Selling & Administrative Expenses 70.17 46.22 51.82%
Profit (Loss) before Finance Costs and Income Taxes Expense -8.77 14.64 -159.87%
Profit (Loss) before Finance Costs and Income Taxes Expense (%) -3.51% 5.44% 0.00%
Profit (Loss) attributable to equity holders -10.99 9.96 -210.29%
Net Profit (%) -4.39% 3.70% 0.00%
Basic ernings per share (Baht) -0.05 0.06 -188.23%
Weighted average number of ordinary shares (Million shares) 202.50 162.00 0.00

Revenue

Unit: Million Baht

Revenue structure 1Q2017 % 1Q2016 % %YoY
Ocupational Safety, Health and Environment Products (SAFETY) 37.06 73.93% 171.96 63.99% 6.72%
Control Environment Products (CE) 30.07 14.93% 30.07 11.19% 23.26%
Water Treatment Products (WATER) 27.64 11.13% 66.69 24.82% -58.56%
Total revenue from sales and services 248.22 100% 268.72 100% -7.63%

 

In Quarter 1/2017, the Company’s sales and services were 248.22 MB, comprise 214.08 MB of revenue from
sales, 8.58 MB of revenue from services and 25.56 MB of revenue from construction contracts. Total revenue decreased
by 20.50 MB or 7.63%, compared with 268.72 MB in the same quarter of previous year.


Revenue from Occupational Safety, Health and Environment Products or SAFETY was 183.52 MB, which has
increased by 11.56 MB or 6.72% YoY compared to the same quarter of previous year, mainly due to the revenue from
sales and services of technical products and revenue from sales in government sector customers were increased.


The revenue earned from Control Environment Products or CE amounts to 37.06 MB, increasing by 6.99 MB or
23.26% compared with the same quarter of previous year. Major customers are in the electronics industry. In quarter
1/2017, the overview of electronics industry has been growth compare with the same quarter of previous year, the
company aimed at optimizing cost to retain existing customers and provide identifying competitive products to increase
revenue from the CE Products.


Revenue from Water Treatment Products or WATER equals 27.64 MB, decreasing by 39.05 MB or 58.56%
YoY, compared with the same quarter of previous year, due to revenue recognized from construction contracting service
of the community water supply project was decreased.

Cost of Sales and Services

The Company’s cost of sales and services in Quarter 1/2017 were 188.39 MB, comprising of 156.89 MB cost of
sales and 5.83 MB cost of services and 25.98 MB cost of construction. Cost of sales increased proportionally with more
revenue from sales. Cost of construction decreased proportionally with revenue recognized from construction
contracting service. In quarter 1/2017, Costs of sales and services account for 73.26% of sales and service revenue. Gross
profit margin from sales and services were increased, however, gross profit of the construction contracting service for the
community water supply project had incremental cost to rush the project completion, leading to a gross profit of 26.74%
which decrease, compare with 28.60% of the same quarter of previous year.

Selling and Administrative Expenses

In Quarter 1/2017, selling and administrative expenses amounted to 70.17 MB comprised of selling expenses
amounted to 23.10 MB and administrative expenses amounted to 25.04 MB. Administrative expenses were increase due
to the increase in number of personnel and recorded 22.03 MB of liabilities from expected penalties arising from delays
of constructions which cannot collect from sub-contractors.


In Quarter 1/2017, the company’s financial cost amounted to 3.98 MB, increasing due to the increase in loan
from financial institution for working capital.

Net profit

The effects from estimated liabilities from expected penalties arising from delays projects, the company’s
consolidate net loss (attributable to equity holders of the Company) was 10.99 MB, accounted for net loss margin 4.39%

Financial Position

Unit: Million baht

  March 31, 2017 December 31, 2017 % Change
Amount % Amount %
Current Assets 909.66 80.20% 770.07 80.14% 18.13%
Non-Current Assets 224.55 19.80% 190.88 19.86% 17.64%
Current Liabilities 718.64 63.36% 534.12 55.51% 34.54%
Non-Current Liabilities 75.31 6.64% 75.82 7.88% -0.68%
Shareholder's Equity of the Company 341.57 30.11% 352.31 36.61% -3.05%

 

Assets

As of March 31, 2017, the Company’s total assets equaled 1,134.21 MB, increasing by 173.26 MB or 18.03%
from December 31, 2016. The increased assets were mainly from current assets increasing from 88.40 MB of cash and
cash equivalents, 18.96 MB of trade receivables and 65.07 of receivables for penalties arising from delays of
constructions. While, unbilled receivables and prepaid expenses to the subcontractors for the construction decreased of
147.86 MB. Non-current assets amount to 224.55 MB, mainly increase from 30 MB of restricted deposits with financial
institution for short-term loan facility.

Liabilities

As of March 31, 2017, the Company’s total liabilities equaled 793.95 MB, increasing by 184 MB or 30.17%
from December 31, 2016. The major source of liabilities is short-term loans from financial institution of 135.90 MB and
recorded provision for penalties arising from delays of constructions and provision for expected loss on constructions
contracts amount to 23.60 MB. Non-current liabilities most likely to the same quarter of previous year.

Shareholder’s equity

As of March 31, 2017, Shareholders’ equity was 341.57 MB, retained earnings was decrease due to the
resulting from net loss was 10.99 MB.

Cash Flows

Unit: Million Baht

Cash Flows March 31, 2017 March 31, 2016
Cashflow from (used in) operating activities (7.20) (68.89)
Cashflow from (used in) investing activities (31.85) (1.71)
Cashflow from (used in) financing activities 127.19 49.85
Net increase (decrease) in cash  and cash equivalents 88.14 (20.75)
Cash and cash equivalents at the end of the period 137.25 38.48

The Company’s net cash utilized in the operating activities is 7.20 MB, with operating profits prior to changes
in the operating assets and liabilities of 21.82 MB. The major reason for the change is due to the trade and other
receivables increased 93.05 MB, while unbilled receivables and prepaid expenses to the subcontractors for the
construction decreased of 46.68 MB and trade and other payable were increased of 23.52 MB.


Cash flow utilized in investment activities amounts to 31.85 MB mainly increase from 30 MB of restricted
deposits with financial institution for short-term loan facility and 1.82 MB was used to purchase fix assets.


Cash flow acquired from financing activities amounts to 127.19 MB; short-term loans from financial
institutions have increased by 134.85 MB, while loan repayment to financial institutions amounts to 3.29 MB and debt
settlement according to financial lease of 1.68 MB was arranged, with an interest expense of 2.69 MB.

Management Discussion & Analysis (MD&A) Quarter 2/2017

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Overview

In its consolidated financial statements as of June 30, 2017, Phol Dhanya Pubic Company Limited (The Company) recorded revenue from sales and services of 252.15 MB, decreasing 51.47 MB or 16.95% compared to the revenue from sales and services of 303.61 MB in the same quarter of previous year. Revenue from sales and services of Occupational Safety, Health and Environment Products (SAFETY) and Control Environment Products (CE) were increase, however, Water Solution Products (WATER) recorded revenue recognized from construction contracting service of the community water supply projects decreased compared with the same quarter of previous year. And the cause of delayed completion of the construction continuously, in quarter 2/2017, the company estimated liabilities arising from the delay of this projects for 137.81 MB, 113.05 MB of which was reclaimable from the contractors. In quarter 2/2017, the Company has already taken the legal action against the sub-contractor to claim for the penalties arising from construction delay. In accordance with the conservative principle, the Company records the penalties arising from construction delay incurred in 2017 in cost of construction. And fully provide provision for doubtful debt for receivables for penalties arising from delays of construction of 60.50 MB. These results in net loss attributable to equity holders of 85.63 MB in Quarter 2/2017, decreasing by 99.22 MB or 730.19% compared to net profit attributable to equity holders of 13.59 in Quarter 2/2016.

For the six months period of 2017, The Company’s revenue from sales and services totals 500.37 MB, decreasing 71.97 MB or 12.57%, compared to the revenue from sales and services of 572.34 MB in the same period of previous year. The Company’s consolidate net loss attributable to equity holders of 96.61 MB, decreasing 120.16 MB or 510.284%, compared to net profit attributable to equity holders of 23.55 MB in the same period of previous year.

Operating performance

Unit: Million baht

  Quarter 6 Months
2Q2017 2Q2016 % YoY Y2017 Y2016 % YoY
Revenue from sales 221.47 194.25 14.02% 435.55 397.71 9.51%
Revenue from rendering of services 11.86 3.26 263.71% 20.44 11.00 85.78%
Revenue from construction and service contracts 18.81 106.11 -82.27% 44.37 163.62 -72.88%
Other Revenue 2.78 1.47 88.41% 4.65 1.94 140.11%
Total Revenue 254.92 305.09 -16.44% 505.02 574.28 -12.06%
Cost of sales 162.69 144.63 12.49% 319.58 296.40 7.82%
Cost of rendering of services 14.80 0.85 1,636.27% 20.63 8.99 129.52%
Cost of construction and service contracts 43.45 94.09 -53.82% 69.43 142.51 -51.28%
Total Costs 220.95 239.58 -7.78% 409.64 447.90 -8.54%
Gross Profit 31.20 64.04 -51.28% 90.73 124.44 -27.09%
Gross Profit (%) 12.37% 21.09%   18.13% 21.74%  
Total Selling & Administrative Expenses 120.15 45.95 161.45% 190.32 92.18 106.48%
Profit (Loss) before Finance Costs and Income Taxes Expense (86.17) 19.56 -540.59% (94.94) 34.20 -377.60%
Profit (Loss) before Finance Costs and Income Taxes Expense (%) -33.80% 6.41%   -18.80% 5.96%  
Profit (Loss) attributable to equity holders (85.63) 13.59 -730.19% (96.61) 23.55 -510.28%
Net Profit (Loss) (%) -33.59% 4.45%   -19.13% 4.10%  
Basic earnings per share (Baht) (0.42) 0.08 -604.15% (0.48) 0.15 -428.22%
Weighted average number of ordinary shares (Million shares) 202.50 162.00   202.50 162.00  

Revenue

Unit: Million Baht

Revenue structure Quarter 6 Months
2Q2017 % 2Q2016 % % YoY 1Q2017 % %QoQ Y2017 % Y2016 % %YoY
Occupational Safety, Health and Environment Products (SAFETY) 185.55 74% 165.88 55% 11.86% 183.52 74% 1.10% 369.07 74% 337.84 59% 9.24%
Control Environment Products (CE) 38.94 15% 29.51 10% 31.96% 37.06 15% 5.06% 76.00 15% 59.58 10% 27.57%
Water Solution Products (WATER) 27.66 11% 108.22 36% -74.44% 27.64 11% 0.08% 55.30 11% 174.92 31% -68.39%
Total revenue from sales and services 252.15 100% 303.61 100% -16.95% 248.22 100% 1.58% 500.37 100% 572.34 100% -12.57%

In Quarter 2/2017, the Company’s sales and services were 252.15 MB, comprise 221.47 MB of revenue from sales, 11.86 MB of revenue from services and 18.81 MB of revenue from construction contracts. Total revenue decreased by 51.47 MB or 16.95%, compared with 303.61 MB in the same quarter of previous year.

Revenue from Occupational Safety, Health and Environment Products or SAFETY was 185.55 MB, which has increased by 19.67 MB or 11.86% YoY compared to the same quarter of previous year, mainly due to the revenue from sales and services of technical products and expansion of sales areas, revenue from new customers were increase. In addition, revenue from sales in government sector customers were increased.

Revenue earned from Control Environment Products or CE was 38.94 MB, increasing by 9.43 MB or 31.96% compared with the same quarter of previous year. Major customers are in the electronics industry, the overview of electronics industry has been growth due to manufacturers can adapt to changing technology. Revenue from Control Environment Products were increase.

Revenue from Water Solution Products or WATER equals 27.66 MB, decreasing by 80.56 MB or 74.44% YoY, compared with the same quarter of previous year, due to revenue recognized from construction contracting service of the community water supply project was decreased.

Cost of Sales and Services

The Company’s cost of sales and services in Quarter 2/2017 were 220.95 MB, comprising of 162.69 MB cost of sales and 14.80 MB cost of services and 43.45 MB cost of construction. Cost of sales increased proportionally with more revenue from sales. Cost of services increased proportionally with more revenue from services and depreciation cost for services. Cost of construction decreased proportionally with revenue recognized from construction contracting service. However, cost of construction was high than revenue due to the extra cost to rush the project completion and records the penalties arising from construction delay in cost of construction. In quarter 2/2017, The Company’s gross profit of 12.37% which decrease, compare with 21.09% of the same quarter of previous year.

Selling and Administrative Expenses

In Quarter 2/2017, selling and administrative expenses amounted to 120.15 MB comprising of 23.84 MB selling expenses and 92.32 MB administrative expenses. Administrative expenses were increase due to the increase in number of personnel and recorded 60.50 MB of allowance for doubtful debt for receivables for penalties arising from delays of construction.

In Quarter 2/2017, the company’s financial cost amounted to 3.34 MB, increasing due to the increase in loan from financial institution for working capital.

Net profit

The effects from from expected penalties arising from delays projects and allowance for doubtful debt for receivables for penalties arising from delays of construction, the company’s consolidate net loss (attributable to equity holders of the Company) was 85.63 MB, accounted for net loss margin 33.59%

Financial Position

Unit: Million baht

  June 30, 2017 December 31, 2016 % Change
Amount % Amount %
Current Assets 615.74 54.29% 770.07 80.14% -20.04%
Non-Current Assets 222.07 19.58% 190.88 19.86% 16.34%
Current Liabilities 509.66 44.94% 534.12 55.51% -4.58%
Non-Current Liabilities 73.41 6.47% 75.82 7.88% -3.18%
Shareholder's Equity of the Company 256.04 22.57% 352.31 36.61% -27.32%

 

Assets

As of June 30, 2017, the Company’s total assets equaled 837.81 MB, decreasing by 123.14 MB or 12.81% from December 31, 2016. The decreased assets were mainly from current assets decreasing from 127.83 MB of other receivables from allowance for doubtful debt for receivables for penalties arising from delays of construction. And unbilled receivables and prepaid expenses to the subcontractors for the construction decreased of 77.28 MB. Non-current assets amount to 222.07 MB, mainly increase from 30 MB of restricted deposits with financial institution for short-term loan facility.

Liabilities

As of June 30, 2017, the Company’s total liabilities equaled 583.07 MB, decreasing by 26.88 MB or 4.41% from December 31, 2016. The decreased liabilities mainly due to moving the penalties arising from construction delay to cost of construction.

Shareholder’s equity

As of June 30, 2017, Total shareholders' equity of the Company was 256.04 MB, decrease due to the resulting from 96.61 MB of net loss for the period.

Cash Flows

Unit: Million Baht

Cash Flows June 30, 2017 June 30, 2016
Cashflow from (used in) operating activities 50.28 (156.92)
Cashflow from (used in) investing activities (32.74) (5.22)
Cashflow from (used in) financing activities (18.49) 138.90
Net increase (decrease) in cash and cash equivalents (0.95) (23.23)
Cash and cash equivalents at the end of the period 48.65 36.01

The Company’s net cash acquired from the operating activities was 50.28 MB, with operating profits prior to changes in the operating assets and liabilities of 13.15 MB. The major reason for the change, due to the trade and other receivables increased 58.89 MB, and unbilled receivables and prepaid expenses to the subcontractors for the construction decreased of 77.29 MB and trade and other payable were increased of 16.07 MB.

Cash flow utilized in investment activities amounts to 32.74 MB, mainly from 30 MB of restricted deposits with financial institution for short-term loan facility and 3.69 MB was used to purchase fix assets.

Cash flow utilized in financing activities amounts to 18.49 MB; mainly from repayment of loans from financial institutions of 8.82 MB and debt settlement according to financial lease of 3.8 MB was arranged, with an interest expense of 5.87 MB.


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Management Discussion & Analysis (MD&A) Yearly 2016

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Overview

In its consolidated financial statements as of December 31, 2016, Phol Dhanya Pubic Company Limited (The company) recorded revenue from sales and services of 1,097.99 MB, increasing 183.09 MB or 20.01% compared to the revenue from sales and services of 914.90 MB in the previous year. The incremental revenue was mainly contributed by construction of community water system. However, due to the company’s insufficiency of construction foremen and lack of project management experience, the project faced inefficiency problem, especially in 4Q16, in which there were many ongoing projects with intense workloads and nearly the same project start and delivery dates. This led to inadequacy of labor and delayed completion of the construction of community water system. In 4Q16, the company estimated liabilities arising from the delay of this project for 97.11 MB, 80.39 MB of which was reclaimable from the contractors. Furthermore, some contractors left the site during the construction, resulting in non-reclaimable damage from delayed project completion and handover. The company, consequently, recorded liabilities from expected penalties of delayed project delivery of 56.51 MB. In response, the company promptly proceeded to replenish workers to accelerate the delayed construction, leading to additional expense and cost. These results in net loss attributable to equity holders of 15.25 MB in 2016, decreasing by 49.56 MB or 144.43% compared to net profit attributable to equity holders of 34.31 in 2015.

Operating performance

Unit : MB

  Y2016 Y2015 % YoY
Revenue from sales 816.53 847.39 -3.64%
Revenue from rendering of services 21.11 9.42 124.18%
Revenue from construction and service contracts 260.35 58.09 348.16%
Other Revenue 4.87 3.04 60.27%
Total Revenue 1,102.87 917.94 20.15%
Cost of sales 606.72 624.78 -2.89%
Cost of rendering of services 21.88 6.91 216.47%
Cost of construction and service contracts 232.74 42.92 442.24%
Total Costs 861.34 674.62 27.68%
Gross Profit 236.65 240.29 -1.51%
Gross Profit (%) 21.55% 26.26% -4.71%
Total Selling & Administrative Expenses 246.79 196.31 25.71%
Profit (Loss) before Finance Costs and Income Taxes Expense (5.26) 47.02 -111.20%
Profit (Loss) before Finance Costs and Income Taxes Expense (%) (0.48%) 5.12% -5.60%
Profit (Loss) attributable to equity holders (15.25) 34.31 -144.43%
Net Profit (%) (1.38%) 3.74% -5.12%
Basic earnings per share (Baht) (0.08) 0.21 -137.93%
Weighted average number of ordinary shares (Million shares)* 189.80 162.00  

*In 2016, The Company has increases, Issuance of the Capital Increase Ordinary Shares offered for the existing shareholder of the Company proportionately to their shareholding (RO) of 40,499,996 Shares

Revenue

Unit : MB

Revenue structure 2016 % 2015 % %YoY
Occupational Safety, Health and Environment Products (SAFETY) 687.37 62.60% 715.45 78.20% -3.92%
Control Environment Products (CE) 130.29 11.87% 104.82 11.46% 24.30%
Water Solution Products (WATER) 280.34 25.53% 94.64 10.34% 196.22%
Total revenue from sales and services 1,097.99 100% 914.90 100% 20.01%

In 2016, the company’s sales and services were 1,097.99 MB, increasing by 183.09 MB or 20.01%, compared with 914.90 MB of previous year.

Revenue from sales and services of Occupational Safety, Health and Environment Products (SAFETY) was 687.37 MB, dropping by 28.08 MB, or 3.92%, from the previous year. Overall, related industries expanded at a moderate pace, especially those of our core customers, including automobile manufacturing industry which slightly expanded on a y-o-y basis. Continuously affected by oil price instability, the customers in petrochemical industry cut their budgets and number of staff, leading to reduction in demand for SAFETY products. And revenue from government sector also declined as the company won fewer bids compared to 2015 owning to its policy not to focus on projects with excessively low gross margin. Nevertheless, the company adjusted its strategy by expanding sales area to obtain new customers. Collaboration with trade partners in market expansion and improvement of sales force’s product knowledge also brought in incremental SAFETY sales from new customers and new products. Financial, improvement in after-sales services for technical products led to increased revenue from service rendering.

Revenue from sales of Control Environment Products (CE) was 130.29 MB, increasing by 25.47 MB, or 24.30%, compared to the previous year. Core customers continued to be companies in electronic industry, although the industry was impacted by market slowdown and changes in technologies. Despite the fact that competition in CE products was naturally intense, CE customers do not frequently change the suppliers due to concerns over impact on their production process. With this in mind, the company aimed at optimizing cost, increasing the speed of service, and building brand loyalty to retain existing customer base in order to boost revenue from sales of CE products.

