August 14, 2007
Subject: Clarification of Operating Results of the Company and Subsidiaries
for the 2nd quarter of the year 2007
To: Secretary General
The Office of Securities and Exchange Commission, Thailand
The Union Mosaic Industry Public Company Limited has submitted the
company's consolidated Financial Statements for the three months ended June
30, 2007 which were reviewed by certified auditor. The results of operating in
Q2/2007 compared to those in Q2/2006 are as followings:
(Unit : million baht) 2nd Quarter Change Increase / (Decrease)
2007 2006 Million baht percent
Total revenues 528.52 562.75 (34.23) (6%)
Net profit (Loss) (36.51) (44.79) 8.28 18%
The significant changes of operating result are as follows:
1. Revenue from sales in Q2/2007 were baht 523.35 million which was
decreased baht 25.84 million or 5 percent compared to the revenues in
Q2/2006, which due to the slowing-down market.
2. Selling and administrative expenses in Q2/2007 were baht 72.77 million
which a decrease of baht 19 million or 21 percent compared to those in
Q2/2006, which was the result of the company's policy to reduce sales
and marketing expenses.
3. Interest expense in Q2/2007 was baht 17.25 million, decreased by baht
3.73 million or 18 percent from that in Q2/2006, due to repayment of
long-term and short-term loan.
In 2007, the company has changed accounting policy for its investments in
subsidiaries and associated from equity method to cost method in separate
financial statements, to comply with the announcement of the Federation of
Accounting Professions No.26/2006 on the subject of accounting procedures to
follow accounting standard No.44 on Consolidated Financial Statements and
Accounting for Investment in the Subsidiary Company dated October 11, 2006.
The change resulted in difference in net loss on the separate financial
statement and from that reported in the consolidated financial statement. In
Q2/2007, the consolidated statement reported a net loss of baht 36.51 million,
while separate financial statements showed a net loss of baht 36.04 million.
As at June 30, 2007, investment in subsidiaries and associated, recorded at
the historical cost adjusted by allowance for impairment of investments, was
shown a book value of baht 69.38 million.
The company has retrospectively the financial statements as at December
31, 2006 for comparison purpose, by reversing the participating of loss in
subsidiary and associated companies. This resulted in an increase of baht
7.15 million in retained earnings as at December 31, 2006 and net loss of
Q2/2006 increased by baht 4.85 million.
However, the change affected only by a change in accounting policy not
business fundamentals of the company. The company's dividend policy remained
the same as to pay dividend not less than 50 percent of net profit in separate
financial statement.
Please be informed accordingly.
Yours sincerely,
(Miss Paweena Laowiwatwong)
The Chairman of Executive Board of Directors
The Union Mosaic Industry Public Company Ltd.
