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Areeya Property PLC.
MD & A

1. General Information

The Company was founded in 2000. Later in 2003, the Company has transformed into a public limited company and registered its stocks in the stock market in 2004. In addition, the subsidiary (Areeya Service Co., Ltd.) has been formed to provide after-sale services for property with 99.99% ownership interest. In 2007, the Company has established a subsidiary company (One Up Co., Ltd.) with 64.99% ownership interest to provide construction services to Areeya's projects and outside customers. Subsequently 2008 the Company purchased 35% of the share capital of One Up from other shareholder. As a result, the Company's ownership interest increased to 99.99%. In addition, in the year 2008 the Company had formed 2 companies with 99.99% ownership interest which consisted of Areeya Management Co., Ltd. for development of real estate projects and to provide a management service for juristic person and Cool Space Co., Ltd. for development of real estate projects. And in the year 2009 the Company had formed a company with 99.99% ownership interest which consisted of White Living Co., Ltd. for development of real estate projects. Moreover, in the year 2010 the Company had formed a company with 99.99% ownership interest which consisted of Chill Space Co., Ltd. for development of real estate projects. Currently, in the year 2014, the Company has established Areeya Convenience Store Co., Ltd with 99.99% ownership for retail business.

The Company business is real estate development business: land for sale and house construction, which all are single house projects. Since 2005, the Company has started to sell the pre-built house and 3, 4-storey townhouse and additionally in 2006-2011 the Company has introduced two new products to the market. They are fully-furnished modern condominium and fully-furnished 2-storey townhouse.

In the year 2013, the company started business on Community Mall in Sukhumvit 77 was named "Pickadaily Bangkok". In the year 2015 , the company has opened the news project named "Life Style Club" in Kaset-nawamintr.

2. Overview Summary and Significant Change

On 26 March 2013, shareholders approve the issuance and offering for sale of all types of debentures, with and/or without a name registered, secured and/or unsecured debentures, with and/or without debentureholders representative, subordinated debentures and/or unsubordinated debentures, and perpetual and/or tenured depending on market conditions at the time of offering. The combined total amount not exceeding Baht 1.5 Billion by issuing either single or multiple offerings.

On 26 April 2013, the 2013 Annual General Meeting has approved the decrease in the Company's authorised share capital by Baht 191.6 million; from 949.6 Million Baht to 758 Million Baht by cancelling shares which are reserved for the exercising of warrants. The Company registered with the Ministry of Commerce on 10 May 2013.

On 14 June 2013, the Extraordinary General Meeting of the Company no.2/2013 has approved the increase in the Company's authorized share capital from 758 Million Baht to 980 Million Baht by issuing 222,000,000 new ordinary shares with a par value of Baht 1 each. The Company registered with the Ministry of Commerce on 27 June 2013 and registered the additional issued and paid-up share capital of 222 Million Baht (222 million ordinary shares at Baht 1 par value) with the Ministry of Commerce on 26 September 2013. Share premium amounted to 144.3 Million Baht.

On 20 August 2013, issuance and allotment of new ordinary shares to offer for sale to current shareholders in proportion to the number of shares already held by each shareholder

On 27 February 2014, the Extraordinary General Meeting of the Company no.1/2014 has approved the issuance and offering for sale of all types of debentures, with and/or without a name registered, secured and/or unsecured debentures, with and/or without debentureholders representative, subordinated debentures and/or unsubordinated debentures, and perpetual and/or tenured depending on market conditions at the time of offering. The combined total amount not exceeding 3 Billion Baht by issuing either single or multiple offerings.

On 10 September 2014, According to Board of Director ("BOD") Meeting No. 9/2014, has resolutions to register Areeya Convenience Store Co., Ltd. with registered, a subsidiary with a registered capital of one million baht in Thailand. This subsidiary operate the retail business.

On 26 February 2015, the Extraordinary General Meeting of the Company no.1/2015 has approved the issuance and offering for sale of all types of debentures, with and/or without a name registered, secured and/or unsecured debentures, with and/or without debentureholders representative, subordinated debentures and/or unsubordinated debentures, and perpetual and/or tenured depending on market conditions at the time of offering. The combined total amount not exceeding 2 Billion Baht by issuing either single or multiple offerings.

On 23 April 2013, the 2015 Annual General Meeting has approved the increase in the Company's authorised share capital by Baht 220 million; from 980 Million Baht to 1,200 Million, par value Baht 1 per share.