Revenue from Water Solution Products (WATER) amounts to 280.34 MB, increasing by 185.70 MB or 196.22% compared with the previous year, due to the revenue recognized from construction contracting service of the community water supply project of 252.01 million baht.

Cost of Sales and Services

In 2016, The company’s cost of sales and services was 861.34 MB, comprising of 606.72 MB cost of sales which decreased variable from lower revenue from sales. And 21.88 MB cost of services increased due to revenue from SAFETY services was increase compare with the previous year and 232.74 MB cost of construction and service contracts was increase variable from the proportion revenue from construction.

Cost of sales and services was accounted for 78.45% of total sales and services revenue, revenue since gross profit of the construction contracting service for the community water supply project is not very high, and had incremental cost from construction projects, and the reduced gross profits from sales due to the competition in the market. In addition, gross profit of service is not very high due to fix cost from depreciation but lower revenue from services, leading to a gross profit of 21.55% which decrease, compare with 26.26% of the previous year.

Selling and Administrative Expenses

In 2016, selling and administrative expenses amounted to 246.79 MB comprised of selling expenses amounted to 92.30 MB. Selling expenses was decrease due to employees’ compensation which variable from lower revenue from sales, including commission and incentives. And 97.98 MB of administrative expenses, increase due to the increase in number of personnel and recorded 56.51 MB of liabilities from expected penalties arissing from delays of constructions which cannot collect from sub-contractors.

In 2016, the company’s financial cost amounted to 11.01 MB, increasing due to the increase in loan from financial institution for working capital.

Net profit

The effects from estimated liabilities from expected penalties arissing from delays projects, the company’s consolidate net loss (attributable to equity holders of the Company) was 15.25 MB, accounted for net loss margin 1.38% which decrease compare with 32.31 MB, accounted for net profit margin 3.74% in the previous year.

Profitability Ratio

Consolidated 2016 2015
Gross Profit Margin 21.55% 26.26%
Operating Profit Margin 1.34% 6.70%
Net Profit (Loss) Margin (1.38%) 3.74%
Return on Equity (4.53%) 10.61%

Financial Position

Unit : MB

  December 31, 2016 December 31, 2015 % Change
Amount % Amount %
Assets 960.95 100.00% 667.40 100.00% 43.99%
Liabilities 619.95 63.48% 346.10 51.86% 76.23%
Shareholders’ equity of the Company 352.31 36.53% 322.59 48.14% 9.21%

Assets

As of December 31, 2016, the company’s total assets equaled 960.95 MB, increasing by 293.56 MB or 43.99% from December 31, 2015. The increased assets were mainly from current assets acquired from advance payment for construction of the Community Water Supply Project increase 5.36 MB. Receivables for penalties arising from delays of constructions increase 11.24 MB, advance payments increase 13.82 MB and unbilled receivables was increase 127.74 MB. Inventories-net increase from finish goods 11.16 MB and construction contracts in progress increased 2.79 MB and allowance for diminution in value of inventories increased by 2.08 MB.

Non-current assets were increase, due to the increase from property, plant and equipment from purchased 21.87 MB of Water well drilling machines, 8.17 MB of furniture and equipment, 6.70 MB of construction in progress and 2.75 MB of other assets. Non-current assets were decrease from amortization amount to 7.79 MB and depreciation amount to 18.83 MB.

Liabilities

As of December 31, 2016, the company’s total liabilities equaled 619.95 MB, increasing by 263.85 MB or 76.23% from December 31, 2015 mainly due to the increased from short-term loans from financial institutions increased 174.45 MB. The Company issued and offered additional unsecured Bill of Exchange increase 100 million baht In addition, promissory notes were increase 35 MB and short-term loan - trust receipt was increase 39.84 MB for working capital. And recorded penalties arissing from delays of constructions amount to 56.51 MB. However, trade and other payables were decrease by 27.26 MB.

Non-current liabilities were increase mainly due to the increase from liabilities under finance lease amount to 15.13 MB and of 32.32 MB of the long-term loans from financial institution. Employee benefit obligations was increase 2.70 MB.

Shareholder’s equity

As of December 31, 2016, Shareholders’ equity of the Company was 352.31 MB. In quarter 3/2016, the company issue and allot 40,499,996 new ordinary shares (at the par value of Baht 1) to the existing shareholders (Rights Offer) at a ratio of 4 existing shares to 1 new ordinary share, at an offer price of Baht 2 per share. The company has received the whole amount of money (more detail : the note 22 to the financial statements for year 2016) As of December 31, 2016, the company issued and paid-up share capital amount to 202.50 MB and premium on share capital were increase 40.15 MB. Retained earnings was decrease due to the resulting from net loss was 15.25 MB and decreasing by 35.64 million baht from dividend payment.

In 2016, the Company had debt-to-equity ratio of 1.74 times, increased from 1.07 times in 2015, due to the increase in liabilities.

Emphasis of matter

Attention to the Note 31 to the financial statements for year 2016, during, the Company found the error due to un-recognition of change in the Company’s ownership interest in subsidiary company (PD Genesis Engineering Co., Ltd). Therefore the Company made an adjustment by increasing the deficit from the change in the ownership interests in the consolidated financial statements amount to 1.54 million baht. As such, the consolidated statements of financial position as at December 31, 2015 and January 1, 2015, of the company which have been presented herewith for comparative purposes, have been restated for the effect of such adjustment.

Cash Flows

Unit : MB

Cash Flows December 31, 2016 December 31, 2015
Cashflow from (used in) operating activities (238.14) (23.21)
Cashflow from (used in) investing activities (14.54) (4.29)
Cashflow from (used in) financing activities 242.47 55.20
Net increase (decrease) in cash and cash equivalents (10.21) 27.70
Cash and cash equivalents at the end of the period 48.85 59.14

The Company’s net cash utilized in the operating activities was 238.14 MB, with operating profits prior to changes in the operating assets and liabilities of 77.30 MB. The major reason for the change was due to the trade and other receivables were increase 23.87 MB and unbilled receivables and prepaid expenses for the construction of the community water supply projects of 238.08 MB. However, trade and other payables were decrease by 26.09 MB.

Cash flow used in investment activities amounts to 14.54 MB to purchase equipment and other assets amount to 10.92 MB and Assets under water sales agreement amount to 6.70 MB. Meanwhile, cash flow received from sales of fix assets totals 1.56 MB and interests received of 0.74 MB.

Cash flow acquired from financing activities amounts to 242.47 MB from short-term loans were increased by 169.10 MB and loans from financial institution were increased by 50 MB. And cash flow received from increase in share capital amount to 80.65 MB. At the same time, loan repayment to financial institutions amounts to 12.55 MB and debt settlement according to financial lease of 3.93 MB, with an interest expense of 5.16 MB and dividend payment of 35.64 MB.

Expected performance in 2017

Thai economy is expected to gradually expand, supported by economy-boosting government policies and government investment which has continued from the previous year. Production in various industries is seen to be spurred by domestic consumption. Export, which depends on global economy and global trade and, therefore, is impacted by multiple risk factors and instabilities, is also expected to increase. These are supporting factors for industry sector’s product demand. Corporate sector’s demand for SAFETY and CE products is expected to rise accordingly. With this prospect, the company aims at offering comprehensive services, developing expertise for its personnel, developing new products to seize market share, better serve existing customers, and expand into the customer base in which the company’s market share is small, and increasing market share for the company’s house brands.

The company still sees possibility for growth in its water solution business as it will be bolstered by continuing government policy on water management and the constant need for water treatment systems in industry sector. The company believes that, by virtue of its potential and determination, it will be able to develop personnel and working team to be experts in the business. Improvement in efficient project management and adjustment of internal processes will drive the company’s water solution business to grow and create sustainable profits for the company in the future.

Management Discussion & Analysis (MD&A) Quarter 3/2016

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Overview

In Quarter 3/2016, Phol Dhanya Public Company Limited (the Company)’s revenue from sales and services totals 275.82 million baht, increasing by 48.71 million baht or 21.45% YoY, compare with 227.11 million baht in the same quarter of the previous year, due to the increase of revenue from rendering of services from the community water supply projects. In Quarter 3/2016, the Company’s net profit (attributable to owners of the parent) was 9.75 million baht, increasing by 7.09 million baht or 271.85% YoY compare with 2.61 million baht in the same quarter of the previous year. However, revenue from community water supply projects have lower margin, causing the average gross profit margin in Quarter 3/2016 was account for 23.17%, decrease from 24.97% in the same quarter of the previous year.

For the year, ended September 30, 2016, The company’s revenue from sales and services totals 848.16 million baht, increasing by 203.96 million baht or 31.66%, compared with 644.20 million baht in the same period of previous year. The Company’s consolidate net profit (attributable to owners of the parent) was 33.25 million baht, increasing by 15.15 million baht or 83.72%, compared with 18.10 million baht in the same period of previous year.

Operating performance

Unit : Million baht

  Quarter 9 Month
3Q2016 3Q2015 % YoY 2Q2016 % QoQ Y2016 Y2015 % YoY
Revenue from sales 207.86 222.99 -6.78% 194.25 7.01% 605.58 637.13 -4.95%
Revenue from rendering of services 67.96 4.12 1551.03% 109.37 -37.86% 242.58 7.07 3331.21%
Other Revenue 1.88 0.48 292.89% 1.47 27.55% 3.82 2.37 61.09%
Total Revenue 277.70 227.59 22.02% 305.09 -8.98% 851.98 646.57 31.77%
Cost of sales 152.97 166.74 -8.26% 144.63 5.76% 449.36 467.41 -3.86%
Cost of rendering of services 58.96 3.66 11.71% 94.94 -37.90% 210.46 5.88 3477.21%
Total Costs 211.92 170.39 24.37% 239.58 -11.54% 659.83 473.29 39.41%
Gross Profit 63.90 56.71 12.67% 64.04 -.022% 188.33 170.91 10.19%
Gross Profit (%) 23.17% 24.97% -1.81% 21.09% 2.07% 22.20% 26.53% -4.33%
Total Selling & Administrative Expenses 50.30 52.19 -3.62% 45.95 9.45% 142.47 145.52 -2.10%
EBIT 15.48 5.01 209.21% 19.56 -20.85% 49.68 27.76 78.96%
EBIT (%) 5.57% 2.20% 3.37% 6.41% -0.84% 5.83% 4.29% 1.54%
Net Profit (Equity holders of the Company) 9.70 2.61 271.85% 13.59 -28.62% 33.25 18.10 83.72%
Net Profit (%) 3.49% 1.15% 2.35% 4.45% -21.58% 3.90% 2.80% 1.10%
Basic earnings per share (Baht) 0.06 0.02 271.85% 0.08 -28.62% 0.11 0.11 83.72%
Weighted average number of ordinary shares (Million shares) 162.00 162.00 0.00% 162.00 0.00% 162.00 162.00 0.00%

Revenue

Unit : Million Baht

Revenue structure Quarter 9 Month
3Q2016 % 3Q2015 % % YoY 2Q2016 % %QoQ Y 2016 % Y 2015 % %YoY
Occupational Safety, Health and Environment Products (SAFETY) 174.48 63% 184.79 81% -5.58% 165.88 55% 5.18% 512.33 60% 527.77 82% -293%
Control Environment Products (CE) 33.94 12% 30.18 13% 12.45% 29.51 10% 15.02% 93.52 11% 83.11 13% 12.52%
Water Solution Products (WATER) 67.40 24% 12.14 5% 455.19% 108.22 36% -37.72% 242.31 29% 33.32 5% 627.19%
Total revenue from sales and services 275.82 100% 227.11 100% 21.45% 303.61 100% -9.15% 848.16 100% 644.20 100% 31.66%

In Quarter 3/2016, the Company’s revenue from sales and services were 275.82 million baht, increasing by 48.71 million baht or 21.45%, compared with 227.11 million baht in the same quarter of previous year.

Revenue from Occupational Safety, Health and Environment Products or SAFETY amounts to 174.48 million baht, decreasing by 10.31 million baht or 5.58% YoY, compared with the same quarter of previous year. In general, production sector has not expanded much. For example, automotive industry expanded a little compare with the last year, and petrochemical industry had been affected from the oil price volatility, budget and worker reduction, This cause the reduction in the demand of Safety products. However, the company has adjusted the strategy by expanding sales coverage area, revenue from new customers were increase.

Revenue from Control Environment Products or CE amounts to 33.94 million baht, increasing by 3.76 million baht or 12.45% compared with the same quarter of previous year. Major customers are in the electronics industry. The Company emphasizes on retaining existing customers with high potential and identifying competitive products to increase revenue from the CE Products.

Revenue from Water Solution Products or WATER amounts to 67.40 million baht, increasing by 55.26 million baht or 455.19% YoY, compared with the same quarter of previous year, due to the revenue recognized from construction contracting service of the community water supply project of 62.11 million baht.

Cost of Sales and Services

The Company’s cost of sales and services in Quarter 3/2016 was 211.92 million baht, comprising of 152.97 million baht cost of sales and 58.96 million baht cost of services. The latter has increased proportionally with more services rendered. Costs of sales and services account for 76.83% of sales and service revenue since gross profit of the construction contracting service for the community water supply project is not very high, coupled with the reduced gross profits from sales due to the competition in the market, leading to a gross profit of 23.17%.

Selling and Administrative Expenses

In Quarter 3/2016, selling and administrative expenses amounted to 50.30 million baht comprised of selling expenses amounted to 24.75 million baht and administrative expenses amounted to 25.54 million baht. The increase in selling and administrative expenses increase due to the increase in number of personnel. However, Selling and Administrative expenses were decrease due to the same period of previous year; the Company was recorded loss on impairment on assets 2.58 million baht and loss on exchange rate 1.03 million baht.

In Quarter 3/2016, the Company’s financial cost amounted to 3.46 million baht, increasing by 2.38 million baht or 220.43%, due to the increase in loan from financial institution to support the water treatment business.

Net profit

In Quarter 3/2016, the Company’s consolidate net profit (attributable to equity holders of the Company) was 9.70 million baht, accounted for net profit margin 3.49%. The Company’s net profit was increase by 7.09 million baht or 271.85% YoY compare with 2.62 million baht, accounted for net profit margin 2.35% in the same quarter of the previous year.

Financial Position

Unit : Million baht

  September 30, 2016 December 31, 2015
(Restated)
% Change
Amount % Amount %
Assets 1,107.56 100.00% 667.40 100.00% 65.95%
Liabilities 707.82 63.91% 346.10 51.86% 104.51%
Shareholders’ equity of the Company 400.97 36.20% 322.59 48.34% 24.30%

Assets

As of September 30, 2016, the Company’s total assets equaled 1,107.56 million baht, increasing by 440.16 million baht or 65.95% from December 31, 2015. The increased assets were mainly from current assets acquired from unbilled receivables amount to 142.67 million baht and advance payment for construction of the Community Water Supply Project amount to 69.47 million baht. Current deposits was increase from excess of share subscription.

Liabilities

As of September 30, 2016, the Company’s total liabilities equaled 707.82 million baht, increasing by 361.72 million baht or 104.51% from December 31, 2015 mainly due to the increased from short-term loans from financial institutions amount to 226.68 million baht. The Company issued and offered additional unsecured Bill of Exchange increase 100 million baht In addition, the short-term loan, promissory notes and bank overdraft were increase 127.12 million baht and other payables were increase by 110.18 million baht from excess of share subscription. Non-current liabilities were increase mainly due to the long-term loans from financial institution of 50 million baht and Employee benefit obligations was increase 2 million baht.

Shareholder’s equity

As of September 30, 2016, Shareholders’ equity of the Company was 400.97 million baht. In quarter 3/2016, the company issue and allot 40,499,996 new ordinary shares (at the par value of Baht 1) to the existing shareholders (Rights Offer) at a ratio of 4 existing shares to 1 new ordinary share, at an offer price of Baht 2 per share. The company has received the whole amount of money (more detail : the note 22 to the financial statements for quarter 3/2016) In quarter 3/2016, the company issued and paid-up share capital amount to 202.50 million baht and premium on share capital were increase 40.15 million baht. The resulting from net profit was amount to 33.25 million baht and decreasing by 35.64 million baht from dividend payment.

Emphasis of matter

Attention to the Note 28 to the financial statements for quarter 3/2016, during, the Company found the error due to un-recognition of change in the Company’s ownership interest in subsidiary company (PD Genesis Engineering Co., Ltd). Therefore the Company made an adjustment by increasing the deficit from the change in the ownership interests in the consolidated financial statements amount to 1.54 million baht. As such, the consolidated statements of financial position as at December 31, 2015 and January 1, 2015, of the company which have been presented herewith for comparative purposes, have been restated for the effect of such adjustment.

Cash Flows

Unit : Million Baht

Cash Flows September 30, 2016 September 30, 2015
Cashflow from (used in) operating activities (111.09) (4.38)
Cashflow from (used in) investing activities (11.20) (20.79)
Cashflow from (used in) financing activities 302.81 27.66
Net increase (decrease) in cash and cash equivalents 180.52 2.50
Cash and cash equivalents at the end of the period 239.83 33.97

The Company’s net cash utilized in the operating activities was 111.09 million baht, with operating profits prior to changes in the operating assets and liabilities of 66.33 million Baht. The major reason for the change was due to the trade and other receivables were increase 29.93 million baht and unbilled receivables and prepaid expenses for the construction of the community water supply projects of 212.15 million baht. In addition, other payables were increase by 110.18 million baht from excess of share subscription.

Cash flow used in investment activities amounts to 11.20 million baht to purchase machinery and equipment for water treatment service amount to 6.76 million baht and 1.5 million baht was disposed of to purchase assets for service provision of the SAFETY Products, and 4.73 million Baht was used to purchase equipment and other assets. Meanwhile, cash flow received from sales of fix assets totals 1.11 million baht and interests received of 0.61 million baht.

Cash flow acquired from financing activities amounts to 302.81 million baht; bank overdraft and short-term loans were increased by 223.08 million baht and loans from financial institution were increased by 50 million baht. And cash flow received from increase in share capital amount to 80.65 million baht. At the same time, loan repayment to financial institutions amounts to 9.26 million baht and debt settlement according to financial lease of 2.36 million baht was arranged, with an interest expense of 3.66 million baht and dividend payment of 35.64 million baht.

Management Discussion & Analysis (MD&A) Quarter 2/2016

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Overview

In Quarter 2/2016, Phol Dhanya Public Company Limited (the Company)’s revenue from sales and services totals 303.61 million baht, increasing by 90.59 million baht or 42.53% YoY, compare with 213.02 million baht in the same quarter of the previous year, due to the increase of revenue from rendering of services from the community water supply projects. In Quarter 2/2016, the Company’s net profit was 13.59 million baht, increasing by 9.06 million baht or 200.14% YoY compare with 4.53 million baht in the same quarter of the previous year. However, revenue from community water supply projects have lower margin, causing the average gross profit margin in Quarter 2/2016 was account for 21.09%, decrease from 27.80% in the same quarter of the previous year.

For the six months period of 2016, The company’s revenue from sales and services totals 572.34 million baht, increasing by 155.24 million baht or 37.22%, compared with 417.09 million baht in the same period of previous year. The Company’s consolidate net profit (attributable to owners of the parent) was 23.55 million baht, increasing by 8.06 million baht or 52.04%, compared with 15.49 million baht in the same period of previous year.

