(TRANSLATION)
Ref: DY/SEC/001/2008
26 February 2008
Subject: Explanation
of the year 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
The Company would like to inform that for the year ended 31
December 2007, the Consolidated net profit of Baht 117
million increased from the previous year by Baht 52 million, as in year 2007, the
Construction income increased from the previous year approximately of 30%, which
resulted in an increase of the gross margin of Baht 41 million. And in year 2007,
the Subsidiary had an increase of dividend income from the Other Company from
the previous year of Baht 10 million. And the results of discontinued operation
units increase from year 2006 of Baht 7 million.
For the Separate Financial Statements, the net profit of
Baht 78 million increased from the previous year by Baht 26 million due to an
increase of the gross margin of Baht 43 million, as the above-mentioned reasons.
Furthermore In year 2007, the Company had reversal of allowance for impairment
loss of investments in real estate, plant and equipment in the amount of Baht 10
million. However in year 2007 the Company had a decrease of dividend income
from the Joint Venture of Baht 10 million, decrease of other income of Baht 6
million and increase of depreciation by Baht 11 million.
Furthermore, the Company would like to inform that the
Company has changed accounting policies as follows:
1. Change
in accounting policy for recording investments in subsidiaries and jointly controlled entities in the
separate financial statements
During
the fourth quarter of 2006, the Company changed its accounting policy for
recording investments in subsidiaries and jointly controlled entities in the
separate financial statements from the equity method to the cost method, in
compliance with Accounting Standard No. 44 (revised 2007) “Consolidated and
Separate Financial Statements”, under which investments in subsidiaries, jointly
controlled entities and associates are to be presented in the separate
financial statements under the cost method.
In
this regard, the Company had restated the previous period’s separate financial
statements, as though the investments in the subsidiaries and jointly
controlled entities had originally been recorded using the cost method. The change has the effect of decreasing
net income in the separate income statement for the year ended 31 December 2006
by Baht 14 million (Baht 0.04 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 subsidiaries and jointly controlled entities” in the
separate statement of changes in shareholders’ equity.
Such
change in accounting policy affects only the accounts related to investments in
subsidiaries and jointly controlled entities in the separate financial
statements, with no effect to the consolidated financial statements.
2. Change
in accounting policy for recording revaluation of assets
In October 2006, the Federation of Accounting Professions
issued Notification No. 25/2006 allowing entities which carry their property, plant
and equipment at revalued amounts to calculate depreciation to be charged to
the income statement based on the historical cost of the assets instead of on
the revalued amounts. The Company had carried out a new revaluation of its
buildings and decided to follow the Notification.
In this regard, the Company had restated the previous
period’s financial statements as through the Company had originally followed
such notification. The change has
the effect of increasing net income in the income statements for the years
ended 31 December 2007 and 2006 by Baht 0.6 million (Baht 0.002 per share) and
Baht 0.3 million (Baht 0.001 per share), respectively, with no effect to the
retained earnings or shareholders’ equity.
Please be informed accordingly.
Yours faithfully,
– Signature –
(Mr. Danuch
Yontararak)
Managing Director
CC: Vice President, Listed
Company Department
The
Stock Exchange of