On 26 February 2016,the Extraordinary General Meeting of the Company no.1/2016 has approved the issuance and offering for sale of all types of debentures, with and/or without a name registered, secured and/or unsecured debentures, with and/or without debentureholders representative, subordinated debentures and/or unsubordinated debentures, and perpetual and/or tenured depending on market conditions at the time of offering. The combined total amount not exceeding 3 Billion Baht by issuing either single or multiple offerings.

As at 31 December 2015, the Company has 41 current projects and 2 community mall ,totally 43 projects as follows:

No. Project

Location

Type of Product
1. Areeya Bussaba Laoprao 130 Single Detached House
2. Areeya Sawana 3 Kaset-nawamintr Single Detached House
3. Areeya Metro Kaset-nawamintr Single Detached House
4. Areeya Como Bangna Bangna Single Detached House
5. The Village Chaengwattana-Tiwanon Chaengwattana-Tiwanon Single Detached House/Twinhome
6. Areeya Como Bangna Wongwan Bangna Single Detached House
7. Areeya Como Wongwan Ramintra Hathairath Single Detached House
8. The Village Cottage Kanjanapisek-Ratchapruek Sai Noi Single Detached House
9. At Home Kaset-nawamintr Townhouse
10. The Colors Chaengwattana-Tiwanon Chaengwattana-Tiwanon Townhouse
11. Areeya Mova Kaset-nawamintr Townhouse
12. Areeya ToBe Kaset-nawamintr Townhouse
13. Areeya Daily Kaset-nawamintr Townhouse
14. The Colors Premium Bangna Bangna Townhouse
15. The Colors Bangna K.M.10 Bangna Townhouse
16. The Village Bangna K.M.10 Bangna Townhouse
17. The Colors Leisure Bangna K.M.10 Bangna Townhouse
18. The Colors Leisure Bangna K.M.8 Bangna Townhouse
19. The Village Bangna K.M.8 Bangna Townhouse
20. The Colors Bangna Wongwan Bangna Townhouse
21. The Colors Premium Bangna Wongwan Bangna Townhouse
22. The Village Bangna Wongwan Bangna Townhouse
23. The Colors Premium Rangsit-Lumlukka Rangsit-Lumlukka Townhouse
24. Areeya Mandarina Sukhumvit 77 Sukhumvit 77 Townhouse
25. The Colors Donmuang-Songprapa Phase 1 Donmuang-Songprapa Townhouse
26. The Colors Donmuang-Songprapa Phase 2 Donmuang-Songprapa Townhouse
27. Areeya Brigg Donmuang-Songprapa Donmuang-Songprapa Townhouse
28. Areeya Mandarina Kaset-Nawamintr Kaset-nawamintr Townhouse
29. The Village Kanjanapisek-Ratchapruek Sai Noi Townhouse
30. The Colors Premium Kanjanapisek-Ratchapruek Sai Noi Townhouse
31. The Colors Kanjanapisek-Ratchapruek Sai Noi Townhouse
32. The Colors Premium Wongwan Ramintra Hathairath Townhouse
33. The Colors Wongwan Ramintra Hathairath Townhouse
34. a space Asoke-Ratchada Asoke-Ratchada Condominium
35. a space Kaset Kaset-nawamintr Condominium
36. a space Play Ratchada-Suttisan Ratchada-Suttisan Condominium
37. a space Sukhumvit 77 Sukhumvit 77 Condominium
38. a space ME Sukhumvit 77 Sukhumvit 77 Condominium
39. a space MEBangna Bangna Condominium
40. a space I.D. Asoke-Ratchada Asoke-Ratchada Condominium
41. a space Me Rattanathibet Rattanathibet Condominium
42. Pickadaily Bangkok Sukhumvit 77 Community Mall
43. Life Style Club Kaset-Nawamintr Community Mall

3. Previous Performance Results

  • Revenue and Cost
  • The company's revenues consist of revenue from sales of land and houses which are recognized upon full payment and the land title deeds and constructions had been transferred to the buyers. And service income on house constructions which are recognized in proportion to the stage of completion of the contract.

