November 14, 2007
Subject : Clarification of Operating Results of the Company and
Subsidiaries for the 3rd 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
September 30, 2007 which were reviewed by certified auditor. The results of
operating in Q3/2007 compared to those in Q3/2006 are as followings:
(Unit : million baht) 3rd Quarter Change Increase / (Decrease)
2007 2006 Million baht percent
Sales Revenues 565.38 606.06 (40.67) (7%)
Net profit (Loss) (28.32) (14.93) (13.40) (90%)
The significant changes of operating result are as follows:
1.Revenue from sales in Q3/2007 was decreased from that of Q3/2006,
which due to a decrease in sales volume in the slowing-down market. However,
our policy in product development to increase product value is on going in
order to increase profit margin in the future.
2.Selling and administrative expenses in Q3/2007 were baht 82.84 million
which a decrease of baht 7 million or 8 percent compared to those in Q3/2006,
which was due to lower delivery expenses from lower sales volume and the
company's policy to reduce sales and marketing expenses.
3.Interest expense in Q3/2007 was baht 16.50 million, decreased by baht
7.83 million or 32 percent from that in Q3/2006, due to lower interest rate
and repayment of long-term debt. As of September 30, 2007, the company's
outstanding balance of long-term debt was baht 654 million, which was
decreased by baht 152 million compared to that as of September 30, 2006.
4.Other revenues in Q3/2007 was baht 5.18 million, decreased from baht
23.47 million or 78 percent of Q3/2006. The change affected total revenues
decreased by 9 percent higher than a decrease of sales revenues.
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 Q3/2007, the consolidated statement reported a net loss of baht 28.32
million, while separate financial statements showed a net loss of baht
27.31 million. As at September 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
Q3/2006 decreased by baht 1.84 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.