Operating performance

Unit : Million baht

  Quarter 6 Month
2Q2016 2Q2015 % YoY 1Q2016 % QoQ Y2016 Y2015 % YoY
Revenue from sales 194.25 211.39 -8.11% 203.47 -4.53% 397.71 414.14 -3.97%
Revenue from rendering of services 109.37 1.63 6602.37% 65.26 67.60% 174.63 2.95 5811.85%
Other Revenue 1.47 1.06 39.38% 0.47 216.79% 1.94 1.91 1.42%
Total Revenue 305.09 214.08 42.51% 269.19 13.34% 574.28 419.01 37.06%
Cost of sales 144.63 152.65 -5.25% 151.77 -4.70% 296.40 300.67 -1.42%
Cost of rendering of services 94.94 1.15 8191.17% 56.56 67.87% 151.50 2.23 6708.45%
Total Costs 239.58 153.80 55.77% 208.33 15.00% 447.90 302.90 47.87%
Gross Profit 64.04 59.23 8.13% 60.40 6.03% 124.44 114.20 8.96%
Gross Profit (%) 21.09% 27.80% -6.71% 22.48% -1.38% 21.74% 27.38% -5.64%
Total Selling & Administrative Expenses 45.95 52.20 -11.97% 46.22 -0.58% 92.18 93.36 -1.27%
EBIT 19.56 8.08 141.98% 14.64 33.58% 34.20 22.75 50.30%
EBIT (%) 6.41% 3.78% 2.64% 5.44% 0.97% 5.96% 5.43% 0.52%
Net Profit (Equity holders of the Company) 13.59 4.53 200.14% 9.96 36.42% 23.55 15.49 52.04%
Net Profit (%) 4.45% 2.11% 2.34% 3.70% 20.37% 4.10% 3.70% 0.40%
Basic earnings per share (Baht) 0.08 0.03 200.14% 0.06 36.42% 0.15 0.10 52.04%
Weighted average number of ordinary shares (Million shares) 162.00 162.00 0.00% 162.00 0.00% 162.00 162.00 0.00%

Revenue

Unit : Million Baht

Revenue structure Quarter 6 Month
2Q2016 % 2Q2015 % % YoY 1Q2016 % %QoQ Y 2016 % Y 2015 % %YoY
Occupational Safety, Health and Environment Products (SAFETY) 165.88 55% 172.74 81% -3.97% 171.96 64% -3.53% 337.84 59% 342.98 82% -1.50%
Control Environment Products (CE) 29.51 10% 25.63 12% 15.13% 30.07 11% -1.87% 59.58 10% 52.93 13% 12.56%
Water Solution Products (WATER) 108.22 36% 14.65 7% 638.55% 66.69 25% 62.27% 174.91 31% 21.19 5% 725.51%
Total revenue from sales and services 303.61 100% 213.02 100% 42.53% 268.72 100% 12.98% 572.33 100% 417.10 100% 37.22%

In Quarter 2/2016, the Company’s revenue from sales and services were 303.61 million baht, increasing by 90.59 million baht or 42.53%, compared with 213.02 million baht in the same quarter of previous year.

Revenue from Occupational Safety, Health and Environment Products or SAFETY amounts to 165.88 million baht, decreasing by 6.86 million baht or 3.97% YoY, compared with the same quarter of previous year. However, Industrial market overview in Quarter 2/2016 was slowdown, the customer’s purchasing power were lower than expectancy due to the limited budget and pending projects of the customers.

Revenue from Control Environment Products or CE amounts to 29.51 million baht, increasing by 3.88 million baht or 15.13% compared with the same quarter of previous year. Major customers are in the electronics industry. The Company emphasizes on retaining existing customers with high potential and identifying competitive products to increase revenue from the CE Products.

Revenue from Water Solution Products or WATER amounts to 108.22 million baht, increasing by 93.57 million baht or 638.55% YoY, compared with the same quarter of previous year, due to the revenue recognized from construction contracting service of the community water supply project of 103.94 million baht. As of June 30, 2016, the project value that has not been delivered is approximately 260 million baht.

Cost of Sales and Services

The Company’s cost of sales and services in Quarter 2/2016 was 239.58 million baht, comprising of 144.63 million baht cost of sales and 94.94 million baht cost of services. The latter has increased proportionally with more services rendered. Costs of sales and services account for 78.91% of sales and service revenue since gross profit of the construction contracting service for the community water supply project is not very high, coupled with the reduced gross profits from sales due to the competition in the market, leading to a gross profit of 21.09%.

Selling and Administrative Expenses

In Quarter 2/2016, selling and administrative expenses amounted to 45.95 million baht comprised of selling expenses amounted to 22.24 million baht and administrative expenses amounted to 23.72 million baht. Selling and Administrative expenses were decrease due to the same period of previous year; the Company was recorded loss on impairment on assets 2.58 million baht and loss on exchange rate 2.38 million baht.

In Quarter 2/2016, the Company’s cost of financial amounted to 2.35 million baht, increasing by 1.38 million baht or 142.19%, due to the increase in loan from financial institution to support the water treatment business.

Net profit

In Quarter 2/2016, the Company’s consolidate net profit (attributable to equity holders of the Company) was 13.59 million baht, accounted for net profit margin 4.45%. The Company’s net profit was increase by 9.06 million baht or 200.14% YoY compare with 4.53 million baht, accounted for net profit margin 2.11%. in the same quarter of the previous year.

Financial Position

Unit : Million baht

  June 30, 2016 December 31, 2015
(Restated)
% Change
Amount % Amount %
Assets 832.99 100.00% 667.40 100.00% 24.81%
Liabilities 507.46 60.92% 346.10 51.86% 46.62%
Shareholders’ equity of the Company 326.76 39.23% 322.59 48.34% 1.29%

Assets

As of June 30, 2016, the Company’s total assets equaled 832.99 million baht, increasing by 165.59 million baht or 24.81% from December 31, 2015. The increased assets were mainly from current assets acquired from unbilled receivables and from prepaid expenses to the subcontractors for the construction of the water purification system of 139.66 million baht. The net remaining inventory has increased by 53 million baht due to the increase of raw materials for construction of the community water supply projects.

Liabilities

As of June 30, 2016, the Company’s total liabilities equaled 507.46 million baht, increasing by 161.36 million baht or 46.62% from December 31, 2015 mainly due to the increased from short-term loans from financial institutions amount to 113.40 million baht. In Quarter 2/2016, the Company issued and offered additional unsecured Bill of Exchange amount to 50 million baht and the Company issued and offered unsecured Bill of Exchange amount to 100 million baht for roll-over the matured original Bill of Exchange. In addition, the short-term loan, promissory notes and bank overdraft were increase 69.76 million baht. Non-current liabilities were increase mainly due to the long-term loans from financial institution of 50 million baht in preparation for business expansion.

Shareholder’s equity

As of June 30, 2016, Shareholders’ equity of the Company was 326.76 million baht, increase by 23.55 million baht from the resulting from net profit and decreasing by 19.44 million baht from dividend payment.

Emphasis of matter

Attention to the Note 27 to the financial statements for quarter 2/2016, during, the Company found the error due to un-recognition of change in the Company’s ownership interest in subsidiary company (PD Genesis Engineering Co., Ltd). Therefore the Company made an adjustment by increasing the deficit from the change in the ownership interests in the consolidated financial statements amount to 1.54 million baht. As such, the consolidated statements of financial position as at December 31, 2015 and January 1, 2015, of the company which have been presented herewith for comparative purposes, have been restated for the effect of such adjustment.

Cash Flows

Unit : Million Baht

Cash Flows June 30, 2016 June 30, 2015
Cashflow from (used in) operating activities (156.92) (17.85)
Cashflow from (used in) investing activities (5.22) (5.01)
Cashflow from (used in) financing activities 138.90 26.26
Net increase (decrease) in cash and cash equivalents (23.23) 3.36
Cash and cash equivalents at the end of the period 36.01 34.95

The Company’s net cash utilized in the operating activities is 156.92 million baht, with operating profits prior to changes in the operating assets and liabilities of 48.24 million Baht. The major reason for the change was due to the unbilled receivables and prepaid expenses to the subcontractors for the construction of the community water supply projects of 142.33 million baht. Net inventory was increased by 53.94 million baht due to the increase of raw materials for construction of the community water supply projects. However, trade and other payables were decrease by 12.06 million baht.

Cash flow used in investment activities amounts to 5.22 million baht. 1.5 million baht was disposed of to purchase assets for service provision of the SAFETY Products, and 3.33 million Baht was used to purchase equipment and other assets. Loans to employees was increased by 0.88 million baht. Meanwhile, cash flow received from sales of fix assets totals 0.93 million baht and interests received of 0.25 million baht.

Cash flow acquired from financing activities amounts to 138.90 million baht; loans from financial institution were increased by 50 million baht, and bank overdraft and short-term loans were increased by 119.76 million baht. At the same time, loan repayment to financial institutions amounts to 5.98 million baht and debt settlement according to financial lease of 1.79 million baht was arranged, with an interest expense of 3.65 million baht and dividend payment of 19.44 million baht.

Management Discussion & Analysis (MD&A) Quarter 1/2016

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Overview

In Quarter 1/2016, Phol Dhanya Public Company Limited (the Company)’s revenue from sales and services totals 268.72 million baht, increasing by 64.65 million baht or 31.68% YoY, compare with 204.07 million baht in the same quarter of the previous year, due to the increase services revenue of the community water supply projects.

However, the Company’s gross profit margin was decrease, due to revenue from community water supply projects which have lower margin, In addition, gross profit margin from sales was decrease also due to the higher competition, causing the average gross profit margin in Quarter 1/2016 to drop. In addition, the Company’s selling and administrative expenses and financial cost were increase, so the net profit (attributable to equity holders of the Company) was 9.96 million baht, decreasing by 1 million baht or 9.13% compared with 10.96 million baht in the same quarter of previous year.

Operating performance

Unit: Million baht

  1Q2016 1Q2015 % YoY 4Q2015 % QoQ
Revenue from sales 203.47 202.75 0.35% 210.26 -3.23%
Revenue from rendering of services 65.26 1.32 4836.11% 60.44 7.97%
Other Revenue 0.47 3.23 -85.60% -1.73 -126.94%
Total Revenue 269.19 207.30 29.85% 268.97 0.08%
Cost of sales 151.77 148.02 2.53% 157.37 -3.56%
Cost of redering of services 56.56 1.08 5136.46% 43.95 28.68%
Total Costs 208.33 149.10 39.72% 201.33 3.48%
Gross Profit 60.40 54.98 9.86% 69.37 -12.94%
Gross Profit (%) 22.48% 26.94% -4.46% 25.63 -3.15%
Total Selling & Administrative Expenses 46.22 43.53 6.17% 48.39 -4.48%
EBIT 14.64 14.67 -0.20% 19.26 -23.96%
EBIT (%) 5.44% 7.08% -1.64% 7.16 -1.72%
Net Profit (Equity holders of the Company) 9.96 10.96 -9.13% 16.22 -38.58%
Net Profit (%) 3.70% 5.29% -1.59% 6.03 -38.63%
Basic ernings per share (Baht) 0.06 0.07 -9.13% 0.10 -38.58%
Weighted average number of ordinary shares (Million shares) 162.00 162.00   162.00  

Revenue

Unit: Million Baht

Revenue structure 1Q2016 % 1Q20415* % %YoY 4Q2015 % % QoQ
Ocupational Safety, Health and Environment Products (SAFETY) 171.96 64% 170.24 83% 1.01% 181.11 67% -5.05%
Control Environment Products (CE) 30.07 11% 27.30 13% 10.15% 28.01% 10% 7.34%
Water Treatment Products (WATER) 66.69 25% 6.53 3% 921.29% 61.58 23% 8.30%
Total revenue from sales and services 268.72 100% 204.07 100% 31.68% 270.70 100% -0.73%

Note:* The Company reclassified the type of revenue between SAFETY and CE Products, so the revenue structure had changed.

In Quarter 1/2016, the Company’s sales and services were 268.72 million baht, increasing by 64.65 million baht or 31.68%, compared with 204.07 million baht in the same quarter of previous year.

Revenue from Occupational Safety, Health and Environment Products or SAFETY was 171.96 million baht, which has increased slightly by 1.72 million baht or 1.01% YoY. The overall market for Safety products does not expand much in Quarter 1/2016, especially major industries e.g. automotive, with domestic purchasing power still not fully recovered, in spite of increasing manufacturing for export. Meanwhile, customers in the petrochemical industry got affected from the drop in oil price, leading to a budget cut and labor force reduction, subsequently lowering purchasing power in Safety products. However, the Company’s customers are dispersed in almost every industry, with the focus of sustaining growth in the existing customer base by increasing a more comprehensive product portfolio and finding new customers by expanding sales territory so that the Company can maintain growth in safety products.

The revenue earned from Control Environment Products or CE amounts to 30.07 million baht, increasing by 2.77 million baht or 10.15% compared with the same quarter of previous year. Major customers are in the electronics industry. The Company emphasizes on retaining existing customers with high potential and identifying competitive products to increase revenue from the CE Products.

Revenue from Water Treatment Products or WATER equals 66.69 million baht, increasing by 60.16 million baht or 921.29% YoY, comprising of revenue from system and water purification equipment sales of 4.88 million baht, sales of recycling waste water system of 5.52 million baht and revenue recognized from construction contracting service of the community water supply project of 56.29 million baht. As of March 31, 2016, the project value that has not been delivered is 365 million baht.

Cost of Sales and Services

The Company’s cost of sales and services in Quarter 1/2016 is 208.33 million baht, comprising of 151.77 million baht cost of sales and 56.56 million baht cost of services. The latter has increased proportionally with more services rendered. Costs of sales and services account for 77.52% of sales and service revenue since gross profit of the construction contracting service for the community water supply project is not very high, coupled with the reduced gross profits from sales due to the competition in the market, leading to a gross profit of 22.48%.

Selling and Administrative Expenses

In Quarter 1/2016, selling and administrative expenses amounted to 46.22 million baht comprised of selling expenses amounted to 23.08 million baht and administrative expenses amounted to 23.14 million baht. Selling expenses was increase due to the increase from revenue from sales and services.

In Quarter 1/2016, the Company’s cost of financial amounted to 1.76 million baht, increasing by 0.96 million baht or 121.28%, due to the increase in short-term loan from financial institution by issuing Bill of Exchange amounted to 100 million baht and promissory note amounted to 20 million baht to support the water treatment business.

Net profit

In Quarter 1/2016, the Company’s consolidate net profit (attributable to equity holders of the Company) was 9.96 million baht, accounted for net profit margin 3.70%

Financial Position

Unit: Million baht

  March 31, 2016 December 31, 2015 % Change
Amount % Amount %
Assets 702.81 100.00% 667.40 100.00% 5.31%
Liabilites 371.46 52.85% 346.10 51.86% 7.33%
Shareholders' equity 331.35 47.15% 322.59* 48.34% 2.72%

Note:* adjustment by increasing the deficit from the change in the ownership interests in subsidiary company.

Assets

As of March 31, 2016, the Company’s total assets equaled 702.81 million baht, increasing by 35.41 million baht or 5.31% from December 31, 2015. The increased assets were mainly from current assets acquired from unbilled receivables and from prepaid expenses to the subcontractors for the construction of the water purification system of 40.70 million baht. The net remaining inventory has increased by 16.43 million baht due to more projects acquired during the construction of the community water supply project. Non-current assets amount to 158.07 million baht, which is about the same as that of 2015.

Liabilities

As of March 31, 2016, the Company’s total liabilities equaled 371.46 million baht, increasing by 25.36 million baht or 7.33% from December 31, 2015. The major source of liabilities is long-term loans from financial institution of 50 million baht in preparation for business expansion. The loan agreement is detailed in the financial statement of Quarter 1/2016, in the notes section no.20. Liabilities from financial lease have increased by 2.84 million baht from purchases of office supplies. Loan settlement in between the installment according to the financial lease of 1.14 million baht has been made.

Current liabilities have increased from the overdraft and short-term loans obtained from financial institutions of 5.44 million Baht; income tax payable has increased by 3.05 million Baht; commercial creditors have decreased by 11.43 million Baht and other creditors have decreased by 21.35 million Baht, according to the repayment schedule.

Shareholder’s equity

As of March 31, 2016, Shareholders’ equity was 332.61 million baht, increase by 9.96 million baht, due to the resulting from net profit.

Emphasis of matter

Attention to the Note 26 to the financial statements for quarter 1/2016, during, the Company found the error due to un-recognition of change in the Company’s ownership interest in subsidiary company (PD Genesis Engineering Co., Ltd). Therefore the Company made an adjustment by increasing the deficit from the change in the ownership interests in the consolidated financial statements amount to 1.54 million baht. As such, the consolidated statements of financial position as at December 31, 2015 and January 1, 2015, of the company which have been presented herewith for comparative purposes, have been restated for the effect of such adjustment.

Cash Flows

Unit: Million Baht

Cash Flows March 31, 2016 March 31, 2015
Cashflow from (used in) operating activities (68.89) (36.29)
Cashflow from (used in) investing activities (1.71) (0.81)
Cashflow from (used in) financing activities 49.85 29.82
Net increase (decrease) in cash  and cash equivalents (20.75) (7.27)
Cash and cash equivalents at the end of the period 38.48 24.33

The Company’s net cash utilized in the operating activities is 68.89 million baht, with operating profits prior to changes in the operating assets and liabilities of 20.56 million Baht. The major reason for the change is due to the completed projects’ values that have not been collected and prepaid expenses to the subcontractors for the construction of the community water supply project of 40.70 million baht. The net remaining inventory has increased by 16.40 million baht due to more projects acquired during the construction of the community water supply project. Also, commercial loans and other types of loans have decreased by 33.20 million baht.

Cash flow utilized in investment activities amounts to 1.71 million baht. 1.5 million baht was disposed of to purchase assets for service provision of the SAFETY Products, and 0.69 million Baht was used to purchase other assets. Loans to employees have increased by 0.60 million baht. Meanwhile, cash flow received from divestment of assets totals 0.93 million baht with interests received of 0.15 million baht.

Cash flow acquired from financing activities amounts to 49.85 million baht; loans from financial institutions have increased by 50 million baht, while overdraft and short-term loans have increased by 5.44 million baht. At the same time, loan repayment to financial institutions amounts to 2.96 million baht and debt settlement according to financial lease of 1.22 million baht was arranged, with an interest expense of 1.68 million baht.


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Management Discussion & Analysis (MD&A) Yearly 2015

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Overview

In 2015, Consolidated financial statement of Phol Dhanya Public Company Limited (the company) shows revenue from sales and services of 914.90 million baht, increasing by 111.89 million baht or 13.93%, compared with 803.01 million baht of previous year, The increase of revenue is sales of Occupational Safety, Health and Environment Products and revenue from services of Water Treatment Products for both public and private sectors.

However, the company’s selling and administrative expenses were increase amount to 25.03 million baht or 14.62%, so the Company’s consolidate net profit (attributable to owners of the parent) was 34.31 million baht, decreasing by 4.54 million baht or 11.69%, compared with 38.86 million baht of the previous year.

Operating performance

Unit : Million baht

  Y2015 Y2014 % YoY
Revenue from sales 847.39 797.71 6.23%
Revenue from rendering of services 67.51 5.30 1174.28%
Other Revenue 3.04 4.48 -32.15%
Total Revenue 917.94 807.49 13.68%
Cost of sales 624.78 580.99 7.54%
Cost of rendering of services 49.84 4.18 1093.15%
Total Costs 674.62 585.17 15.29%
Gross Profit 240.29 217.85 10.30%
Gross Profit (%) 26.26% 27.13% -0.86%
Total Selling & Administrative Expenses 196.31 171.28 14.62%
EBIT 47.02 51.05 -7.90%
EBIT (%) 5.12% 6.32% -1.20%
Net Profit 34.31 38.86 -11.69%
Net Profit (%) 3.74% 4.81% -1.07%
Basic earnings per share (Baht) 0.21 0.24 -11.69%
Weighted average number of ordinary shares (Million shares) 162.00 162.00  

Revenue

Unit : Million Baht

Revenue structure Quarter Year
4Q
2015
% 4Q
2014*
% %
YoY
3Q
2015
% %
QoQ
Y
2015
% Y
2014*
% %
YoY
Occupational Safety, Health and Environment Products (SAFETY) 181.11 67% 170.83 84% 6.01% 184.31 81% -1.74% 715.45 78% 675.77 84% 5.87%
Control Environment Products (CE) 28.01 10% 25.10 12% 11.59% 30.18 13% -7.18% 104.82 11% 98.11 12% 6.83%
Water Treatment Products (WATER) 61.58 23% 6.49 3% 849.54% 12.62 6% 388.00% 94.64 10% 29.13 4% 224.93%
Total revenue from sales and services 270.70 100% 202.42 100% 33.73% 227.11 100% 19.20% 914.90 100% 803.01 100% 13.93%

Note:* The Company had reclassified the type of revenue during SAFETY Products and CE Products, so the revenue structure had changed.