    Project Sales Transferred
    2015 2014 2013 2015 2014 2013
    Unit MB Unit MB Unit MB Unit MB Unit MB Unit MB
    Condo 354 566 152 264 711 1,303 631 762 37 46 13 33
    Single Detached house 134 616 11 112 - - 48 334 9 171 - -
    Townhouse / twin house 1,267 3,262 827 2,351 608 2,175 1,195 3,092 748 2,066 569 1,654
    Land - - - - - - 2 1,210 1 154 1 65
    Total 1,755 4,444 990 2,727 1,319 3,478 1,876 5,398 795 2,437 583 1,752
    % Increase from prior year 77% 63% -25% -22% 6% 48% 136% 122% 36% 39% -21% 0%

    Condominium In the year 2015, sales and revenue recognition of condominiums increased from year 2014 due to Condominiums are completed and ready to deliver two projects, total project value of 2,908 million Baht, revenue recognition of 762 million baht.

    In the year 2014, sales of condominiums decreased from year 2013 due to political still uncertain in the first to third quarter, The Company did not make as much as they should because they do not have confidence in the response of the condominium market. After that the political situation began to unravel in the fourth quarter, and the company began more confidence so we start preparing marketing plans to increase sales of condominium in the first quarter of 2015. Decrease in revenue recognition of year 2014 and 2013 according to the main projects under construction. However, the Company speed up the construction in order to recognize the revenue in the year 2015. During the year 2014, there were 2 condominium projects under construction which is expected to transfer in the second quarter of the year 2015. The total projects value of such 2 condominium were 2,763 Million Baht and the amount of backlog was Baht 830 Million as at 31 December 2014 or 70% of the total project value.

    Townhouse Townhouse is the main product of the Company and the main target of townhouse project is people with low to medium income level. As at 31 December 2015, there were 25 townhouse projects with total project value of 13,149 Million Baht or 4,706 units, which included 9 new projects opened in the year 2015, altogether contributed the total project value of 2,976 Million Baht and total revenue recognition amounting to 3,092 Million Baht in the year 2015.

    Single Detached House the Company has launched new single detached house and recognized revenue in 2014 amounting to Baht 87 Million or 25% of total project value. The main target of single detached house project is middle to high income families. Moreover, The Company has launched 2 project with total project value of 1,248 Million Baht and the amount of backlog was Baht 68 Million and total revenue recognition amounting to 334 Million Baht in the year 2015.

  • Cost of sale of real estate
  • For the year 2015, Cost of sale of real estate increased from that of the year 2014 and 2013 as a leap because of revenue recognition for the company's rapid growth. In the second quarter, rise of construction cost around 1 percent of total project value. In this regards, the quality of construction materials is higher in accordance with the material prices in order to deliver high quality products to customers and to be competitive. The company spend much money for construction cost but still maintain the same selling price.

  • Gross Profit Margin
  • The Company had gross profit margin of 1,381.29 Million Baht in 2015, 805.48 Million Baht in 2014 and 662.75 Million Baht in 2013, which were 25.61, 32.58 and 37.82 percent of property sales respectively. Decrease in gross profit margin as a result of increased costs but in the meantime adjustment higher selling price, resulting to decreased gross profit margin rate was less than increased construction cost rate. The Company expected to maintain gross profit margin in the next year not less than gross profit margin in the year 2015.

  • Unrealized Gain (loss) in Fair Value on Investment Properties
  • In 2015, the Company had unrealized loss in fair value on investment properties of 25.85 Million Baht.

    The Company presented investment properties in fair value which were appraised by the independent property valuers in the basis of income approach as addressed in the appraisal report dated 30 December 2015

    In 2014, the Company had unrealized gain in fair value on investment properties of 62.6 Million Baht. Such investment properties are shopping mall having space for rent in Sukhumvit area. The Company presented investment properties in fair value which were appraised by the independent property valuers in the basis of income approach. The Assumption for appraisal consists of space rental rate, rate of rent increase, discount rate, and the rate of return. The rest is revenue from rental and service in relation to investment properties and other income of the company.

  • Selling Expenses
  • Type Transfer
    2015 2014 2013
    MB Transfer % Transfer MB Transfer % Transfer MB Transfer % Transfer
    Selling Expenses 535.84 5,398.02 9.93% 320.38 2,437.56 13.14% 304.37 1,752.48 17.37%
    % Increase (Decrease) 215.48   67.25% 16.01   5.26%      

    The main Selling Expenses's Company and its subsidiaries is consist of advertising, public relation, marketing costs, transfer fees, specific business tax and other expenses. As table above, selling expenses was in line with the revenue recognition from the sale of real estate especially transfer fees and specific business tax.

