(TRANSLATION)

 

 

Ref:                  DY/SEC/002/2007                                                                     

                                                                                                                11 May 2007

 

Subject:            Explanation of the 1st quarter 2007’s operating result which has varied by 20 %

                        over or under that of the preceding year

 

To:                    The Secretary

                        The Office of the Securities and Exchange Commission

 

Christiani & Nielsen Thai PCL. would like to explain the reasons for the actual operating result varying by 20% from the preceding year.

 

The Company would like to inform that for the 1st quarter 2007, the Consolidated net profit of Baht 16 million increased from the same quarter in the previous year by Baht 3 million, as in year 2007, the gross profit increased by Baht 2 million which resulted in an increase of Construction income; administrative expenses decreased from the previous year by Baht 2 million and depreciation increased by Baht 4 million since the Company increased its Non-Current Assets. In addition, the results of discontinued operation units and interest income increased by Baht 3 million.

 

For the Separate Financial Statement, the net profit of Baht 13 million decreased from the same quarter in the previous year by Baht 10 million since the Company had a decrease of dividend income from the Joint Venture of Baht 8 million and had an increase of administrative expense of Baht 4 million. However, in year 2007, the Company had an increase of gross profit and interest income of Baht 2 million.    

 

Furthermore, the Company would like to clarify that during the fourth quarter of 2006, the Company changed its accounting policy for recording investments in subsidiary companies in the separate financial statements from the equity method to the cost method, in compliance with Notification No. 26/2549 regarding Accounting Standard No. 44 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries” (Amendment No. 1), issued by the Federation of Accounting Professions, under which investments in subsidiaries, jointly controlled entities and associates are to be presented in the separate financial statements under the cost method rather than the equity method. The Company also restated the same quarter in the previous year financial statements as though the investment in the subsidiaries had originally been recorded using the cost method.

 

The change has the effect of increasing net income in the separate financial statements for the three-month period by approximately Baht 11 million (Baht 0.03 per share). The cumulative effect of the change in accounting policy has been presented under the heading of “Cumulative effect of the change in accounting policy for investments in subsidiary companies” in the separate statements of changes in shareholders’ equity. However, the change of accounting policy did not have any effect on the consolidated financial statements.

           

Please be informed accordingly.

 

Yours faithfully,

Christiani & Nielsen (Thai) Public Company Limited

 

Signature –

 

(Mr. Danuch Yontararak)

Managing Director

 

 

CC:       Vice President, Listed Company Department

            The Stock Exchange of Thailand