In 2015, the company’s sales and services were 914.90 million baht, increasing by 111.89 million baht or 13.93%, compared with 803.01 million baht of previous year.

Revenue from sales and services of Occupational Safety, Health and Environment Products (SAFETY) were 715.45 million baht, increasing by 39.68 million baht or 5.87%, due to the increase revenue of sales to government sector. In addition, the increase in the revenue was from new products and services to petrochemical industry and from new customers in new areas. However, in general production of each sectors are quite weak in relation to country’s economy, so the revenues from each sectors were quite similar to the previous year while sales in some sectors were decrease.

Revenue from sales of Control Environment Products (CE) were 104.82 million baht, increasing by 6.70 million baht or 6.83%. Main customer of CE products were in electronics industry. Eventhough, some companies had been relocated to other regions and the whole electronic industry had shrunk, revenue from CE sector was still growing as we can keep good potential existing customers.

Revenue from Water Treatment Product (WATER) were 94.64 million baht, increasing by 65.51 million baht or 224.93%, comprised of 31.69 million baht from revenue from sale of Water Treatment systems and equipment and 62.95 million baht from revenue of service, comprised of 5.59 million baht from sale of recycling waste water system and 57.36 million baht from the construction services of water recycling system for both public and private sectors.

Cost of Sales and Services

In 2015, the company’s cost of sales and services amounted to 674.62 million baht comprising of 624.78 million baht of cost of sales and 49.84 million baht of cost of services. Cost of sales and services increase according to increase of revenue from sales and services. Cost of sales and services was accounted for 73.74% of total sales and services revenue, resulting in 26.26% of gross profit margin.

Selling and Administrative Expenses

In 2015, selling and administrative expenses amounted to 196.31 million baht comprised of selling expenses amounted to 101.59 million baht and administrative expenses amounted to 94.04 million baht. Selling expenses was increase due to the increase from revenue from sales. Administrative expenses amounted to 94.04 million baht included loss on impairment of asset 5.93 million baht from the project in Mae Ka.

In 2015, the company’s cost of financial amounted to 4.25 million baht, increasing by 1.60 million baht or 60.41%, due to the increase in short-term loan from financial institution by issuing Bill of Exchange amounted to 100 million baht and promissory note amounted to 40 million baht to support the water treatment business

Net profit

The Company’s consolidate net profit (attributable to owners of the parent) was 34.31 million baht, accounted for net profit margin 3.74%

Financial Position

Unit : Million baht

Consolidated December 31, 2015 December 31, 2014 % Change
Amount % Amount %
Assets 667.40 100.00% 550.37 100.00% 21.26%
Liabilities 346.10 51.86% 229.69 41.73% 50.68%
Shareholders' equity 321.30 48.14% 320.68 58.27% 0.19%

Assets

As of December 31, 2015, the company’s total assets were 667.40 million baht, which increase by 117.03 million baht or 21.26%, mainly due to the increase in cash and cash equivalent amount to 27.52 million baht, trade account receivable was increase 22.99 million baht unbilled receivables and advance payment to sub-contractors amounted to 39.04 million baht and net inventories was increase 11.63 million baht.

Non-current assets were increase, due to the increase from property, plant and equipment from investment assets and demonstration goods in service center for safety products amount to 16.02 million baht, the building improvements amount to 2.49 million baht and acquisition of new vehicles amount to 5.76 million baht. However, there was disposal of vehicles amount to 4.35 million baht and 14.48 million baht for depreciation and amortization during the period.

Liabilities

The company’s total liabilities as of December 31, 2015, were 346.10 million baht which increase by 116.41 million baht or 50.68%, mainly due to the increase in short-term loan from financial institution amount to 98.18 million baht from bill of exchange and trade payables and other payable were increase 20.16 million baht. Long-term liabilities under finance leases was increase 4.16 million baht from acquisition of new vehicles for operation and employee benefit obligations was increase 2.53 million baht. However, long term loan from financial institutions were decrease 6 million baht.

Shareholders’ equity

As of December 31, 2015, Shareholders’ equity of the company was 321.30 million baht, unappropriated retained earnings was decrease due to the dividend paid amount to 32.40 million baht and the resulting from net profit was 34.31 million baht.

Cash Flow

Unit : Million Baht

Cash Flow December 31, 2015 December 31, 2014
Cashflow from (used in) operating activities (23.21) 32.37
Cashflow from (used in) investing activities (4.29) (2.59)
Cashflow from (used in) financing activities 55.20 (33.14)
Net increase (decrease) in cash and cash equivalents 2.39 (44.25)
Cash and cash equivalents at the end of the year 59.14 31.62

The Company had net cashflow from operating activities amounted to 4.61 million baht in which the profit from operations before change in operating assets and liabilities amounted to 71.21 million baht. Assets and liabilities from operation were changed mainly due to increase in trade and other receivables amounted to 31.91 million baht, unbilled receivable and advance payment to sub-contractors increase 39.04 million baht and increasing in inventories amounted to 15.20 million baht, and trade and other payable were increase by 6.68 million baht.

Cashflow used in investment activities amounted to 4.29 million baht which was cash for acquisition of fixed assets and amounted to 6.20 million baht and additional of leasehold right 0.45 million baht. However, cash inflow were from disposal of assets amount to 1.69 million baht and interest received amount to 0.41 million baht.

Cashflow from financing activities amounted to 55.20 million baht due to the increase in short-term loan from financial institution amounted to 98.18 million baht, repayment of long-term loan amounted to 6 million baht, interest payment amounted to 4.22 million baht and dividend paid amount to 32.40 million baht.

Management Discussion & Analysis (MD&A) Quarter 3/2015

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Overview

In Quarter 3/2015, Consolidated financial statement of Phol Dhanya Public Company Limited (the company) shows revenue from sales and services of 227.11 million baht, increasing by 10.68 million baht or 4.93%, compared with 216.43 million baht in the same quarter of previous year, due to the increase from revenue from sales of Occupational Safety, Health and Environment Products and revenue from services of Water Treatment Products were increase, compare with the same quarter of the previous year.

However, the company’s gross profit margin was decrease, due to the increase in cost of sales of imported products caused by the depreciation of baht currency. In addition, sale to government sector which have lower margin were increase. The company’s selling and administrative expenses were increase, due to the increase in loss on impairment of water treatment project, so the Company’s consolidate net profit (attributable to owners of the parent) was 2.61 million baht, decreasing by 10.14 million baht or 75.94%, compared with 12.75 million baht in the same quarter of previous year.

For the nine months period of 2015, The company’s consolidated financial statement shows revenue from sales and services of 644.20 million baht, increasing by 43.61 million baht or 7.26%, compared with 600.59 million baht in the same period of previous year. The company’s consolidate net profit (attributable to owners of the parent) was 18.10 million baht, decreasing by 12.76 million baht or 41.35%, compared with 30.85 million baht in the same period of previous year.

Operating performance

Unit : Million Baht

  Quarter 9 Months
3Q2015 3Q2014 % YoY 2Q2015 % QoQ Y2015 Y2014 % YoY
Revenue from sales 222.99 215.16 3.64% 211.39 5.49% 637.13 596.77 6.67%
Revenue from rendering of services 4.12 1.27 224.01% 1.63 152.24% 7.07 3.82 85.26%
Other Revenue 0.48 1.41 -66.12% 1.06 -54.75% 2.37 3.94 -39.84%
Total Revenue 227.59 214.84 4.47% 214.08 6.31% 646.57 604.53 6.95%
Cost of sales 166.74 157.95 5.56% 152.65 9.23% 467.41 435.02 7.45%
Cost of rendering of services 3.66 0.93 291.47% 1.15 219.46% 5.88 2.86 105.67%
Total Costs 170.39 158.89 7.24% 153.80 10.79% 473.29 437.88 8.09%
Gross Profit 56.71 57.54 -1.44% 59.23 -4.24% 170.91 162.71 5.04%
Gross Profit (%) 24.97% 26.59% -1.62% 27.80% -2.83% 26.53% 27.09% -0.56%
Total Selling & Administrative Expenses 52.19 42.32 23.30% 52.20 -0.03% 145.52 126.53 15.01%
EBIT 5.01 16.63 -69.89% 8.08 -38.06% 27.76 40.12 -30.80%
EBIT (%) 2.20% 7.63% -5.43% 3.78% -1.58% 4.29% 6.64% -2.34%
Net Profit 2.61 12.75 -79.54% 4.53 -42.38% 18.10 30.85 -41.35%
Net Profit (%) 1.15% 5.85% -4.71% 2.11% -45.80% 2.80% 5.10% -2.30%
Basic earnings per share (Baht) 0.02 0.08 -79.54% 0.03 -42.38% 0.11 0.19 -41.35%
Weighted average number of ordinary shares (Million shares) 162.00 162.00   162.00   162.00 162.00  

Revenue

Unit : Million Baht

Revenue structure Quarter 9 Months
3Q
2015
% 3Q
2014*
% %
YoY
2Q
2015
% %
QoQ
Y
2015
% Y
2014
% %
YoY
Occupational Safety, Health and Environment Products (SAFETY) 184.31 81% 177.45 82% 3.81% 173.26 81% 6.37% 534.34 83% 504.94 84% 5.82%
Control Environment Products (CE) 30.18 13% 28.79 13% 4.85% 25.63 12% 17.77% 76.81 12% 73.01 12% 5.20%
Water Treatment Products (WATER) 12.62 6% 10.10 5% 24.89% 14.13 7% -10.71% 33.06 5% 22.64 4% 46.01%
Total revenue from sales and services 227.11 100% 216.43 100% 4.93% 213.02 100% 6.61% 644.20 100% 600.59 100% 7.26%

Note:* The Company had reclassified the type of revenue during SAFETY Products and CE Products, so the revenue structure had changed.

In Quarter 3/2015, the company’s sales were 222.99 million baht, increasing by 7.83 million baht or 3.64%, compared with 215.16 million baht in the same quarter of previous year.

Revenue from sales of Occupational Safety, Health and Environment Products were 184.31 million baht, increasing by 6.77 million baht or 3.81%, due to the revenue from sales to government sector customers were increase. However, in general production of each sectors are quite weak in relation to country’s economy, so the revenues from each sectors were quite similar to the same quarter of the previous year. However, sales in some sectors were decrease.

Revenue from sales of Control Environment Products was 30.18 million baht, slight increasing by 1.40 million baht or 4.85%

Revenue from Water Treatment Product were 12.62 million baht, increasing by 2.52 million baht or 24.89%, comprised of 8.72 million baht from revenue from sale of Water Treatment systems and equipment and 3.90 million baht from revenue of service, comprised of 1.27 million baht from Waste water recycling system services and 2.63 million baht from partial income realization on the community water supply project.

Cost of Sales and Services

In Quarter 3/2015, the company’s cost of sales and services amounted to 170.39 million baht comprising of 166.74 million baht of cost of sales and 3.66 million baht of cost of services. Cost of sales and services increase according to increase of revenue from sales and services. In addition, costs of sales of imported products were increase, due to the depreciation of baht currency. Sales to government sector which have lower margin were also increase. And the community water supply projects have relatively low profit margin, so cost of sales and services was accounted for 75.03% of total sales and services revenue, resulting in 24.97% of gross profit margin.

Selling and Administrative Expenses

In Quarter 3/2015, selling and administrative expenses amounted to 52.19 million baht comprised of selling expenses amounted to 25.95 million baht and administrative expenses amounted to 26.23 million baht. Selling expenses was increase due to the increase from revenue from sales. Administrative expenses amounted to 26.23 million baht comprised of administrative expenses 22.62 million baht and loss on exchange rate 1.03 million baht and loss on impairment of asset 2.58 million baht from the reduction of the size of the water treatment project in Mae Ka.

Net profit

The Company’s consolidate net profit (attributable to owners of the parent) was 2.61 million baht, accounted for net profit margin 1.15%.

Financial Position

Unit : Million Baht

Consolidated September 30, 2015 December 31, 2014 % Change
Amount % Amount %
Assets 586.02 100.00% 550.37 100.00% 6.48%
Liabilities 280.26 47.82% 229.69 41.73% 22.02%
Shareholders' equity 305.76 52.18% 320.68 58.27% -4.65%

Assets

As of September 30, 2015, the company’s total assets were 586.02 million baht, which increase by 35.65 million baht or 6.48%, mainly due to the increase in trade account receivable amount to 12.88 million baht and other receivable decrease from the impairment of asset amount to 5.15 million baht , due to the reduction of the size of the water treatment project in Mae ka.

Non-current assets were increase, due to the increase from property, plant and equipment from investment in service center for safety products amount to 14.91 million baht, the building improvements amount to 1.8 million baht and vehicles amount to 2.9 million baht, However, non-current assets were decrease by 8.69 million baht from depreciation and amortization during the period.

Liabilities

The company’s total liabilities as of September 30, 2015, were 280.26 million baht which increase by 50.57 million baht or 22.02%, mainly due to the increase in short-term loan from financial institution amount to 67.46 million baht for loan repayment and investment in fixed assets, However, trade payables and other payable were decrease 14.93 million baht and long term loan from financial institutions were decrease 4.5 million baht.

Shareholders’ equity

As of September 30, 2015, Shareholders’ equity of the company was 305.76 million baht, unappropriated retained earnings was decrease due to the dividend paid amount to 32.40 million baht and the resulting from net profit was 18.10 million baht.

Cash Flow

Unit : Million Baht

Cash Flow September 30, 2015 September 30, 2014
Cashflow from (used in) operating activities (4.61) 5.87
Cashflow from (used in) investing activities (21.15) (2.26)
Cashflow from (used in) financing activities 28.15 (33.14)
Net increase (decrease) in cash and cash equivalents 2.39 (18.42)
Cash and cash equivalents at the end of the year 33.87 27.64

The Company had net cashflow from operating activities amounted to 4.61 million baht in which the profit from operations before change in operating assets and liabilities amounted to 45.74 million baht. Assets and liabilities from operation were changed mainly due to increase in trade and other receivables amounted to 24.20 million baht, increase in inventories amounted to 1.05 million baht, however, trade and other payable were decrease by 12.45 million baht.

Cashflow used in investment activities amounted to 21.15 million baht which was cash for acquisition of fixed assets and computer software amounted to 20.74 million baht and interest received amount to 0.29 million baht.

Cashflow from financing activities amounted to 28.15 million baht due to short-term loan from financial institution amounted to 67.49 million baht, repayment of long-term loan amounted to 4.5 million baht, interest payment amounted to 2.78 million baht and dividend paid amount to 32.40 million baht.

Management Discussion & Analysis (MD&A) Quarter 2/2015

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Overview

In Quarter 2/2015, Consolidated financial statement of Phol Dhanya Public Company Limited (the Company) shows revenue from sales and services of 213.02 million baht, increasing by 28.59 million baht or 15.50%, compared with 184.43 million baht in the same quarter of previous year, due to the revenue from sales of Occupational Safety, Health and Environment Products were increase by the petrochemical sector and government sector customers. In addition, the revenue from sales of Water Treatment Products were increase, compare with the same quarter of the previous year. However, the Company’s selling and administrative expenses were increase, so the Company’s consolidate net profit (attributable to owners of the parent) was 4.53 million baht, decreasing by 2.06 million baht or 31.23%, compared with 6.58 million baht in the same quarter of previous year.

For the six months period of 2015, The company’s consolidated financial statement shows revenue from sales and services of 417.09 million baht, increasing by 32.93 million baht or 8.57%, compared with 384.16 million baht in the same period of previous year. The Company’s consolidate net profit (attributable to owners of the parent) was 15.49 million baht, decreasing by 2.62 million baht or 14.46%, compared with 18.11 million baht in the same period of previous year.

Operating performance

Unit : Million Baht

  Quarter 6 Months
2Q2015 2Q2014 % YoY 1Q2015 % QoQ Y2015 Y2014 % YoY
Revenue from sales 211.39 183.10 15.45% 202.75 4.26% 414.14 381.62 8.52%
Revenue from rendering of services 1.63 1.33 22.68% 1.32 23.43% 2.95 2.55 16.03%
Other Revenue 1.06 0.47 124.79% 3.23 -67.28% 1.91 2.53 -24.38%
Total Revenue 214.08 184.90 15.78% 207.30 3.27% 419.01 386.69 8.36%
Cost of sales 152.65 133.88 14.03% 148.02 3.13% 300.67 277.07 8.52%
Cost of rendering of services 1.15 0.89 29.10% 1.08 6.02% 2.23 1.93 15.53%
Total Costs 153.80 134.76 14.12% 149.10 3.15% 302.90 278.99 8.57%
Gross Profit 59.23 49.67 19.24% 54.98 7.73% 114.20 105.17 8.58%
Gross Profit (%) 27.80% 26.93% 0.87% 26.94% 0.86% 27.38% 27.38% 0.00%
Total Selling & Administrative Expenses 52.20 41.43 25.99% 43.53 19.90% 93.36 84.21 10.86%
EBIT 8.08 8.71 -7.19% 14.67 -44.91% 22.75 23.49 -3.13%
EBIT (%) 3.78% 4.71% -0.93% 7.08% -3.30% 5.43% 6.07% -0.64%
Net Profit 4.53 6.58 -31.23% 10.96 -58.70% 15.49 18.11 -14.46%
Net Profit (%) 2.11% 3.56% -1.45% 5.29% -60.00% 3.70% 4.68% -0.99%
Basic earnings per share (Baht) 0.03 0.04 -31.23% 0.07 -58.70% 0.10 0.11 -14.46%
Weighted average number of ordinary shares (Million shares) 162.00 162.00   162.00   162.00 162.00  

Revenue

Unit : Million Baht

Revenue structure Quarter 6 Months
2Q
2015
% 2Q
2014*
% %
YoY
1Q
2015
% %
QoQ
Y
2015
% Y
2014
% %
YoY
Occupational Safety, Health and Environment Products (SAFETY) 173.12 81% 152.02 82% 13.87% 176.69 87% -2.02% 349.80 84% 327.40 85% 6.84%
Control Environment Products (CE) 25.63 12% 26.97 15% -4.97% 21.00 10% 22.06% 46.62 11% 44.23 12% 5.42%
Water Treatment Products (WATER) 14.28 7% 5.44 3% 162.51% 6.39 3% 123.48% 20.67 5% 12.54 3% 64.86%
Total revenue from sales and services 213.02 100% 184.43 100% 15.50% 204.07 100% 4.39% 417.09 100% 384.16 100% 8.57%

Note:* The Company had reclassified the type of revenue during SAFETY Products and CE Products, so the revenue structure had changed.

In Quarter 2/2015, the Company’s sales were 213.02 million baht, increasing by 28.59 million baht or 15.50%, compared with 184.43 million baht in the same quarter of previous year.

Revenue from sales of Occupational Safety, Health and Environment Products were 173.12 million baht, increasing by 21.09 million baht or 13.87%, due to the revenue from sales to the petrochemical sector and government sector customers were increase. However, in general production of each sectors are quite weak in relation to country’s economy, so the revenues from each sectors to decline.

Revenue from sales of Control Environment Products was 25.63 million baht, increasing by 1.34 million baht or 4.97%

Revenue from Water Treatment Product were 14.28 million baht, increasing by 8.84 million baht or 162.51%, comprised of 1.63 million baht from revenue from Waste water recycling system services and 12.65 million baht from revenue from sale of Water Treatment systems and equipment. Majority of sales are to industrial customers which increase from the same quarter of previous year.

Other revenues were 1.06 million baht from rental income and other income.

Cost of Sales and Services

In Quarter 2/2015, the Company’s cost of sales and services amounted to 153.80 million baht comprising of 152.65 million baht of cost of sales and 1.15 million baht of cost of services. Cost of sales and services increase according to increase of revenue from sales and services. Cost of sales and services was accounted for 72.20% of total sales and services revenue, resulting in 27.80% of gross profit margin.