    Advertising, public relations and other marketing expenses decreased 3.00 percent due to the company focus marketing expenses only Low-rise projects which Moreover, the Company could control and manage selling and marketing expense as specialist in property market and products. In the year 2015, there is Selling Expenses increased from prior year to increase from the transfer of 2 condominium projects which will be relating to sales and revenue recognition.

  • Administrative expenses
  • Type Transfer
    2015 2014 2013
    MB Transfer % Transfer MB Transfer % Transfer MB Transfer % Transfer
    Administrative expenses 436.04 5,398.02 8.08% 393.58 2,437.56 16.15% 287.76 1,752.48 16.42%
    % Increase (Decrease) 42.46   10.79% 105.82   36.77%      

    This presents the rate of administrative expenses decreased from year 2014 and 2013 as the Company had a plan for the increasing sales since the year 2013.

  • Finance costs
  • Financial cost was in amount of 166.34 Million Baht in the year 2015, 145.05 Million Baht in the year 2014 and 91.39 Million Baht in the year 2013 which were 3.08, 5.95 and 5.21 percent of total revenue respectively. Due to the fact that the Company had provided increase external financial sources from debentures and bill of exchange and so the Company had financial cost increased. Regarding to such sources of fund, the Company could realize the part of financial cost for the cost of real estate projects approximately the percentage of 60 to debentures while the amount of debentures were 2,000 Million Baht in the year 2015, 3,000 Million Baht in the year 2014 and 1,500 Million Baht in the year 2013 (and redeemed before maturity date of 989 million baht in the year 2014).

  • Net Profit
  • For the year 2015, the Company reported net profit of 216.69 million Baht, increased 425.05 percent from 41.27 million Baht in the year 2014. The main factor was the increase in revenue of real estate at 121.45 percent.

    For the year 2014, the Company and its subsidiaries reported net profit of 41.27 Million Baht which increased 199.49 percent from 13.78 Million Baht in the year 2013 with the net profit margin of 1.61 percent of total revenue. The main factor was the revenue from real estate projects, other income and unrealized gain in fair value on investment properties together with increase of selling and administrative expenses and financial cost at 25.66 percent whereas in the year 2014, gross profit margin was at 33.04 percent, net profit margin at 2.22 percent of total revenue. An effective corporate income tax expense was at 27.30 percent of earning before corporate income tax.

    According to the Company's operation as mentioned above, considering profitability ratio in 2015, 2014 and 2013, the Company had gross profit margin at 25.61, 33.58 and 37.82 percent respective, net profit at 4.00, 1.61 and 0.76 percent respectively and return on equity at 16.64, 1.44 and 0.51 percent, respectively.

    Important factors which may result to the operation in the future

    The real estate market has started aggressive since year 2012 onwards. In the year 2013, because there are many positive factors such as flat interest rate, the Government accelerated push big projects (such as rapid transit system, flood protection, high-speed railway project.).

    But the fourth quarter of 2013 the country has political instability. So the consumers delay their decision making on buying property which from that factor makes the slowdown in property market of year 2014 seems unavoidable. But when the political unravel, the economy situations are improving with a return of consumer confidence, the real estate market finally will be back to normal.

    Low-rise real estate direction tend to grow well due to the change of new families' behavior, the expansion of public transportation and more stability of public situation. However, foreign financial crisis may result to the price of construction materials as well. Demand of single detached house and townhome still perform better in line with an increase of the low-rise projects transferred.

    Regarding condominium projects, there was the slightly growth mostly around sky train and subway areas, presenting the higher price in BTS and metro lines than that of condominium around Bangkok metropolitan region. Nevertheless, demand of condominium around shopping malls and community is quite due to the expansion of department store to Bangkok metropolitan area and so the selling price of condominium projects in such area is not quite high, which also attract customers.

    The Company focus on the location near community and shopping mall with reasonable price which customer can afford.

4. Financial position

  1. Assets

  2.   2015 2014 2013
    Total assets (Million Baht) 12,861.19 11,956.52 8,988.15
    Increase from the previous year (Million Baht) 904.67 2,968.37 2,202.9
    Percentage 7.57 33.02 32.5
    Real estate projects under development (Million Baht) 10,930.65 9,841.68 6,931.78
    Increase from the previous year (Million Baht) 1,088.97 2,909.90 1,158.1
    Percentage 11.06 41.98 20.1

    An increased assets in 2015 to 2013 was mainly from an increase of Real estate projects under development

    In the year 2015, Increase in Real estate projects under development because of launched the new projects in the area Kanjanapisek-Ratchapruek (Soi noi), Wongwan Ramintra, Wongwan Ratchapruek (Bangbuathong), and expansion in Bangna. Furthermore, The Company also is accelerating condo two projects in the area Sukhumvit and Bangna zone to increase revenue recognition in Quarter 3 and 4 of 2015. Now, the two projects were completed and have been gradually transferred to customers during the period.

    In the year 2014, Increase in Real estate projects under development is acquired land amounting to 1,600 Million Baht for development and transfer in 2015 at Sukhumvit 77, Bangbuatong, Sai Noi, expansion in Bangna and Rattanathibet area while in 2013, Land acquisition was for development at Sukhumvit 77, Donmuang-Songprapa and Bangna area. The rest was the construction cost for low-rise projects ready to presale in 2015 amount to 3 projects which mostly completed in the year 2014 and will be transferred in the year 2015 as well as the construction cost of 3 condominium which 2 projects consumed the construction cost approximately 637.0 Million Baht and ready to transfer and recognize revenue in the year 201 while the other project was under construction around 77.5 percent, costly 2,141.1 Million Baht.

    Cash and Cash Equivalent

    • Cash flow as during 2015 to 2013 as follows.

    •   2015 2014 2013
      Cash flow from operating activity before changing of operating assets
      and liabilities
      508.59 1,818.62 1,225.55
      Changing of operating assets and liabilities -450.39 -3,545.95 -2,754.49
      Corporate income tax -60.34 -23.95 -15.64
      Net cash provided by (used in) operating activities -2.14 -1,750.28 -1,544.58
      Net cash provided by (used in) investing activities -3.57 -286.29 -230.82
      Net cash provided by (used in) financing activities 90.63 2,149.25 1,659.01
      Cash and cash equivalent increase/ -decrease 84.92 112.68 -116.39
      Cash and cash equivalent at the beginning of the year 220.89 108.21 224.60
      Cash and cash equivalent at the end of the year 305.81 220.89 108.21

      As at 31 December 2015, cash and cash equivalent increased from that of the year 2014 by 84.92 Million Baht mainly from increase of cash flow from financing activities by 90.63 Million Baht. As a result of the Company received from the issuance of debentures of Baht 2,000 million in the year 2015, which objective for issue debentures is for repayment all or partially short-term bills of exchange.

      As at 31 December 2014, cash and cash equivalent increased from that of the year 2013 by 112.68 Million Baht mainly from an increase of Cash flow from operating activity before changing of operating assets and liabilities by 593.07 Million Baht while the Company invested in real estate projects under development amounting to 800 Million Baht, partly from an increase of cash flow from financing activities.

    • Deposits for Land

    •   2015 2014 2013
      Deposits for Land (Million Baht) 80.0 347.0 742.0
      Increase/-decrease from the previous year -267.0 -395. 0 700.1

      Decrease in Deposits for land as at 31 December 2015 was 267.00 Million Baht from year 2014 due to The Company has transferred the land in the area expansion in Bangna, Wongwan-Ratchapruek (Bangbuathong), and expansion in Kanjanapisek-Ratchapruek.

      Decrease in Deposits for land as at 31 December 2014 was 395 Million Baht from year 2013 due to there was land acquisition in the year 2014 from the deposit in the year 2013 and new deposits for new projects in the future to support expansion of sales. Increase in Deposits for land as at 31 December 2013 because of deposit for new land 4 location in the year 2013, which mostly transferred in the year 2014 and the rest will be transferred in the year 2015.

    • Investment properties

    •   2014 2013 2012
      Investment properties(Million Baht) 535.23 510.20 422.26
      Increase/-decrease from the previous year 25.03 87.94 140.8

      As at 31 December 2015, The Company had an investment properties of 535.23 million baht which increased from that of the year 2014 by 25.0 million baht or 4.91 percent due to the increase in construction in the community at Kasetnawamintr named "Life Style Club"

      As at 31 December 2014, The Company had an investment properties of 510.20 million baht which increased from that of the year 2013 by 87.94 million baht or 20.83 percent because of increase in unrealized gain on investment properties of 62.62 million baht and construction cost in the period for 2 community mall of 25.32 million baht.