Selling and Administrative Expenses

In Quarter 2/2015, selling and administrative expenses amounted to 52.20 million baht comprised of selling expenses amounted to 26.01 million baht and administrative expenses amounted to 26.19 million baht. Selling expenses was increase due to the increase from revenue from sales. Administrative expenses amounted to 26.19 million baht comprised of administrative expenses 21.24 million baht and loss on exchange rate 2.38 million baht and loss on impairment of asset 2.58 million baht from the reduction of the size of the water treatment project in Mae Ka.

Net profit

The Company’s consolidate net profit (attributable to owners of the parent) was 4.53 million baht, accounted for net profit margin 2.11%.

Financial Position

Unit : Million Baht

Consolidated June 30, 2015 December 31, 2014 % Change
Amount % Amount %
Assets 565.60 100.00% 550.37 100.00% 2.77%
Liabilities 249.27 44.07% 229.69 41.73% 8.52%
Shareholders' equity 316.33 55.93% 320.68 58.27% -1.36%

Assets

As of June 30, 2015, the Company’s total assets were 565.60 million baht, which increase by 15.23 million baht or 2.77%, mainly due to the increase in trade account receivable amount to 9.35 million baht and inventories increase amount to 3.82 million baht and cash and cash equivalent increase amount to 3.33 million baht. Other receivable decrease from the impairment of asset amount to 2.58 million baht due to the reduction of the size of the water treatment project in Mae ka.

Non-current assets were increase, due to the building improvements amount to 1.8 million baht and Vehicles amount to 2.9 million baht, However, non-current assets were decrease by 6.49 million baht from depreciation and amortization during the period.

Liabilities

The Company’s total liabilities as of June 30, 2015, were 249.27 million baht which increase by 19.58 million baht or 8.52%, mainly due to the increase in short-term loan from financial institution amount to 50.71 million baht, However trade payables and other payable were decrease 30.74 million baht.

Shareholders’ equity

As of June 30, 2015, Shareholders’ equity of the company was 318.95 million baht, unappropriated retained earnings was decrease due to the dividend paid amount to 19.44 million baht and the resulting from net profit was 15.49 million baht.

Cash Flow

Unit : Million Baht

Cash Flow June 30, 2015 June 30, 2014
Cashflow from (used in) operating activities (17.85) 1.55
Cashflow from (used in) investing activities (5.06) (2.15)
Cashflow from (used in) financing activities 26.26 (21.86)
Net increase (decrease) in cash and cash equivalents 3.35 (22.46)
Cash and cash equivalents at the end of the year 34.95 23.63

The Company had net cashflow from operating activities amounted to 17.85 million baht in which the profit from operations before change in operating assets and liabilities amounted to 35.29 million baht. Assets and liabilities from operation were changed mainly due to increase in trade and other receivables amounted to 10.01 million baht, increase in inventories amounted to 4.98 million baht, however, trade and other payable were decrease by 31.64 million baht.

Cashflow used in investment activities amounted to 5.06 million baht which was cash for acquisition of fixed assets and computer software amounted to 5.16 million baht and interest received amount to 0.20 million baht.

Cashflow from financing activities amounted to 26.26 million baht due to short-term loan from financial institution amounted to 50.46 million baht, repayment of long-term loan amounted to 3 million baht, interest payment amounted to 1.7 million baht and dividend paid amount to 19.44 million baht.

Management Discussion & Analysis (MD&A) Quarter 1/2015

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Overview

In Quarter 1/2015, Consolidated financial statement of Phol Dhanya Public Company Limited (the Company) shows revenue from sales and services of 204.07 million baht, increasing by 4.34 million baht or 2.17%, compared with 199.73 million baht in the same quarter of previous year, Revenue from sales increase slightly due to the overall economy, overall industry of domestic and aboard are slowdown.

The Company’s consolidate net profit (attributable to owners of the parent) was 10.96 million baht, decreasing by 0.56 million baht or 4.88%, compared with 11.52 million baht in the same quarter of previous year.

Operating performance

Unit : Million Baht

  1Q2015 1Q2014 % Change 4Q2014 % Change
Revenue from sales 202.75 198.52 2.13% 200.94 0.90%
Revenue from rendering of services 1.32 1.22 8.75% 1.48 -10.79%
Other Revenue 3.23 2.06 57.01% 0.54 497.51%
Total Revenue 207.30 201.79 2.73% 202.96 2.14%
Cost of sales 148.02 143.19 3.37% 145.97 1.40%
Cost of rendering of services 1.08 1.04 3.94% 1.32 -17.93%
Total Costs 149.10 144.23 3.38% 147.29 1.23%
Gross Profit 54.98 55.50 -0.95% 55.13 -0.28%
Gross Profit (%) 26.94% 27.79% -0.85% 27.24% -0.30%
Total Selling & Administrative Expenses 43.53 42.78 1.76% 44.74 -2.70%
EBIT 14.67 14.78 -0.74% 10.93 34.26%
EBIT (%) 7.08% 7.32% -0.25% 5.38% 1.69%
Net Profit 10.96 11.52 -4.88% 8.00 36.99%
Net Profit (%) 5.29% 5.71% -0.42% 3.94% 34.12%
Basic earnings per share (Baht) 0.07 0.07 -4.88% 0.05 36.99%
Weighted average number of ordinary shares (Million shares) 162.00 162.00   162.00  

Revenue

Unit : Million Baht

Revenue structure 1Q2015 % 1Q2014* % % Change
Occupational Safety, Health and Environment Products (SAFETY) 176.69 87% 175.38 88% 0.75%
Control Environment Products (CE) 21.00 10% 17.26 9% 21.65%
Water Treatment Products (WATER) 6.39 3% 7.10 4% -9.97%
Total revenue from sales and services 204.07 100% 199.73 100% 2.17%

Note:* The Company had reclassified the type of revenue during SAFETY Products and CE Products, so the revenue structure had changed.

The Company’s sales were 202.75 million baht, increasing by 4.23 million baht or 2.13%, compared with 198.52 million baht in the same quarter of previous year.

Revenue from sales of Occupational Safety, Health and Environment Products were 176.69 million baht, revenue increased slightly due to the manufacturing of most industry sector have been stabilizing. In quarter 1/2015, revenue from sales of petrochemical sector and government sector are increased, while, revenue from other sectors such as automotive sector and food sector have the same balance, compare to the same quarter of the previous year.

Revenue from sales of Control Environment Products was 21 million baht, increasing by 3.74 million baht or 21.65%, the major customers in electronic sector were increase in quarter 1/2015.

Revenue from Water Treatment Product were 6.39 million baht, comprised of 1.32 million baht from revenue from Waste water recycling system services and 5.07 million baht from revenue from sale of Water Treatment systems and equipment, which mainly sold to industrial customers.

Other revenues were 3.23 million baht, comprised of 2.40 million baht from gain on exchange rate and 0.83 million baht from rental income and other income.

Cost of Sales and Services

In Quarter 1/2015, the Company’s cost of sales and services amounted to 149.10 million baht comprising of 148.02 million baht of cost of sales and 1.08 million baht of cost of services. Cost of sales and services was accounted for 73.06% of total sales and services revenue, resulting in 26.94% of gross profit margin. The decrease of gross profit margin was due to an increase of sales of low gross profit margin products.

Selling and Administrative Expenses

In Quarter 1/2015, selling and administrative expenses amounted to 43.53 million baht comprised of selling expenses amounted to 21.73 million baht and administrative expenses amounted to 21.80 million baht. Selling and administrative expenses were increase mainly due to the increase of personnel expenses.

Net profit

The Company’s consolidate net profit (attributable to owners of the parent) was 10.96 million baht, accounted for net profit margin 5.29%

Financial Position

Unit : Million Baht

Consolidated March 31, 2015 December 31, 2014 % Change
Amount % Amount %
Assets 565.56 100.00% 550.37 100.00% 2.76%
Liabilities 234.20 41.41% 229.69 41.73% 1.96%
Shareholders' equity 331.37 58.59% 320.68 58.27% 3.33%

Assets

As of March 31, 2015, the Company’s total assets were 565.56 million baht, which increase by 15.19 million baht or 2.76%, mainly due to the increase in trade account receivable amount to 11.25 million baht and inventories increase amount to 13.38 million baht. However, cash and cash equivalent were decrease by 7.27 million baht. And non-current assets were decrease, due to the deduction of depreciation amounted to 3.22 million baht.

Liabilities

The Company’s total liabilities as of March 31, 2015, were 234.2 million baht which increase by 4.51 million baht or 1.96%, mainly due to the increase in short-term loan (Trust receipt) from financial institution amount to 32 million baht and current income tax payable was increase 3.3 million baht. However trade payables and other payable were decrease 30.07 million baht.

Shareholders' equity

As of March 31, 2015, Shareholders’ equity was 331.37 million baht, increase by 10.69 million baht from the previous year, due to the resulting from net profit.

Cash Flow

Unit : Million Baht

Cash Flow March 31, 2015 March 31, 2014
Cashflow from (used in) operating activities (36.29) (9.67)
Cashflow from (used in) investing activities (0.81) (1.98)
Cashflow from (used in) financing activities 29.82 (9.60)
Net increase (decrease) in cash and cash equivalents (7.27) (21.25)
Cash and cash equivalents at the end of the year 24.33 24.84

The Company had net cashflow from operating activities amounted to 36.29 million baht in which the profit from operations before change in operating assets and liabilities amounted to 17.61 million baht. Assets and liabilities from operation were changed mainly due to increase in trade and other receivables amounted to 11.07 million baht, increase in inventories amounted to 13.56 million baht, however, trade and other payable were decrease by 29.06 million baht.

Cashflow used in investment activities amounted to 0.81 million baht which was cash for acquisition of fixed assets and computer software

Cashflow used in financing activities amounted to 29.82 million baht due to short-term loan from financial institution amounted to 32.15 million baht, repayment of long-term loan amounted to 1.5 million baht and interest payment amounted to 0.8 million baht.

The Company’s cash and cash equivalents as of March 31, 2015 was 24.33 million baht decrease by 0.51 million baht compared with March 31, 2014.


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Management Discussion & Analysis (MD&A) Yearly 2014

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Operating performance

unit : million baht

  Y2014 Y2013 % Change
Revenue from sales 797.71 769.09 3.72%
Revenue from rendering of services 5.30 4.79 10.63%
Other Revenue 4.48 2.79 60.32%
Total Revenue 807.49 776.67 3.97%
Cost of sales 580.99 536.36 8.32%
Cost of rendering of services 4.18 3.71 12.47%
Total Costs 585.17 540.08 8.35%
Gross Profit 217.85 233.80 -6.82%
Gross Profit (%) 27.13% 30.21% -3.08%
Total Selling & Administrative Expenses 171.28 168.91 1.40%
EBIT 51.05 67.69 -24.58%
EBIT (%) 6.32% 8.72% -2.39%
Net Profit 38.86 50.75 -23.43%
Net Profit (%) 4.81% 6.53% -1.72%
Basic earnings per share (Baht) 0.24 0.31 -23.43%
Weighted average number of ordinary shares (Million shares) 162.00 162.00  

Revenue

unit : million baht

Revenue structure Y2014 % Y2013 % % Change
Occupational safety, health and environment products 668.82 83% 638.20 82% 4.80%
Control environment products 105.11 13% 105.71 14% -0.57%
Water treatment products 29.08 4% 29.97 4% -2.98%
Total revenue from sales and services 803.01 100% 773.88 100% 3.76%

In 2014, the Company’s consolidated revenue from sales and services were 803.01 million baht, increase by 29.13 million baht (3.76% YoY), compared with 773.88 million baht in the previous year.

The Company’s sales were 797.71 million baht, increase by 28.62 million baht (3.72% YoY) compared with 769.09 million baht in the previous year, The revenue from sales of Occupational Safety, Health and Environment Products increase from sales of Petrochemical segment and Government and State enterprise segment. However, some major customers such as Automotive segment and Food segment were decrease from economic slowdown.

Revenue from sales of Control Environment Products mainly came from Electronic segment, which had similar amount compare to the previous year.

Revenue from Water Treatment Product were 29.08 million baht, comprised of 5.30 million baht from revenue from services and 23.78 million baht from revenue from sale from Water Treatment systems and equipment.

Other revenues were 4.48 million baht, comprised of 2.06 million baht from gain on exchange rate and 2.42 million baht from rental income and other income.

Cost of Sales and Services

In 2014, the Company’s cost of sales and services amounted to 583.85 million baht comprising of 579.67 million baht of cost of sales and 4.18 million baht of cost of services. Cost of sales and services was accounted for 72.71% of total sales and services revenue, resulting in 27.29% of gross profit margin, which decrease from 30.21% in the previous year. The decrease of gross profit margin was due to an increase of sales of low gross profit margin products to both government sector and state enterprises customers, which mainly sale offer in the auction.

Selling and Administrative Expenses

In 2014, selling and administrative expenses amounted to 171.28 million baht comprised of selling expenses amounted to 88.09 million baht and administrative expenses amounted to 83.19 million baht. The increase of selling and administrative expenses mainly due to the increase in selling and administrative of subsidiaries, which were personnel expenses.

Net profit

The Company’s net profit after minority interest was 38.86 million baht accounted for net profit margin 4.81%, decrease by 11.89 million baht (23.43% YoY) compared with 50.75 million baht accounted for net profit margin 6.53% in the previous year, due to an increase of sales of low gross profit margin products.

Financial Position

unit : million baht

Consolidated December 31, 2014 December 31, 2013 % Change
million baht % million baht %
Assets 550.37 100.00% 511.45 100.00% 7.61%
Liabilities 229.69 41.73% 202.75 39.64% 13.28%
Shareholders' equity 320.68 58.27% 308.70 60.36% 3.88%

Assets

As of December 31, 2014, the Company’s total assets were 550.37 million baht, which increase by 39.98 million baht (7.82% YoY) from the previous year, mainly due to the increase in trade account receivable amount to 24.58 million baht and other receivable increase from prepaid expense amount to 7.98 million baht. Inventories increase amount to 27.89 million baht, due to support sales in next quarter.

Liabilities

The Company’s total liabilities as of December 31, 2014 were 229.69 million baht which increase by 26.94 million baht (5.10% YoY) from the previous year, mainly due to the increase in trade payables 46.74 million baht from increase stock for support sales next quarter. Other payable was decrease 9.06 million baht and bank overdrafts and short-term loan from financial institution was decrease 9.58 million baht.

Shareholders' equity

As of December 31, 2014, Shareholders’ equity was 320.68 million baht, increase by 11.98 million baht (3.88% YoY) from the previous year, due to the resulting from net profit amount to 38.86 million baht and increase in registered capital 27 million shares for stock dividend and paid cash dividend amount to 26.45 million baht.

Management Discussion & Analysis (MD&A) Quarter 3/2014

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Operating performance

unit : million baht

  3Q2014 3Q2013 % Change 2Q2014 % Change 9 M
/2014
9 M
/2013
% Change
Revenue from sales
215.16
186.37
15.45%
183.10
17.51%
596.77
574.16
3.94%
Revenue from rendering of services
1.27
1.25
1.61%
1.33
-4.49%
3.82
3.52
8.47%
Other Revenue
1.41
1.30
8.86%
0.47
200.18%
3.94
2.40
63.97%
Total Revenue
217.84
188.91
15.31%
184.90
17.81%
604.53
580.08
4.22%
Cost of sales
157.95
128.04
23.36%
133.88
17.98%
435.02
401.09
8.46%
Cost of rendering of services
0.93
-0.02
-4795.88%
0.89
5.36%
2.86
2.24
27.79%
Total Costs
158.89
128.02
24.11%
134.76
17.90%
437.88
403.32
8.57%
Gross Profit
57.54
59.60
-3.45%
49.67
15.85%
162.71
174.35
-6.67%
Gross Profit (%)
26.59%
31.77%
-5.18%
26.93%
-0.34%
27.09%
30.18%
-3.09%
Total Selling & Administrative Expenses
42.32
42.76
-1.02%
41.43
2.16%
126.53
119.74
5.67%
EBIT
16.63
18.13
-8.29%
8.71
90.96%
40.12
57.01
-29.63%
EBIT (%)
7.63%
9.60%
-1.96%
4.71%
2.92%
6.64%
9.83%
-3.19%
Net Profit
12.75
13.10
-2.72%
6.58
93.64%
30.85
42.95
-28.16%
Net Profit (%)
5.85%
6.94%
-1.08%
3.56%
64.36%
5.10%
7.40%
-2.30%
Basic earnings per share (Baht)*
0.08
0.08
-2.72%
0.04
93.64%
0.19
0.27
-28.16%
Weighted average number of ordinary shares (Million shares) *
162.00
162.00
162.00
162.00
162.00

Revenue

unit : million baht

Revenue structure 3Q2014 % 3Q2013 % % Change 9 M/2014 % 9 M/2013 % Change
Occupational safety, health and environment products
181.58
84%
159.62
85%
13.76%
495.08
82%
473.83
4.49%
Control environment products
24.92
12%
23.25
12%
7.17%
83.14
14%
82.34
0.97%
Water treatment products
9.93
5%
4.75
3%
109.21%
22.37
4%
21.51
4.02%
Total revenue from sales and services
216.43
100%
187.62
100%
15.36%
600.59
100%
577.67
3.97%

In quarter 3/2014, the Company's consolidated revenue from sales and services were 216.43 million baht, increase by 28.82 million baht (15.36% YoY), compared with 187.62 million baht in the same quarter of previous year.

The Company's sales were 215.16 million baht, increase by 28.79 million baht (15.45% YoY) compared with 186.37 million baht in the same quarter of previous year, Major revenue from sales of Occupational safety, health and environment products, especially, the increase from revenue from sales of the personal protective equipment to Petrochemical segment and Construction segment customers, which increase according to industrial expansion, compare with the same quarter of previous year. In addition, the company has added new products to sell to petrochemical industry customers.

In addition, Sales from government and state enterprises customer were increase. However, revenue from other major industrial customers was decrease, such as, automotive segment, food segment and electronic segment, according to the country economy slowdown.

Cost of Sales and Services

In quarter 3/2014, the Company's cost of sales and services amounted to 158.89 million baht comprising of 157.95 million baht of cost of sales and 0.93 million baht of cost of services. Cost of sales and services was accounted for 73.41% of total sales and services revenue, resulting in 26.59% of gross profit margin, which decrease from 31.77% in the same quarter of previous year. The decrease of gross profit margin was due to an increase of sales of low gross profit margin products to both government sector and state enterprises customers. In addition, in quarter 3/2014, cost of services had negative balance, due to the reversal of impairment assets transaction.

Selling and Administrative Expenses

In quarter 3/2014, selling and administrative expenses amounted to 42.32 million baht comprised of selling expenses amounted to 22.49 million baht and administrative expenses amounted to 19.84 million baht. Mainly selling and administrative expenses were personnel expenses, which had similar amount, compared to the same quarter of the previous year.

Net profit

The Company's net profit after minority interest was 12.75 million baht accounted for net profit margin 5.85%, decrease by 0.35 million baht (2.72% YoY) compared with 13.10 million baht accounted for net profit margin 6.94% in the same quarter of previous year, due to an increase of sales of low gross profit margin products.

Financial Position

Consolidated September 30, 2014 December 31, 2013 % Change
million baht % million baht %
Assets
505.28
100.00%
511.45
100.00%
-1.21%
Liabilities
192.40
38.08%
202.75
39.64%
-5.10%
Shareholders' equity
312.88
61.92%
308.70
60.36%
1.35%

Assets

As of September 30, 2014, the Company's total assets were 505.28 million baht, which decrease by 6.17 million baht (1.21% YoY) from the previous year, mainly due to the decrease in cash and cash equivalent by 18.48 million baht and inventories decrease amount to 19.06 million baht.

Trade and other receivable increase 35.27 million baht, mainly due to increase in trade accounts receivable, and other receivable which increase from prepaid expenses and refundable import duty.

Liabilities

The Company's total liabilities as of September 30, 2014 were 192.40 million baht which decrease by 5.10% from the previous year, mainly due to the decrease in trade and other payable were increase 5.81 million baht and long term loan from financial institutions was decrease 4.5 million baht.

Shareholders' equity

As of September 30, 2014, Shareholders' equity was 312.88 million baht, increase by 4.18 million baht (1.35% YoY) from the previous year.