      In the current period, investment properties named "Pickadaily Bangkok" has been completed. Such investment properties is a shopping center by dividing the space for rent.

      The investment properties have been presented under fair value method. The fair value has been determined based on valuation performed by an accredited independent valuer, using the income approach as addressed in the appraisal report dated 30 December 2015. The valuation technique used in measuring the fair value of investment properties as rental rate, rental growth rate, Risk-adjusted discount rates, and the rental yield.

    • Property, plant and equipment

    •   2015 2014 2013
      Property, plant and equipment 411.24 400.01 377.24
      Increase/-decrease from the previous year 11.23 22.83 163.1

      Increase in Property, plant and equipment in the year 2015 because of investment in Aluminum form work for construction process both townhouse, twin house and condominium upon expansion projects increased. However, Aluminum forms can be used throughout the year 2016 and partially replacement such machine and additional cost for uncompleted head office building. Increase in Property, plant and equipment in the year 2013 because of construction cost of head office building.

      On 28 March 2013,the Board of Directors Meeting has approved the Company (the "Leasee") entered into a land lease agreement ( "Leased Property") with two directors ("the lessor") to build a head office building , for a period of 10 years from the date of land lease registration.

      Now, the Company and lessor has conclusion that the lessor and the Leasee agreed to extend the lease for another 10 years. As for pricing, the rental rates in the 11 to 20 year lease agreement on the new rate at market price or other appropriate price. If the Company agrees to extend the agreement, the Company must submit written notice in advance as stipulated in the memorandum. Upon the expiry of the lease term of this agreement, or any extension thereof, or upon termination of the agreement due to the fault of the Company, the Company must return the leased asset to the lessor in the same condition as before the lease commenced. The Company must demolish all assets on the leased asset, if not the ownership of assets will be transferred to the lessor without any cost. If the lessor does not intend to receive the assets, the Company has the obligation to pay for any cost, such as demolition cost as stipulated in the memorandum.

      Consent to renew the lease for another 10 years, this intended to provide clarity and interest of the Company and its shareholders. However, the amendment to the terms of the lease and duration of the lease agreements have no significant impact on the financial statements of the Company. The figure in the Statements of comprehensive income, Statements of financial position, and Statements of changes in equity for the fiscal year 2013 to 2015 is stable. Change in net building from 153.41 million baht and 161.96 million baht to present Building on lease land. Such reclassify transaction has consulted with the certified public accountant (CPA). As at 31 December 2015 and 2014, total assets was 12,861.19 million baht and 11,956.52 million baht.

      However, Building on lease land will be presented as prepaid rental expenses - Building on lease land as same balance. The depreciation expense - Building on lease land in note financial statement is revised name "rental expenses", which such transaction is presented administrative expenses. The figure in Statements of comprehensive income for the year ended 31 December, 2015 is recorded amortized expenses - Building on lease land amounting 8.55 million baht and 7.20 million baht for the year ended December 31, 2015 and 2014 respectively. Disclosure in the notes to the financial statements no.14, Depreciation, If the amendment is rental expense, The total amount of depreciation and amortization will be reduced by the amount of Baht 50.13 million to Baht 41.58 million as at 31 December 2015 and the total number is down from 40.22 million to Baht 33.02 million baht as at December 31, 2014 decreased by improving (Reclassify) the amortization of rights to use the property as a rental fee of 8.55 million baht and 7.2 million baht respectively.

      For the Statements of financial position for the year ended December 31, 2015 and 2014 have been reclassified to Building on lease land as table below;

        2015 2014
      Building on lease land 153.41 161.96
      Increase/-decrease from the previous year -8.5  

    • The adequacy of the provision and allowance for doubtful accounts.
    • The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred.

    • The ratio shows the efficiency of major operations.
    • Return on assets of the Company for the year 2015, 2014 and 2013 was 3.53, 0.39 and 1.47 percent, respectively due to the Company had net profit in the year 2015 more than 2014 by 425.05 percent. As a result, the return on assets improved to the order.

      The Company had sales of year ended 2013 to recognize revenue in the first half of 2014, although the economy of the real estate market during the first half of the year 2014 will be in the slowdown including political opposition and economic uncertainty. As a result, the consumers postpone purchasing power.

  3. Liabilities and sources of financing.

  4.   2015 2014 2013
    Total liabilities 9,770.87 9,082.89 6,129.36
    Increase/-decrease from the previous year 687.98 2,953.53 1,763.18
    Bank overdrafts and short-term loans from financial institutions 1,610.31 2,159.07 1,222.68
    Current portion of long-term loans from financial institutions 692.29 1,648.67 753.94
    Long-term loans from financial institutions, net current portion 1,509.35 - -
    Debentures 932.62 792.34 2,024.49
    Total liabilities 3,996.60 3,511.0 1,500.0

    As at 31 December 2015, Total liabilities increased from the year 2014 by 687.98 million baht mainly from issuing bond of amount 2,000 million baht. However, the Company repaid bank loans for the project rather than drawdown from bank loan of 816.1 million baht from the revenues from the sale of real estate more than year 2014. Meanwhile, the company has used proceeds from the issuance of bonds to pay shortterm bills of exchange. As a result, short-term bills of decreased of 548.76 million baht.

    Total liabilities as at 31 December 2014 increased mainly from an increase of the debentures of 2,011 Million Baht, bill of exchange and trades payable amounting to 1,034.70 Million Baht and decrease of loans from financial institution of 337.40 Million Baht.

    • Bank overdrafts and shortterm loans from financial institutions
    • As at 31 December 2015, Bank overdrafts and short-term loans from financial institutions decreased from that of the year 2014 by 548.76 million Baht or 25.42 percent because of increase in revenue from sale of real estate. Moreover, in April and October 2015, the Company issued debentures of Baht 2,000 million which objective for issue debentures is for repayment all or partially short-term bills of exchange.

      As at 31 December 2014, Bank overdrafts and short-term loans from financial institutions increased from that of the year 2014 by 936.39 million Baht or 76.58 percent as same year 2013 which increased by 259.80 million baht due to The company has access a new sources of funding such as short-term bills of exchange and issuing bond to effect decreasing long-term loans from financial institutions. Because short-term bills of exchange and bond had interest rates lower than loans from financial institutions and no guarantees.

    • Long-term loans from financial institutions
    • As at 31 December 2015, Long-term loans from financial institutions decreased from that of the year 2014 by 816.1 million Baht or 33.43 percent because of increase in revenue from sale of real estate.

      Moreover, in April and October 2015, the Company issued debentures of Baht 2,000 million which objective for issue debentures is for repayment all or partially short-term bills of exchange and using source of fund to reduce draw down long-term loans from financial institutions.

      As at 31 December 2014, Long-term loans from financial institutions decreased from that of the year 2014 by 337.42 million Baht or 12.14 percent due to the Company issued debentures of Baht 3,000 million in the year 2014 to reduce draw down long-term loans from financial institutions because bond had interest rates lower than loans from financial institutions and no guarantees same as year 2013.

    • Debentures
    • As at 31 December 2015, the Company had debenture 5,505.95 million baht which increased from the year 2014 by 1,994.95 million baht or 56.82 percent. On 26 February 2015, the Extraordinary Shareholders' Meeting approved the issuance and offering of all types of debentures, with and/or without a name registered, secured and/or unsecured debentures, with and/or without debenture holders representative, subordinated debentures and/or unsubordinated debentures, and perpetual and/or tenured depending on market conditions at the time of offering. The combined total amount not exceeding Baht 2.0 Billion by issuing either single or multiple offerings. The Company issued debentures two times during the year 2015.

      As at 31 December 2014, the Company issued debentures of 3,511.00 Million Baht which increased from the issuance of 2,011.00 Million Baht debentures in the year 2013 which increased 134.07 percent. According to the Shareholders' Extraordinary General Meeting No.1/2014. The resolution is to approve the issuance and offering of all types of debentures, with and/or without a name registered, secured and/or unsecured debentures, with and/or without debenture holder's representative, subordinated debentures and/or unsubordinated debentures, and perpetual and/or tenured depending on market conditions at the time of offering. The combined total amount not exceeding Baht 3.0 Billion by issuing either single or multiple offerings. The Company issued debentures two times during the year 2014.

    • Short-term Bill of exchange

    •   2015 2014 2013
      short-term Bill of exchange 1,280.54 1,596.81 954.16
      Increase/-decrease from the previous year -316.27 642.65 3.44

      As at 31 December 2015, Decrease in short-term bill of exchange by 316.27 Million Baht or 19.81 percent from year 2014 due to the Company has issued debentures of Baht 2,000.00 million for repayment all or partially of bank overdrafts, short-term loans and loans from the financial institutions.