Management Discussion & Analysis (MD&A) Quarter 2/2014

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Operating performance

unit : million baht

  2Q2014 2Q2013 % Change 1Q2014 % Change 6 M
/2014
6 M
/2013
% Change
Revenue from sales
183.10
195.19
-6.19%
198.52
-7.77%
381.62
387.79
-1.59%
Revenue from rendering of services
1.33
1.25
6.18%
1.22
9.42%
2.55
2.27
12.25%
Other Revenue
0.47
0.53
-10.46%
201.79
-77.14%
2.53
1.15
120.32%
Total Revenue
184.90
196.97
-6.13%
201.79
-8.37%
386.69
391.21
-1.15%
Cost of sales
133.88
135.25
-1.02%
143.19
-6.51%
277.07
273.05
1.47%
Cost of rendering of services
0.89
1.31
-32.46%
1.04
-14.65%
1.93
2.26
-14.71%
Total Costs
134.76
136.56
-1.32%
144.23
-6.56%
278.99
275.31
1.34%
Gross Profit
49.67
59.88
-17.06%
55.50
-10.51%
105.17
114.75
-8.35%
Gross Profit (%)
26.93%
30.48%
-3.55%
27.79%
-0.86%
27.38%
29.42%
-2.04%
Total Selling & Administrative Expenses
41.43
42.22
-1.87%
42.78
-3.16%
84.21
77.02
9.33%
EBIT
8.71
18.19
-52.11%
14.78
-41.08%
23.49
38.88
-39.58%
EBIT (%)
4.71%
9.23%
-4.52%
7.32%
-2.62%
6.07%
9.94%
-3.86%
Net Profit
6.58
14.10
-53.31%
11.52
-42.87%
18.11
29.84
-39.33%
Net Profit (%)
3.56%
7.16%
-3.60%
5.71%
-37.65%
4.68%
7.63%
-2.95%
Basic earnings per share (Baht)*
0.04
0.09
-53.31%
0.07
-42.87%
0.11
0.18
-39.33%
Weighted average number of ordinary shares (Million shares) *
162.00
162.00
162.00
162.00
162.00

*Restated

Revenue

unit : million baht

Revenue structure 2Q2014 2Q2013 % Change 6 M/2014 6 M/2013 % Change
Occupational safety, health and environment products
150.15
160.69
-6.56%
313.50
314.21
-0.22%
Control environment products
28.94
28.13
2.89%
58.22
59.09
-1.47%
Water treatment products
5.34
7.63
-29.93%
12.44
16.76
-25.77%
Total revenue from sales and services
184.43
196.44
-6.12%
384.16
390.06
-1.51%

In quarter 2/2014, the Company's consolidated revenue from sales and services were 184.43 million baht, decrease by 12.01 million baht (6.12% YoY), compared with 196.44 million baht in the same quarter of previous year.

The Company's sales were 183.10 million baht, decreased by 12.09 million baht (6.19% YoY) compared with 195.19 million baht in the same quarter of previous year, due to the decrease sales of occupational safety, health and environment products, consistent with the decline of industrial sectors especially automobile industry. In addition, revenues from sales and services of water treatment products do not meet the target.

Cost of Sales and Services

In quarter 2/2014, the Company's cost of sales and services amounted to 134.76 million baht comprising of 133.88 million baht of cost of sales and 0.89 million baht of cost of services. Cost of goods sold decrease because of volume sales decrease. Cost of services decrease because of more efficiency in cost management, compare to the same quarter of the previous year

In quarter 2/2014, Cost of sales and services was accounted for 73.07% of total sales and services revenue, resulting in 26.93% of gross profit margin, which decrease from 30.48% in the same quarter of previous year. The decrease of gross profit margin was due to an increase of sales of low gross profit margin products to both government and private sectors.

Selling and Administrative Expenses

In quarter 2/2014, selling and administrative expenses amounted to 41.43 million baht comprised of selling expenses amounted to 22 million baht and administrative expenses amounted to 19.43 million baht. The increase of selling expenses was mainly due to increase in selling expenses from new subsidiaries. Administrative expenses are about the same amount as the same quarter of the previous year.

Net profit

The Company's net profit after minority interest was 6.58 million baht accounted for net profit margin 3.56%, decrease by 7.52 million baht (53.31% YoY) compared with 14.10 million baht accounted for net profit margin 7.16% in the same quarter of previous year.

Financial Position

Consolidated June 30, 2014 December 31, 2013 % Change
million baht % million baht %
Assets
515.97
100.00%
511.45
100.00%
0.88%
Liabilities
202.54
39.25%
202.75
39.64%
-0.11%
Shareholders' equity
313.43
60.75%
308.70
60.36%
1.53%

Assets

As of June 30, 2014, the Company's total assets were 515.97 million baht, which increase by 4.51 million baht (0.88% YoY) from the previous year, mainly due to the increase in trade and other receivables 20 million baht and the increase in inventories 10.06 million baht, while cash and cash equivalent were decrease by 22.49 million baht.

Liabilities

The Company's total liabilities as of June 30, 2014 were 202.54 million baht which decrease by 0.11% from the previous year, mainly due to the decrease in bank overdraft and loan from financial institutions 7.92 million baht while trade and other payable were increase 6.41 million baht.

Shareholders' equity

As of June 30, 2014, Shareholders' equity was 313.43 million baht, increase by 4.73 million baht (1.53% YoY) from the previous year, due to the resulting from net profit of the period.

The company's registered capital had been increase 27 million shares of 1 baht each in order to pay for stock dividend to shareholders.

Management Discussion & Analysis (MD&A) Quarter 1/2014

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Operating performance

unit : million baht

  1Q2014 1Q2013 % Change 4Q2013 % Change
Revenue from sales
198.52
192.60
3.07%
194.93
1.84%
Revenue from rendering of services
1.22
1.02
19.73%
1.27
-4.35%
Other Revenue
2.06
3.55
-41.96%
0.39
424.92%
Total Revenue
201.79
197.16
2.35%
196.60
2.64%
Cost of sales
143.19
137.80
3.91%
135.28
5.85%
Cost of rendering of services
1.04
0.95
9.94%
1.47
-29.55%
Total Costs
144.23
138.74
3.95%
136.75
5.47%
Gross Profit
55.50
54.87
1.15%
59.45
-6.64%
Gross Profit (%)
27.79%
28.34%
-0.55%
30.30%
-2.51%
Total Selling & Administrative Expenses
42.78
37.72
13.40%
47.74
-10.40%
EBIT
14.78
20.69
-28.56%
12.10
22.16%
EBIT (%)
7.32%
10.49%
-3.17%
6.15%
1.17%
Net Profit
11.52
15.74
-26.80%
7.80
47.76%
Net Profit (%)
5.71%
7.99%
-2.27%
3.97%
43.96%
EPS
0.09
0.12
-26.80%
0.06
47.76%

Revenue

unit : million baht

Revenue structure 1Q2014 % 1Q2013 % % Change
Occupational safety, health and environment products
163.44
82%
153.82
79%
6.26%
Control environment products
29.43
15%
30.66
16%
-4.04%
Water treatment products
6.86
3%
9.13
5%
-24.85%
Total revenue from sales and services
199.73
100%
193.61
100%
3.16%

In quarter 1/2014, the Company's consolidated revenue from sales and services were 199.73 million baht, increase by 6.12 million baht (3.16% YoY), compared with 193.61 million baht in the same quarter of previous year.

The Company's sales were 198.52 million baht, increased by 5.92 million baht (3.07% YoY) compared with 192.60 million baht in the same quarter of previous year, due to the increase sales of occupational safety, health and environment products. There are orders increase from government sector customers and petrochemical sector customers. However, the order from major industrial customers had slowdown according to the country economy slowdown.

Cost of Sales and Services

In quarter 1/2014, the Company's cost of sales and services amounted to 144.23 million baht comprising of 143.19 million baht of cost of sales and 1.04 million baht of cost of services. The cost of sales and services increase by 5.49 million baht (3.95%YoY) compared with the same quarter of previous year.

In quarter 1/2014, Cost of sales and services was accounted for 72.21% of total sales and services revenue resulting in 27.79% of gross profit margin, which decrease from 28.34% in the same quarter of previous year. The decrease of gross profit margin was due to an increase of sales of low gross profit margin products.

Selling and Administrative Expenses

In quarter 1/2014, selling and administrative expenses amounted to 42.78 million baht comprised of selling expenses amounted to 20.90 million baht and administrative expenses amounted to 21.88 million baht. The increase of selling and administrative expenses was mainly due to increase in staff benefits and expenses from new subsidiaries.

Net profit

The Company's net profit after minority interest was 11.52 million baht accounted for net profit margin 5.71%, decrease by 4.22 million baht (26.80% YoY) compared with 15.74 million baht accounted for net profit margin 7.99% in the same quarter of previous year.

Financial Position

Consolidated March 31, 2014 December 31, 2013 % Change
million baht % million baht %
Assets
506.06
100.00%
511.45
100.00%
-1.05%
Liabilities
185.37
36.63%
202.75
39.64%
-8.58%
Shareholders' equity
320.69
63.37%
308.70
60.36%
3.89%

Assets

As of March 31, 2014, the Company's total assets were 506.06 million baht, which decrease by 5.39 million baht (1.05% YoY) from the previous year, mainly due to decrease in inventories 4.9 million baht and cash and cash equivalent 21.28 million baht while trade and other receivable were increase by 21.16 million baht.

Liabilities

The Company's total liabilities as of March 31, 2014 were 185.37 million baht which decrease by 17.38 million baht from the previous year, mainly due to decrease in bank overdraft and short term loan from financial institutions 7.96 million baht and trade and other payable 11.04 million baht.

Shareholders' equity

As of March 31, 2014, Shareholders' equity was 320.69 million baht, increase by 11.99 million baht (3.89% YoY) from the previous year, due to the resulting from net profit of the period.

Management Discussion & Analysis (MD&A) Yearly 2013

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Operating performance

In 2013, the Company's consolidated revenue from sales and services were 773.88 million baht, decreased by 16.15 million baht (2.04% YoY) due to the fact that a decrease of revenue of sales in government sector. However company's net profit after minority interest amounted to 50.75 million baht, increase by 5.31 million baht (11.70% YoY) driven by an increase in sales of high margin products. Furthermore, there is a reduction in services cost in the subsidiary company, compared with the previous year.

Revenue

The Company's sales were 769.09 million baht, decreased by 17.14 million baht (2.17% YoY) compared with 786.23 million baht in 2012. The decrease in sales was due to decrease sales of control environment products in government sector, electronics sector and foods sector. However, the sales of occupational safety, health and environment products to petrochemical sector and automotive sector were increased according to industrial expansion.

Revenues from services were 4.79 million baht, increased by 0.99 million baht (26.01%YoY) driven by increased in efficiency of water treatment services project.

Revenue Structure 2013 2012 % Change
Million Baht % Million Baht %
Occupational Safety, Health and Environment Products
617.29
79.77%
597.17
75.59%
3.37%
Control Environment Products
123.46
15.95%
152.94
19.36%
-19.28%
Water Treatment Products
33.12
4.28%
39.91
5.05%
-17.01%
Total Revenue from sales and services
773.88
100%
790.03
100%
-2.04%

Note * reclassified of products.

Other revenues were 2.79 million baht, comprised of 0.66 million baht from reversal allowance for loss on impairment of assets and 2.13 million baht from other income.

Cost of Sales and Services

In 2013, the Company's cost of sales and services amounted to 540.08 million baht comprising of 536.36 million baht of cost of sales and 3.71 million baht of cost of services. The cost of sales and services decreased by 31.23 million baht (5.47%YoY). The decrease in cost of sales was associated with lower sales revenues, the cost of services was decreased due to decrease of services cost of subsidiary company.

Cost of sales and services in 2013 was accounted for 69.79% of total sales and services revenue resulting in 30.21% of gross profit margin while the cost of sales and services in 2012 was accounted for 72.31% of total sales and services revenue resulting in 27.69% of gross profit margin. The increase of gross profit margin was due to an increase of high gross profit margin products, compared with 2012. Furthermore, the gross profit margin of services business was improved from higher efficiency and no loss in subsidiary company's project as increase in 2012.

Selling and Administrative Expenses

In 2013, Selling and administrative expenses amounted to 168.91 million baht comprised of selling expenses amounted to 79.98 million baht, administrative expenses amounted to 85.58 million baht, bad debt and doubtful account amounted to 1.25 million baht and loss from exchange rate amounted to 2.10 million baht. The increase of selling and administrative expenses was mainly due to increase in expenses from 2 newly established subsidiaries and the loss from exchange rate which was gain in the previous year.

The Company's net profit after minority interest was 50.75 million baht accounted for net profit margin 6.53%, increased by 5.31 million baht from last year (11.70% YoY).

Profitability Ratio

Consolidated 2013 2012*
Gross Profit Margin
30.21%
27.69%
Operating Profit Margin
10.25%
9.72%
Net Profit Margin
6.53%
5.72%
Return on Equity
16.77%
15.87%

Note *Restated

In 2013, the company's return on equity was 16.77%, increase from 15.87% in 2012, due to the fact that the increase portion of high gross profit margin products, while percentage of increase in selling and administrative expenses were lower than percentage of gross profit margin. As the result, the company's operating profit margin and net profit margin were increase.

Financial Position

Consolidated 2013 2012* % Change
Million Baht % Million Baht %
Assets
511.45
100.00%
507.96
100.00%
0.69%
Liabilities
202.75
39.64%
215.99
42.52%
-6.13%
Shareholder’s equity
308.70
60.36%
291.97
57.48%
5.73%

Note *Restated

Assets

The Company's total assets as of December 31, 2013 were 511.45 million baht comprised of current assets amounted to 358.62 million baht and non-current assets amounted to 152.83 million baht. Total assets increased by 6.82 million baht (1.34% YoY) from total assets of 507.96 million baht in 2012. The increasing was mainly due to increase in cash and cash equivalent.

Trade receivables

In 2013, the company's trade receivables were amounted to 108.65 million baht which decrease from 2012, due to the decrease in sale volume. Furthermore, the company's credit term policy is at least 30 days, then, the average credit term was 51.91 days which was closely to 2012 at 52.85 days. The company will consider payment term from past performance, sales order and historical payment. Furthermore, the company will recognize allowance for doubtful account by estimated losses that may incurred in collection of receivables which was generally based on collection history, current financial status of account receivables. Accordingly, the company will analyze each account receivables which aging over 180 days past due and inactive movement. Thus, the company set up allowance for doubtful account at rate 100% of total remaining receivables. In 2013, the company decrease allowance for doubtful account by 0.11 million baht, decrease from 0.17 million baht in 2012.

Inventories-net

In 2013, the company's inventories-net were 189.30 million baht, decrease by 6.32 million baht from 2012 or 3.23% (YoY). According to the policy for set up allowance for diminution in value of inventories for obsolete or impaired goods, the company will consider from aging and condition of goods, quick obsolete goods aging over 1 year will be set up allowance for diminution in value of inventories of 50% of inventories value, quick obsolete goods aging over 2 year or impaired goods will be set up allowance for diminution in value of inventories of 100%. In 2013, the Company recorded an allowance for diminution in value of inventories amounted to 3.95 billion baht.

Property, plant and equipment - net

In 2013, Property, plant and equipment - net was 147.85 million baht, decrease by 4.95 million baht from 2012, mainly due to the deduction of depreciation amounted to 11.94 million baht. However, the assets were increase mainly to furniture, office equipment, building improvement and utilities for branch office and information systems improvement of the company, amounted to 5.68 million baht.

Liabilities

The Company's total liabilities as of December 31, 2013 were 206.05 million baht comprised of current liabilities amounted to 178.73 million baht and non-current liabilities amounted to 27.32 million baht. Total liabilities decreased by 9.94 million baht (4.60%YoY) from total liabilities of 215.99 million baht in 2012. The decreased was mainly due to decrease in long-term loan from financial institutions.

The Company had contingent liabilities with financial institution as follows;

Unit : Million Baht

Item Credit Line Draw down Remaining
Letters of credits and trust receipt
188.00
36.01
151.99
Promissory Notes
65.00
10.00
55.00
Letters of guarantee
30.70
2.11
28.59
Bank overdraft
56.50
6.64
49.86
Forward exchange contracts: Baht
220.00
15.33
204.67
Forward exchange contracts : USDOLLAR
1.15
0.58
0.57

Shareholders' equity

Shareholders' equity as of December 31, 2013 was 310.52 million baht, increase by 15.73 million baht (5.33% YoY) from 2012, which had shareholders' equity of 294.79 million baht. The increase was the resulting from net profit for the year 2013.

In 2013, the Company had debt-to-equity ratio of 0.65 times, decreased from 0.75 times in 2012 due to the shareholders' equity was increase by 16.73 million baht from retained earnings while liabilities were decreased by 13.24 million baht.

Cash Flow

Unit : Million Baht

Cash Flow Dec 31, 2013 Dec 31, 2012*
Cashflow from (used in) operating activities
60.45
56.55
Cashflow from (used in) investing activities
(4.60)
(5.43)
Cashflow from (used in) financing activities
(30.23)
(46.22)
Net increase (decrease) in cash and cash equivalents
25.62
4.91
Cash and cash equivalents at the end of the year
49.61
23.90

Note *Restated

The Company had net cashflow from operating activities amounted to 60.45 million baht in which the profit from operations before change in operating assets and liabilities amounted to 84.37 million baht. Assets and liabilities from operation were changed mainly due to decrease in trade and other receivables amounted to 2.22 million baht, decrease in inventories amounted to 4.89 million baht, decrease in trade and other payable amounted to 9.63 million baht, increase in employee benefits paid amounted to 8.10 million baht and tax payment amounted to 14.25 million baht.

Cashflow used in investment activities amounted to 4.6 million baht which was cash for acquisition of fixed assets and computer software.

Cashflow used in financing activities amounted to 30.23 million baht due to repayment of long-term loan and repayment of liabilities under long-term lease agreement amounted to 23.15 million baht, interest payment amounted to 3.25 million baht and dividend payment amounted to 35.08 million baht. However, the Company had cash received from bank overdraft and short-term loan from financial institution amounted to 29.19 million baht.

The Company's cash and cash equivalents as of December 31, 2013 was 49.26 million baht increase by 25.72 million baht compared with December 31, 2012.

Liquidity ratio

  2013 2012*
Current Ratio (times)
2.04
1.98
Average collection period (days)
51.91
52.85
Average payment period (days)
59.96
57.42
Average inventories on hand (days)
130.07
119.94
Cash Conversion Cycle (days)
122.02
115.37

Note *Restated

In 2013, the Company's current ratios were 2.04 times, increased by 0.06 times from 2012, due to an increase in current assets of cash and cash equivalents while the current liabilities were at the same level as in 2012

The Company's average collection period was 51.91 days which was closely to 2012 at 52.85 days. The Company's average inventories on hand was 130.07 days, increased by 10.13 days from 2012 due to the company increased purchasing volume of products. And the Company's average payment period was at 59.96 days increased by 2.54 days from 2012, most of purchasing orders were imported goods which allowed longer credit term compared with domestic order.

Management Discussion & Analysis (MD&A) Yearly 2012

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Overview of operating performance for the year 2012

In 2012, the Company's consolidated net profit after minority interest totaled 44.73 million baht, increased by 15.87 million baht (54.99% YoY) driven by an increase of revenue from sales of safety, occupational health and environmental products and services. The increase was in line with an expansion of industrial sectors. Due to the Thai Baht appreciation, the Company which has mainly imported goods from foreign countries, record gain on foreign exchange compared with loss in the previous year.

Selling and administration expenses was decreased due mainly to the decline of the subsidiary's selling and administration expenses, lower of bad debt and doubtful debt compared with the previous year as well as the decline of finance cost following the decrease of bank overdrafts and borrowings interest rate. Furthermore, the reduction of tax rate resulted in lower corporate tax expense.

Operating performance


  • Revenue
    In 2012, the Company's sales and services revenues were 790.03 million baht, increased by 70.89 million baht (9.86% YoY) compared with 719.14 million baht in 2011.

    The core revenue was mainly contributed by occupational safety, health and environment products in amount of 620.90 million baht or accounted for 78.59% of total revenue. It increased by 54.82 million baht (9.68% YoY) following an expansion of industrial sectors especially automotive sector, petrochemical sector, and construction sector which are key customers. The key products for these customer groups are personal protective equipments category. Moreover, the top sales products were safety gloves, safety footwear, and safety goggles.

    In 2012, revenue from control environment products totaled 129.21 million baht accounted for 16.36% of total sales and services revenue, increased by 16.73 million baht (14.87% YoY) driven by an increase in sales order volume from electronic sectors which recovered from the great flood in late of 2011.

    In 2012, revenue from water treatment products totaled 39.91 million baht, decreased by 0.68 million baht from 2011 or 1.68% (YoY). In 2012, revenue from sales of water treatment equipments increased by 19.56 million baht while the revenue from design, manufacturing, and installment of water treatment systems decreased by 20.24 million baht.

    Consolidated Financial Statement 2012 2011 Change
    %
    Million baht % Million baht %
    Occupational Safety, Health and Environment Products
    620.90
    78.59%
    566.08
    78.71%
    9.68%
    Control Environment Products
    129.21
    16.36%
    112.48
    15.65%
    14.87%
    Water Treatment Products
    39.91
    5.05%
    40.59
    5.64%
    (1.68%)
    Total revenue from sales and services
    790.03
    100%
    719.14
    100%
    9.86%

    The Company's other revenues were totaled 4.10 million baht, comprising of 1.47 million baht from gain on foreign exchange following Thai Baht appreciation and 2.62 million baht from other income. In 2012, the Company's total revenue was 794.13 million baht, increased by 72.19 million baht from 721.94 million baht in 2011 or 9.99% (YoY)

  • Costs of sales and services
    In 2012, the Company's cost of sales and services totaled 571.31 million baht comprising of 564.11 million baht of cost of sales and 7.20 million baht of cost of services. The cost of sales and services increased by 62.54 million baht (12.29% YoY). The increase in cost of sales was associated with higher sales revenue as well as the rising in sales volume of low gross profit margin products. Meanwhile, the cost of services was decreased due to the revenue from design, manufacturing and installment of water treatment compared with 2011.

    Cost of sales and services in 2012 was accounted for 72.31% of total sales and services revenue resulting in 27.69% of gross profit margin while the cost of sales and services in 2011 was accounted for 70.75% of total sales and services revenue resulting in 29.25% of gross profit margin. The decline of gross profit margin was due to an increase sales of safety, occupational health and environmental products and services, which earned low gross profit margin, compared with 2011. Furthermore, the gross profit margin of water treatment products and services was not at high level. Meanwhile, the gross profit margin of services business was negative due to the loss in subsidiary company's project following the delay of service delivery.

  • Selling and administration expenses
    Selling expenses comprised of personnel expenses, related marketing promotion expenses, transportation expenses and other selling expenses. In 2012, the Company's selling expenses totaled 78.65 million baht increased by 2.61 million baht (3.43% YoY) due mainly to the higher of personnel expenses following the increase of staffs, variable pay for performance and higher transportation expenses which was varied with higher sales volume.

    Administration expenses comprised of personnel expenses, depreciation expenses and related administration expenses. In 2012, the Company's administration expenses totaled 82.22 million baht, decreased by 9.36 million baht (10.22% YoY) due mainly to the decrease of selling and administration expenses of subsidiary company by 6.5 million baht and lower of bad debt and doubtful debt by 3.85 million baht.

    The finance cost in 2012 totaled 3.49 million baht, decreased by 0.89 million baht from 2011 due to the decrease of bank overdrafts and borrowings interest rate.

    Corporate tax totaled 14.54 million baht, decreased by 1.45 million baht due to lower of tax rate.

  • Operating Profit
    In 2012, the Company's operating profit totaled 61.94 million baht, accounted for operating profit margin of 7.80%. The operating profit increased from 2011 following the higher revenue and lower operating expenses.

  • Net Profit
    The Company's net profit was 44.73 million baht, increased by 15.87 million baht or 54.99% (YoY) accounted for net profit margin of 5.63%

    Profitability Ratio

    Consolidated Financial Statement 2012 2011
    Gross Profit Margin
    27.69%
    29.25%
    Operating Profit Margin
    7.80%
    6.30%
    Net Profit Margin
    5.63%
    3.49%
    Return on Equity
    15.96%
    10.40%

    In 2012, the Company's return on equity was 15.96% increased from 10.40% in 2011 driven by an increase in sales. Although the gross profit margin was decreased resulting from the negative gross profit margin of water treatment system business however, overall expenses was declined including selling and administration expenses, bad debt and doubtful debt, finance cost as well as lower tax rate. As the result, the Company's net operating profit and net profit margin were increased.

Financial Position

Consolidated Financial Statement 2012 2011 Change
%
Million baht % Million baht %
Assets
501.63
100.00%
483.28
100.00%
3.80%
Liabilities
215.99
43.06%
213.21
44.21%
1.30%
Shareholders’ equity
285.64
56.94%
272.08
56.30%
4.98%

Asset

The Company's total assets as of December 31, 2012 were 501.63 million baht. The assets mix comprised of 348.18 million baht of current assets, 153.46 million baht of non-current assets. Total assets increased by 18.35 million baht or 3.8% (YoY) from total assets of 483.28 million baht in 2011 due mainly to an increase of inventories totaling 15.75 million baht.

  • Trade and other receivables-net
    In 2012, the Company's trade receivables were totaled 124.21 million baht which increased from 2011 due to trade receivables was varied a long with higher sales volume. Furthermore, the Company's credit term policy is at least 30 days. Thus, the average credit term for the customer was 53 days in which the Company will consider payment term from past performance, sales order, and historical payment. Furthermore, the Company will recognize allowance for doubtful account by estimated losses that may incurred in collection of receivable which was generally based on collection history, current financial status of account receivables. Accordingly, the Company will analyze each account receivables which aging over 180 days past due and inactive movement. Thus, the Company set up allowance for doubtful account at rate 100% of total remaining receivables. In 2012, the Company increased allowance for doubtful account by 0.17 million baht. The Company's other receivables are comprised of advance payment, withholding tax, undue input value added tax, etc.

  • Inventories-net
    In 2012, the Company's inventories-net were 195.62 million baht, increased by 15.76 million baht from 2011 or 8.76% (YoY). The inventories were increased due mainly to an rising of new product in order to expand the market.

    According to the policy for set up allowance for diminution in value of inventories for obsolete or impaired goods, the Company will consider from aging and condition of goods as follows;

    - Quick obsolete goods aging over 1 year (ex. shoes, eye-glasses, and rubber gloves, etc.) will be set up allowance for diminution in value of inventories of 50% of inventories value.

    - Quick obsolete goods aging over 2 years will be set up allowance for diminution in value of inventories of 100% of inventories value.

    - Impaired goods will be set up allowance for diminution in value of inventories of 100%.

    In 2012, the Company's allowance for diminution in value of inventories increased by 1.88 million baht from 2011. Meanwhile, allowance for diminution in value of inventories in 2011 increased by 3.12 million baht from 2010. The amount of allowance for diminution in value of inventories was decreased due to an improvement of inventory management.

  • Property, plant and equipment - net
    Property, plant and equipment-net in 2012 was 152.80 million baht, decreased by 6.86 million baht from 2011 due to the deduction of depreciation amounted to 15.07 million baht. During the year, there were acquisition of new assets in term of demonstration goods totaling 2.12 million baht, furniture and equipment totaling 2.24 million baht and other assets totaling 0.63 million baht.

Source of Funds

Liabilities

As of December 31, 2012, the Company's liabilities were 215.99 million baht increased by 2.78 million baht from December 31, 2011 or 1.30% (YoY). The liabilities mix comprised of 175.57 million baht, decreased by 6.68 million baht from 2011 following the decline of bank overdraft and short-term borrowing by 17.28 million baht and liabilities which due in 1 year decreased by 2.57 million baht however, the trade payables increased by 12.37 million baht.

The Company's non-current liabilities were 40.42 million baht, increased by 9.47 million baht due mainly to the Company entered into the long-term loan agreement facilities of 30 million baht. In addition, the Company recognized an increase in employment benefit by 3.59 million baht.

The Company had contingent liabilities with financial institution as follows;

Item Unit : Million Baht
Credit Line Draw down Remaining
L/C and T/R
188.00
21.46
166.54
Promissory Notes
65.00
-
65.00
Trust Receipt
30.70
5.32
25.38
Bank overdraft
46.50
2.71
43.79
Foreign currency forward contract : Thai Baht
220.00
-
220
Foreign currency forward contract : US Dollars
1.15
-
1.15

Shareholders' equity

Shareholder's equity as of December 31, 2012 was 288.46 million baht, increase by 16.38 million baht (5.77% YoY) from 2011, which had shareholders equity of 272.08 million baht, resulting from net profit for the year 2012 totaled 42.27 million baht.

In 2012, the Company had debt-to-equity ratio of 0.75 times, decreased from 0.78 times in 2011 due to an increase of shareholders' equity while liabilities were at the same level as in 2011.

Cashflow 2012
Million Baht
2011
Million Baht
Cashflow from (used in) operating activities
56.55
(1.10)
Cashflow from (used in) investing activities
(5.43)
(8.30)
Cashflow from (used in) financing activities
(46.22)
(50.58)
Net increase (decrease) in cash and cash equivalents
4.91
(59.99)
Cash and cash equivalents at the end of the year
23.90
19.00

Liquidity

In 2012, the Company had net cashflow from operating activities totaled 56.55 million baht in which the profit from operating activities before change in operating assets and liabilities totaled 79.26 million baht. Assets and liabilities from operation were changed due mainly to an increase of 4.93 million baht in trade receivable which varied along with higher sales. The inventories increased by 17.39 million baht from purchasing of new product in which the Company was expanding the market. Meanwhile, trade payable increased by 13.19 million baht and tax payment of 13.92 million baht.

Cashflow used in investment activities totaled 5.43 million baht which was cash paid for acquisition of fixed assets amounted to 4.99 million baht from acquisition of demonstration goods, decoration and office furniture and computer software, cash paid in loan to employee increased by 0.79 million baht. And cash from interest received of 0.36 million baht.

Cashflow used in financing activities totaled 46.22 million baht due to the decline of bank overdraft and short-term borrowing by 17.25 million baht, paid to leasehold right and repayment of long-term loan totaled 27.64 million baht, interim dividend payment of 28.35 million baht, interest payment of 2.99 million baht. However, the Company had cash received from long-term loan with financial institution amounted to 30 million baht.

The Company's cash and cash equivalents as of December 31, 2012 was 23.90 million baht increased by 4.91 million baht compared with as of December 31, 2011.

Liquidity Ratio

The Company's liquidity ratios were 1.98 times, increased by 0.21 times from 2011 following the Company had higher current assets from 2011 by 7.69% while the current liabilities decreased by 3.67% resulting in higher liquidity ratio.

The Company's average collection period in 2012 was 52.85 days which was closely to 2011 at 53.74 days. In addition, the Company has prudent credit policy and regularly reviewed.

In 2012, the Company's average inventories on hand was 119.94 days, increased by 9.02 days from 2011 due to the Company increased purchasing volume of new product.

In 2012, the Company's average payment period was at 57.42 days increased by 5.54 days from 2011 following higher volume of purchasing order whereby most of purchasing orders were imported goods which allowed longer credit term compared with domestic order.

Liquidity ratio 2012 2011
Liquidity ratio (times)
1.98
1.77
Current ratio (times)
0.87
0.79
Average collection period (days)
52.85
53.74
Average payment period (days)
57.42
51.88
Average inventories on hand (days)
119.94
110.92
Cash Conversion Cycle (days)
115.37
112.78

Management Discussion & Analysis (MD&A) Yearly 2011

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Operating Performance Overview

In 2011, the Company's core business is a distributor of occupational health and safety products, exhibited good expansion in line with the domestic economy. Although the Company was affected by flooding crisis in the fourth quarter, the revenue from sales of occupational health and safety products still expanded by 10.27% (YoY).

With regard to the water treatment business, the revenue improved from 2010 driven by the continually carried out of marketing activities. In the second quarter of 2011, the Company additionally invested in its subsidiaries amounted to Baht 8.50 million, representing 76.67% of the share capital of its subsidiaries. However, the Subsidiary's revenue has been below the target, resulting in net operating loss in 2011.

In 2009, 2010, and 2011, the Company's total revenues were Baht 475.80 million, Baht 648.83 million, and Baht 721.94 million, respectively. The net profit in 2009, 2010, and 2011 in amount of Baht 17.61 million, Baht 37.76 million, and Baht 25.18 million, respectively. In 2009, the Company recorded a profit from the sale of investment in Angle Alliance Co., Ltd. amounted to Baht 4.52 million.

In 2009, 2010, and 2011, the Company's total assets were Baht 357.92 million, Baht 483.86 million, and Baht 483.28 million, respectively. In 2010, an increase in total assets was driven by rising in account receivables and inventories following the expansion in sales and remaining cash from capital rising in stock market in December 2010.

Operating Performance Analysis

Income

In 2010, the Company's sales and services revenues were Baht 637.87 million, up by 36.14% (YoY) resulting from higher sales order following the economic recovery from the contraction which deteriorating sales revenue in 2009.

In 2011, the Company's sales and services revenues were Baht 719.14 million, increased by 12.74% (YoY) following an increase of sales order contributed by improvement in economic condition. Moreover, an increase in core revenue was driven by higher sales of personal protective equipments, safety and environmental equipments.

For the revenue structure in 2009, 2010, and 2011, the revenue from sales of personal protective equipment accounted for 83.02%, 81.04% and 80.79% of total revenues, respectively. The revenue from occupational safety equipments accounted for 15.45%, 14.08% and 13.20% of total revenues, respectively. The revenue from water treatment system accounted for -%, 3.49% and 5.62% of total revenues, respectively while other revenues accounted for 1.53% and 1.39% and 0.39% of total revenues, respectively.

With regard to the sales of water treatment equipments and design, manufacture, construction and installment of water treatment systems business, the Company has operated this business since 2009. In 2010 and 2011, the Company's revenue from sales of water treatment equipments amounted to Baht 4.21 million, and Baht 16.55 million while revenue from design, manufacture, construction and installment of water treatment systems amounted to Baht 18.02 million, and Baht 21.93 million, respectively.

Costs and Expenses

  • Costs of sales and services
    The Company's costs of sales and services of the year 2009, 2010, and 2011 were Baht 329.34 million, Baht 438.68 million, and Baht 508.77 million, respectively which accounted for 70.29%, 68.77% and 70.75% of total revenues, respectively. As the result, the Company's gross profit margin in 2009, 2010, and 2011 by 29.71%, 31.23% and 29.25% of total revenues, respectively. In 2010, gross profit margin improved due to lower price competition amid ongoing economic recovery. In 2011, gross profit margin declined due to higher share of low gross margin products, coupled with negative gross profit margin in service business.
  • Selling and Administrative Expenses
    Selling and Administrative Expenses comprised of personnel expenses, depreciation, interest, advertising, product exhibition and transportation expenses, etc. In 2009, 2010, and 2011 selling and administrative expenses were Baht 113.11 million, Baht 147.47 million, and Baht 167.61 million, respectively accounted for 24.36%, 23.16% and 23.31% of total revenues, respectively.

    The selling expenses in 2009, 2010, and 2011 were Baht 39.83 million, Baht 68.71 million, and Baht 76.04 million, respectively accounted for 8.50%, 10.77% and 10.57% of total revenue, respectively. In 2009, the proportion of selling expenses were increased due to declining in sales together with there was fixed selling expenses that did not vary with the declining in sales. In 2010 and 2011, the proportion of selling expenses increased from 2009 following an increase amount of employees in associated with business expansion, rising sale incentive for sales officer to motivate higher business volume, and new bonus scheme for sales function started from 2010.

    For the administrative expenses in 2009, 2010 and 2011 were Baht 74.29 million, Baht 79.04 million, and Baht 86.97 million, respectively accounted for 15.86%, 12.39% and 12.09% of total revenues, respectively.

    The administrative expenses consisted of a proportion of fixed expenses such as personnel expenses, etc. In 2009, the proportion of administrative expenses increased due to lower of 18.57% in sales. Meanwhile, the sales and services revenue in 2010 improved by 36.14% (YoY) resulting in lower in proportion of administration expenses from the previous year.
  • Operating Profit Margin
    Operating profit margin excluding of non-recurring items in 2009, 2010 and 2011 accounted for 6.65%, 8.98% and 6.30%, respectively.

    In 2009, the operating profit margin declined due to lower in gross profit margin following price competition during the economic crisis together with the lower in sales, resulting in higher selling and administration expenses in which there were some fixed expenses that did not vary with declining in sales.

    In 2010, the operating profit margin increased following an increase in gross profit margin due to lower price competition.

    In 2011, the operating profit margin decreased due mainly to decrease in gross profit margin and impairment loss of obsolete inventories, impairment loss of fixed assets, and impairment loss of doubtful account.
  • Net Profit Margin
    Net profit margin for the year 2009, 2010, and 2011 was 3.70%, 5.84% and 3.49%, respectively. Items affected net profit margin for the year 2009, 2010, and 2011 are summarized as follows;

    In 2009, the Company's net profit margin was significantly declined due to decrease in sales and lower in gross profit margin following economic downturn which affected product demand coupled with higher price competition. In 2010, the Company's net profit margin increased following recovery of economy and industry of the Company's customer base together with lower price competition.

    In 2009, 2010, and 2011, the Company's return on equity was 10.93%, 17.71% and 10.40%, respectively. In 2009, the return on equity was declined due to declining in profitability following lower in sales and gross profit margin. In contrast, sales and gross profit improved in 2010 resulting in higher return on equity. In addition, net profit, net profit margin, and return on equity of separate financial statement were higher than those in consolidated financial statement for the year 2010 due to loss in its subsidiaries. Moreover, the Subsidiary started business operation in November 2009 and continually carried out marketing activity since commencement however, it required a certain period of time to penetrate the market. As the result, the Subsidiary initially recorded revenue in the third quarter of 2010. The subsidiary therefore recorded net loss in 2010. In 2011, the return on equity decreased from 2010 due to water treatment system business recorded negative gross profit margin. Furthermore, the Company recorded allowance for doubtful account of its subsidiaries and impairment loss of fixed assets.

    Profitability Ratio Consolidated Financial Statement Separate Financial Statement
    2009 2010 2011 2009 2010 2011
    Gross Profit Margin 29.71% 30.87% 29.25% 29.71% 31.01% 30.63%
    Operating Profit Margin 6.65% 8.98% 6.30% 5.39% 8.49% 6.63%
    Net Profit Margin 3.70% 5.84% 3.49% 2.97% 6.69% 4.21%
    Return on Equity 10.93% 13.93% 10.40% 8.55% 18.99% 10.48%

Financial Position

Assets

The Company's total assets in 2009, 2010, and 2011 were Baht 357.91 million, Baht 483.86 million, and Baht 483.28 million, respectively. The key assets including account receivable, inventory, and property, plant and equipment.

In 2009, the Company's total assets decreased due to lower of inventories and account receivables resulting from the Company released the inventories and decelerate the replenishment. Meanwhile, account receivable was decreased due to a lower in sales. In addition, the Company sold of investment in Angel Alliance Co., Ltd. together with loan and accrued interest of that Company.

In 2010, the Company's total assets increased from the end of 2009 due to an increase in account receivable and inventories following an increase in sales compared with the same period of previous year.

In 2011, the Company's total assets almost unchanged from the total assets at the end of 2010

  • Trade receivables
    In 2009, 2010, and 2011, the Company's trade receivables were Baht 81.39 million, Baht 100.76 million, and Baht 110.98 million, respectively. In 2009, the trade receivable increased while sales dropped due to the Company expanded payment period for customer who was affected by economic slowdown. Upon the improvement in economy in 2010, the sales improved from the previous year resulting in higher account receivables. For the year 2011, trade receivables increased following improvement in sales.

    The Company's credit term is at least 30 days. The average credit term for the customer is in range of 50 - 60 days. The Company will consider payment term from past performance, sales order, and historical payment.