      As at 31 December 2014, Increase in short-term bill of exchange by 642.65 Million Baht or 67.35 percent from year 2014 due to the company loan to invest development cost both low-rise and high-rise product for supporting revenue recognition upcoming in year 2015 and future. Furthermore, short-term bills of exchange had interest rates lower than loans from financial institutions and no guarantees.

    • Equity
    • As at 31 December 2015, the shareholders Equity of the Company was amount 3,090.32 million baht which the shareholders Equity increased from year 2014 of amount 216.69 million baht and no dividend payment for the year 2014.

      As at 31 December 2014, the shareholders Equity of the Company was amount 2,873.63 million baht which the shareholders Equity increased from year 2013 of amount 44.25 million baht which Shareholders' equity decreased by the dividend payment of 29.39 million baht.

    • Liquidity

    •   2015 2014 2013
      Cash flow from operating activities before changing of operating assets and liabilities 508.59 1,818.6 1,225.6
      Changing of operating assets and liabilities -450.39 -3,545.95 -2,754.49
      Corporate income tax -60.34 -23.95 -15.64
      Net cash provided by (used in) operating activities -2.14 -1,750.28 -1,544.58

      Cash flow from operation activities was mainly used for real estate project under development especially during political situation is becoming stable, resulting to backlog for low-rise and high-rise projects of 536 million baht and 1,625 million baht ,respectively.

        2015 2014 2013
      Net cash provided by (used in) investing activities -3.57 -286.29 -230.82

      Cash flow from investing activities in 2014 was mainly used for property, building and equipment i.e. head office building and paid for aluminum forms for both low-rise and high-rise projects which can be used more than 3 years by partially replacement due to the company is prepared to invest in property, plant and equipment and aluminum form in the year 2013 and 2014 to effect cash flow to investing activities only 3.57 million baht.

        2015 2014 2013
      Net cash provided by (used in) financing activities 90.63 2,149.25 1,659.01

      Cash flow from financing activities in 2015 was mainly provided from issuance of debentures and mainly used for payment of debentures amounting to 2,000 million baht. Regarding long-term loan from financial institution, loan repayment was approximately 816.1 million baht and repayment short-term Bill of exchange and finance cost of 548.76 million baht and 486.05 million baht, respectively.

      Cash flow from financing activities in 2014 was mainly provided from issuance of debentures and mainly used for payment of debentures amounting to 2,011 Million Baht. Regarding long-term loan from financial institution, loan repayment was approximately 337.4 Million Baht while cash outflow for loan repayment is from bill of exchange to save interest.

    • Liquidity ratio
    • As at 31 December 2015, Liquidity ration of the Company was amount of 2.44 times by increase 0.13 times from the year 2014. In the year 2014, Liquidity ration of the Company was amount of 2.31 times by decrease 0.99 times from the year 2013.

      Quick ratio in the period, was amount of 0.09, 0.13 and 0.37 times, respectively.

      Account payable Turnover ratio in the period, was amount of 15.91, 10.45 and 11.92 times, respectively.

    • Financial Policy Ratio
    • Maintenance debt to equity ratio

      The Company's Debt-to-Equity ratio as of 31 December 2015 was amount 3.16 times same as year 2014. An increase of debt-to-equity ratio was in line with the value of real estate projects under development. As at 31 December 2015, the company had real estate projects under development no delivery of 2,161 million baht which revenue will be recognized in the year 2016 onwards and inventories to be sold of 9,770 million baht. Once the transfer is made, then the ratio of debt to equity declined.

      In issuance bonds no.1/2013 that maturity date is in the year 2016. In issuance bonds no.1/2014 that maturity date is in the year 2017. In issuance bonds no.2/2014 that maturity date is in the year 2017 or early redemption. In issuance bonds no.1/2015 that maturity date is in the year 2016 and issuance bonds no.2/2015 that maturity date is in the year 2018 or early redemption. The Company is required to maintain Net Debt to Equity Ratio at a ratio of not more than 3:1 on consolidated financial statement at the end of the fiscal quarter or fiscal year upon the terms of each series of such debentures.

      As at 31 December 2015, the company continued to maintain Net Debt to Equity Ratio of 2.83 times, which is still subject to the terms of the debentures.

CALL.1797
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