    In addition, the outstanding balance of trade account receivable aged by number of days as of December 31, 2009, 2010, and 2011 are detailed as follows;

    Unit : Baht
    Aging Consolidated Financial Statement
    December 31, 2009 December 31, 2010 December 31, 2011
    Not yet due 58,210,542.81 60,980,779.64 66,253,064.10
    Over-due:
    1-60 days 22,442,277.59 34,987,328.57 41,573,097.19
    61-120 days 662,214.30 3,509,839.60 3,182,491.04
    121-180 days 57,587.40 1,496,744.36 290,181.79
    Over 180 days 2,512,401.43 2,193,538.30 5,940,717.48
    Total 83,885,023.53 103,168,230.47 117,239,551.60
    Less Allowance for doubtful accounts 2,499,138.29 2,409,326.44 6,254,409.10
    Trade receivables - net 81,385,885.24 100,758,904.03 110,985,142.50

    The Company will recognize allowance for doubtful account by estimated losses that may incurred in collection of receivable which generally based on collection history, current financial status of account receivables. Normally, the Company will analyze each account receivables which aging over 180 days past due and inactive movement. Thus, the Company set up allowance for doubtful account at rate 100% of total remaining receivables.

    The account receivables over 180 days past due in 2009, 2010, and 2011 were Baht 2.51 million, Baht 2.19 million, and Baht 5.94 million, respectively. The Company has allowance for doubtful account during 2009, 2009, and 2011 were Baht 2.50 million, Baht 2.41 million, and Baht 6.25 million, respectively. In 2009, the allowance for doubtful account increased resulting from the customer loss repayment ability as he was in financial trouble, in which sales of such account was recognized in late of 2008. Furthermore, the Company has fully set up provision for doubtful account for that customer since 2009. In 2011, the rising in account receivable over 180 days past due was contributed by customer of water treatment business.
  • Inventories
    In 2009, the Company's inventories totaled Baht 96.45 million, and Baht 128.78 million in 2010, decreased by 33.52% (YoY) in order to support higher sales in 2010. This amount included work in process of its subsidiaries amounted to Baht 2.70 million. As of December 31, 2011, the inventories totaled Baht 179.86 million, decreased by 39.66% (YoY) in order to support higher sales in 2012 as well as imported product in order to penetrating new target customer.
    Unit : Baht
    Consolidated Financial Statement
    December 31, 2009 December 31, 2010 December 31, 2011
    Finished goods 95,909,929.22 120,856,193.81 167,024,109.45
    Goods in transit 5,948,152.34 9,077,965.42 17,554,373.96
    Consignment goods - - 480,940.35
    Work in process - 2,109,282.40 490,343.58
    Raw materials - 2,249,990.75 713,061.77
    Total 101,858,081.56 134,293,432.38 186,262,829.11
    Less Allowance for diminution in value of inventories 5,407,479.66 5,515,119.54 6,400,357.46
    Inventories - net 5,407,479.66 5,515,119.54 6,400,357.46

    For the guideline to set up allowance for diminution in value of inventories for obsolete or impaired goods, the Company will consider from aging and condition of goods as follows;

    • Quick obsolete goods aging over 1 year (ex. shoes, eye-glasses, and rubber gloves, etc.) will be set up allowance for diminution in value of inventories of 50% of inventories value.
    • Quick obsolete goods aging over 2 years will be set up allowance for diminution in value of inventories of 100%.
    • Impaired goods will be set up allowance for diminution in value of inventories of 100%.
    Since beginning of the third quarter of 2010, the Company has policy to set up allowance for diminution in value of inventories for slow obsolete goods by considering from the aging of goods which greater than 5 years. Also, the Company considered to set up allowance for diminution in value of inventories for each item which its turnover greater than 5 years as appropriate.

    In 2009, the Company's allowance for diminution in value of inventories was Baht 5.41 million due mainly to allowance for diminution in value of safety shoes aging over 1 year whereby the Company had ordered during the second quarter of 2008. Furthermore, the slow releasing of goods was due to the declining in sales amid economic slowdown. As the result, the Company set up allowance for diminution in value of inventories of 50%, resulting in impairment loss of inventories in 2009 amounted to Baht 4.77 million.

    In 2010, the Company's allowance for diminution in value of inventories was Baht 5.52 million, and recorded impairment loss of inventory amounted to Baht 2.31 million following allowance for diminution in value of inventories for slow obsolete goods aging greater than 5 years which had set up since the third quarter of 2009 as aforementioned. Moreover, the auditor was further set up allowance for diminution in value of inventories by considering the turnover of each product category. As the result, there was additionally allowance for diminution in value of inventories amounted to Baht 1.21 million.

    In 2011, the Company's allowance for diminution in value of inventories was Baht 6.40 million, and recorded impairment loss of inventory amounted to Baht 0.89 million due to the guideline of allowance for diminution in value of inventories by considering the turnover of each product category. In 2011, the Company has increased allowance for diminution in value of inventories was Baht 3.12 million when compared to 2010.
  • Property, Plant and Equipment
    Net property, plant and equipment for the year 2009, 2010, and 2011 was Baht 140.55 million, Baht 153.22 million, and Baht 153.56 million, respectively. A decline of property, plant and equipment in 2009 due mainly to depreciation, mostly comprised of office building and new warehouse with area of 5-0-1 Rai at Lumlukka district, Pathumthani which its investment value totaled Baht 138.36 million.

    In addition, property, plant and equipment as of December 31, 2010 increased from 2009 due mainly to new acquisition of land and building amounted to Baht 12.55 million which used as Rayong branch.
  • Non-operating assets
    Non-operating assets in 2009 and 2010 were Baht 7.28 million and Baht 2.57 million.

    In 2009, the auditor has been changed accounting classification for property, plant and equipment which were not used for ongoing operation of the business resulting in higher value of non-operating assets in that period. Moreover, Industrial Condominium-Narita Building, Nontaburi was additionally recorded as non-operating asset.

    In 2011, the auditors has changed asset classification by restating assets which were not used for ongoing operation of the business to classify under investment property item, applying retrospective to accounting classification in 2010.

    For the operating guideline for non-operating assets, the Company will sale of assets when there are appropriate price available. During regular period, the Company has policy to lease such assets to generate income.

    For the non-operating assets impairment guideline, the Company has applied the same standard as operating asset.
  • Investment in its subsidiaries
    In November of 2009, the Company invested in PD Genesis Engineering Co., Ltd., who operates design, manufacture, construction and installment of wastewater treatment system, water supply and drinks, wastewater treatment system for reuse, totaled Baht 3 million or representing 60% of share capital of its subsidiaries.

    In second quarter of 2010, the Company was additionally invested in PD Genesis Engineering Co., Ltd., who operates design, manufacture, construction and installment of wastewater treatment system, water supply and drinks, wastewater treatment system for reuse, amounted to Baht 11.5 million or representing 76.67% of share capital of its subsidiaries. However, the Subsidiary recorded net loss exceeds capital. Therefore, the Company has fully set up the total amount of impairment loss on investment in subsidiary.
  • Loan to Subsidiary Company
    The Company granted short-term loan to its subsidiaries by issuing promissory note, which repay at call, amounting to Baht 5 million with interest rate MLR plus 3% per annum. The Subsidiary used short-term loan as working capital.
  • Investments in associate company
    In 2008 and 2009, the Company recognized net loss from equity investment of Angel Alliance Co., Ltd. amounted to Baht 0.95 million and Baht 0.34 million, respectively resulting in decrease of investment value amounted to Baht 1.06 million and Baht 0.72 million, respectively.

    In June 2009, the Company however, sole of investment in Angel Alliance Co., Ltd. at par value together with loan totaled to 544,645 million Singapore dollars to Mr. Chavalit Wangthamrong, Mr. Teeradej Jarutangtrong and Mr. Xiao Li Yue who are the management of Angel Safety Equipment (Shaghai) Corporation Limited at portion of 11.20%, 4.80% and 9.00% of share capital, respectively. In addition, the Company recorded gain from sole of investment amounted to Baht 4.52 million.
  • Long-term investment for related party
    In 2004, the Company invested in N&P Holding Co., Ltd., who operates restaurant business, amounted to Baht 1 million, representing 2% of total registered capital. Consequently, such Company continually record net loss and ceased business operation. In 2007, the Company had fully set up total amount of impairment loss on investment.
  • Long-term long for associate company
    The Company granted loan to Angel Alliance Co., Ltd. amounted to 544,645 Singapore Dollar with the interest rate of 4.25% per annum, in compliance with the shareholder agreement. There was no change of principal amount in 2007 and 2008 however, the financial statement showed different amount due to effect of exchange rate.

    Due to Angel Alliance Co., Ltd. recorded net loss over time and unable to repay interest burden to the Company. In 2008, the Company therefore set up allowance for doubtful account for the portion of accrued interest payment of Baht 1,271,781.68 and record additional amount during 2009 until the Company had sole of investment in Angel Alliance Co., Ltd. Consequently, Mr. Chavalit and Mr. Teeradej have responsed to repay loan of 544,645 Singapore Dollar, coupled with accrued interest totaling 62,704.87 Singapore Dollar.
  • Long-term loan for related party
    In 2009, the Subsidiary granted long term loan to related company, which was Genesis Environment Service Co., Ltd., in form of loan agreement facility with credit line of Baht 4.80 million, interest rate at 15% per annum with monthly installment. The first installment was in January 2010 and completed within 66 months. As of December 31, 2009, the loan was draw down by Baht 3.80 million. The loan agreement was in accordance with the agreement in persuading shareholder of Genesis Environment Service Co., Ltd., to joining invest and manage in its subsidiaries. However, Genesis Environment Service Co., Ltd. repaid full principal amounts to its subsidiaries in July 2010.

Liquidity

Cash flow from operations

In 2009, the Company's cash flow from operation amounted to Baht 86.98 million, mainly from an increase in profit before tax amounted to Baht 25.78 million, a decrease in inventory amounted to Baht 45.72 million and an increase in trade account payable amounted to Baht 22.61 million.

In 2010, the Company's cash flow from operation was Baht 22.51 million, mainly from a profit before tax amounted to Baht 52.90 million, an increase in inventory amounted to Baht 32.97 million and an increase in other current liabilities amounted to Baht 12.39 million.

In 2011, the Company's cash flow from operation amounted to Baht 1.10 million, mainly from a profit before tax amounted to Baht 41.17 million, an increase in inventory amounted to Baht 53.96 million, an increase in trade account receivable and account payable amounted to Baht 17.75 million and Baht 21.28 million, respectively.

In addition, in 2010, the Company had changed the auditors who reclassified the account types in financial statement for the year ended December, 31, 2009, which might caused some items such as cash and cash equivalents, not the same as the old classification in the balance sheet.

Cash Flows from Investing Activity

In 2009, the Company's cash flow from investing amounted to Baht 15.62 million, mainly from cash received from sales of long-term debentures to its subsidiaries amounted to Baht 12.62 million, cash received from sale of investment in its subsidiaries amounted to Baht 4.35 million and cash paid for long-term debentures to its subsidiaries, Genesis Environment Service Co., Ltd. amounted 3.80 million baht. Meanwhile, cash flow received from investing activities in separated financial statement was included the investment in its subsidiaries, PD Genesis Engineering Co., Ltd. amounted to Baht 3.00 million and short-term loans to its subsidiaries amounted to Baht 5.00 million.

In 2010, the Company's cash flow from investing amounted to Baht 17.82 million, mainly from cash paid for purchase of fixed assets amounted to Baht 19.43 million, consisted of a purchase of land and property (including additional section) for Rayong branch amounted to Baht 12.55 million.

In 2011, the Company's cash flow from investing amounted to Baht 8.30 million, mainly from cash paid for purchase of fixed asset amounted to Baht 11.06 million. The main reason for the purchase of water treatment - water recycling equipment as assets under water purchase agreement of Central Group at Chonburi and Khon Kaen amounted to Baht 9.40 million.

Cash flow from financing

In 2009, the Company's cash flow from financing amounted to Baht 92.07 million, mainly from a decrease of overdrafts and short-term loans from financial institutions amounted to Baht 55.51 million, repayment of long-term loans from banks amounted to Baht 13.46 million. Also, the Company had a policy of paying dividend from net profit of 2008 totaled Baht 12.35 million and profit arising from the 2008 operating results amounted to Baht 4.75 million.

In 2010, the Company's cash flow from financing amounted to Baht 58.89 million, mainly from cash received from increasing capital amounted to Baht 137.69 million, a decrease in overdrafts and short-term loans amounted to Baht 42.96 million, cash repayment for long-term loans from banks amounted to Baht 16.08 million, and dividend payment was Baht 36.1 million, consisted of additional dividend payment from profit arising from the 2009 operating results amounted to Baht 7.60 million and interim dividend payment from the profit arising from the first half of the year 2010 and retained earnings amounted to Baht 28.5 million.

In 2011, the Company's cash flow from financing amounted to Baht 50.58 million, mainly from an increase in overdrafts and short-term loans amounted to Baht 24.55 million, repayment of long-term loans from banks amounted to Baht 22.63 million and dividend payment amounted to Baht 47.25 million, comprise of dividend payment from profit arising from the 2010 operating results amounted to Baht 33.75 million which paid in addition to the interim dividend payment of 2010 together with the interim dividend payment from profit arising from the first half of the 2011 operating results and retained earnings amounted to Baht 13.50 million.

Liquidity Ratio

In 2009-2011, the Company's liquidity ratios were 1.31 times, 2.01 times and 1.77 times, respectively.

In 2009, 2010, and 2011, the average collection period was 63 days, 57.66 days and 53.74 days, respectively. In 2009, the average collection period was longer than in 2008 mainly due to some customers who had good payment history but affected by economic slowdown. In 2010, the period was shorter than 2009 due to the customers paid more punctual, following economic recovery and higher proportion of short term payment customers in sales structure.

In 2009, 2010 and 2011, average inventory on hand period was 134.67 days, 107.64 days and 110.92 days, respectively. In 2008, the period was longer 2009 due to a decrease in sales, while there were high inventories. Meanwhile, in 2010, the sales were increasing together with declining of inventories, resulting in shorter average inventory on hand compared with 2009. In 2011, due to the flood crisis in the fourth quarter, the sales was decreased due to some customers were affected by the flooding and currently on recovery period. As the result, the sales order from flood-affected customer segment was decreased.

In 2009, 2010 and 2011, the average payment period was 57.38 days, 52.36 days and 51.88 days, respectively. In 2009, the payment period was declined following the shoes order which received long payment term was slowdown where there had high inventories, coupled with the main supplier decreased the payment term. In 2010, average payment period was slightly decreased when compared to 2009 whereby the proportion of international trading which had longer payment term than domestic trading. In 2011, average payment period increased due to higher proportion of international trading. Domestic and international trade accounts payable were detailed as follow;

Consolidated Financial Statement
December 31, 2010 December 31, 2011
Domestic trade accounts payable 23,300,596.87 17,662,353.95
Foreign trade accounts payable 39,631,608.96 64,025,061.41
Total 62,932,205.83 81,687,415.36

Liquidity ratio Consolidated Financial Statement
2009 2010 2011
Liquidity ratio (times) 1.31 2.01 1.77
Current ratio (times) 0.68 0.71 0.78
Average collection period 63 57.66 53.74
Average payment period 57.38 52.36 51.88
Average inventory on hand 134.67 107.64 110.92
Cash Conversion Cycle 140.29 112.93 112.78

Source of Funds

Liabilities

According to equity method, the Company's current liabilities amounted to Baht 154.29 million and non-current liabilities in amount of Baht 39.52 million in 2009.

In 2010, the Company's current liabilities amounted to Baht 158.96 million and non-current liabilities amounted to Baht 41.70 million, when compared to 2009, the borrowings decreased by Baht 34.07 million due mainly to a decrease in overdrafts and short-term loans from financial institutions amounted to Baht 42.99 million. Furthermore, the Company had higher working capital from capital rising activity through public share offering, result in lower demand of overdrafts and short-term loans from financial institutions.

In 2011, the Company's current liabilities amounted to Baht 182.25 million and non-current liabilities amounted to Baht 30.96 million, due mainly to an increase in overdrafts and short-term loans from financial institutions amounted to Baht 24.54 million.

Unit: Baht
Borrowings Consolidated
December 31, 2009 December 31, 2010 December 31, 2011
Overdrafts and short-term loans from financial institutions 56,903,937.53 13,917,829.32 38,456,221.10
Long-term loans 38,690,907.76 38,856,874.82 15,431,971.19
Current portion of long-term loans 14,042,601.49 22,792,958.96 23,588,504.73
Total 109,637,446.78 75,567,663.10 77,476,697.02

In 2009, 2010 and 2011, the Company's debt to equity ratios was 1.18 times, 0.71 times and 0.78 times, respectively. In 2010, the ratio was decreased due to a decrease in liabilities after overdrafts and short-term loans repayment. Meanwhile, equity increased from capital raising activity amounted to Baht 40.00 million and premium on share amounted to Baht 97.69 million. Total liabilities increased from cash received on long-term loans from financial institutions amounted to Baht 25.00 million, accrued dividend amounted to Baht 20.25 million and overdrafts and short-term loans from financial institutions decreased by Baht 42.99 million.

COMMITMENTS AND CONTINGENT LABILITIES

The Company's commitments were letters of guarantee which issued for government agency customer. The outstanding amount of letters of guarantee as of December 31, 2009, 2010 and 2011 are summarized as follow;

Unit: Baht
Company Letter of guarantee outstanding
December 31, 2009 December 31, 2010 December 31, 2011
Phol Dhanya Plc. 2,404,070.50 2,667,938.74 3.260,212.03

The Subsidiary is permitted to utilize the guarantee line of the Company, amounted to Baht 20,000,000 million, approved by the resolutions of Board of Director No. 9/2552 as of November 9, 2010. The Company and its subsidiaries have made a guarantee contract for each others, including Mr. Chavalit Wangthamrong and Mr. Surapol Hungsapruek, the directors of its subsidiaries, had also entered into the guarantee contract which signing on September 15, 2010. As of December 31, 2011, the Subsidiary had no remaining letters of guarantee.

Equity

According to the consolidated financial statement in 2009, the Company's equity amounted to Baht 164.10 million, an increase of profit arising from the 2009 operating results amounted to Baht 17.61 million. In addition, the Company had dividend payment from profit arising from the 2008 operating results amounted to Baht 12.35 million and profit arising from the first half of the 2009 operating results amounted to Baht 4.75 million.

In 2010, the Company's equity amounted to Baht 283.20 million, mainly from issuance of common share offering amounted to Baht 40 million and share premium amounted to Baht 97.69 million. In addition, the Company had dividend payment from profit arising from the second half of the 2009 operating results amounted to Baht 7.60 million, and paid interim dividend from profit arising from the first half of the 2010 operating results amounted to Baht 7.60 million and retained earnings amounted to Baht 20.90 million. In 2010, the Company's operating profit amounted to Baht 37.76 million.

In 2011, the Company's equity amounted to Baht 270.07 million, a decrease due to adjusting commitments of employee benefits amounted to Baht 12.71 million and retained earnings. In addition, the Company had dividend payment from profit arising from the second half of the 2010 operating results amounted to Baht 13.50 million, and paid interim dividend from profit arising from the first half of the 2011 operating results amounted to Baht 13.50 million. In 2011, the Company's operating profits amounted to Baht 25.18 million.

The External Auditor's Fee

  1. Audit Fee
    In 2008, the Company has paid the audit fee to Mrs. Suvanee Kittipanyangam, Certified Public Accountant No. 2899 of Banchikij Co., Ltd. in amount of Baht 790,000 and Baht 820,000 in 2009.

    In 2010, the Company has paid the audit fee to Mr. Athipong Athipongsakul, Certified Public Accountant N0. 3500 of ANS Audit Co., Ltd. was Baht 635,000. In 2011, the Company has paid the audit fee to Mr. Sathien Vongsnan, Certified Public Accountant No. 3495 in amount of Baht 805,000 which including the audit fee of its subsidiaries in amount of Baht 225,000.
  2. Non Audit Fee
    -None-

Factors that may have an effect on the operating results or financial position in the future

-None-

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  • Address 1/11 Moo 3, Lamlukka Rd., Ladsawai, Lamlukka Pathumthani 12150

  • Tel. (02) 791-0111 Fax. (02) 791-0100-3

  • Email. info@pdgth.com