The Company runs a retail trading for diamonds and diamond ornaments which is a business with high competition among a number of small enterprises, but such goods are return high profit per unit while the rate of preliminary profit of goods in same type might be different depending on values of raw materials at manufacturing process, and the Company shall dictate pricing with discount of such goods. The procurement services for products of the Company shall be classified into two main processes as the supplying for diamond as a readymade commodity and raw material, and then hiring a manufacturer to produce designated ornament. Such process of business is similar with an order of purchasing from manufacturer to distribute; therefore the Company shall be able to avoid bearing of costs of investment in permanent assets. While it can spend more investment on current capital for purchasing and collection of products for sales, since they need to be variety in forms and designs responding to diverse buyers. One of the success factors for this business thus relies on management of inventory and liquidity management with efficiency.

The retail trading for diamonds and diamond ornaments shall set up initial selling price, in very high level, while volume of sales in each time shall not be high, comparing with manufacturing and exporting of ornaments and decorations, therefore the Company focuses on huge groups of clients with continual expansion of coverage for create more net profits, in additional the Company steadfastly set up branches in provinces countrywide with retain of adequate stocks in each branch responding to diversity of demanding. Several means for management of inventory with more efficiency are introduced and applied for cost-effectiveness with value-adding in stocking of products, while the security management with insurance has been activated upon risk management and preventive measures from robbery and corruption.

The Company holds two main types of products as: 1) ornaments and decorations; and 2) diamond in carat, and of course, ornaments and decorations might create more values with gain of higher profits rather than diamond in carat, while some pieces of ornaments and decorations shall earn more profits than other pieces.

In 2014, the company’s total turnover increased 15.96 percent compared to the previous year or approximately 233.54 million baht. The increase of total turnover by14.55 percent was due to the growth of existing branches of the Company and 1.4 percent was due to the opening of new branches, increasing from 108 units to be 116 units.

And although in the year 2014, the overall economy was declined with deceleration because of the economic turndown created more psychological impacts on purchasing power, nonetheless the executive body of the Company still reaffirmed and believed that the jewelry business sector was fast moving with positive tendency. Reference to marketing survey on ornaments and decorations of the Company, the executive body had forecasted with estimation that the Company shall hold market share around 14 percent of market value in a counter group, or in equivalent with 2 percent of value from overall market, while it shall be gradually increased with extension of service coverage from building of department stores in provinces, e.g. the Tesco Lotus, countrywide. The Company had established a strong relationship with two prominent department stores and asked for a favor with priority for selection of selling areas, while according to marketing analysis; consumers’ behaviors in upcountry were gradually changed in similarity with those residing in Bangkok and mega cities with increase of purchasing power.

In 2015, the company’s total turnover decreased 12.27 percent compared to the previous year or approximately 207.96 million baht. The decrease of total turnover 17.91 percent was due to the economic slowdown especially in the first 9 month of 2015 and improved in Q4, 2015 from the government's stimulus policies.

In 2016, the company’s total turnover decreased 7.23 percent compared to the previous year or approximately 107.50 million baht due to the decreasing in same store sales of the company by 7.82 percent which affected by the delay of purchase from some segment of consumers in Bangkok and the suburbs in the first 2 quarters and in October and November 2016 as affected by the important event in the country.

In 2014, the Company had a net profit of 204.55 million baht, while in same period of previous year net profit was 202.80 million baht or increase by 0.86 percent due to the increase of revenue from sales of 15.96 percent or 233.32 million baht and the increase of selling and administrative expenses ratio when compared to the same period of previous year.

In 2015, the Company had a net profit of 131.12 million baht, while in same period of previous year net profit was 204.55 million baht or decrease 35.90 percent due to the revenue from sales decreased of 12.27 percent or 207.96 million baht which affected by the economic and the postpone of purchase by the consumers in the first 9 months of 2015.

In 2016, the Company had net profit of 157.28 million baht, increased from year 2015 of Baht 131.12 million or 19.95 percent. The major reasons of the increase were mainly due to the improvement of the inventory management, particularly for the main raw material cost, the management of sales mix in each product category efficiently of which resulted to the increase in gross profit margin from 40.05 percent in 2015 to 44.06 percent in 2016, though the revenue from sales decreased from 1,487.50 million baht in 2015 to 1,380.00 million baht in 2016. In addition, the Company controlled on the selling and administrative expenses in 2016 which resulted to a decrease in these kinds of expenses by 20.50 million baht.

The company’s total assets as of 31 December 2014 was 1,113.15 million baht which comprised cash and cash equivalents of 29.74 million baht, short term investment of 152.50 million baht, trade and other receivables of 95.45 million baht, and inventory of 694.79 million baht. The major reasons of decrease were due mainly to a decrease in cash and cash equivalents by 20.19 million baht from the cash and cash equivalents as of 31 December 2013 of 49.93 million baht; the Company used this cash and cash equivalents for the purchase of inventory while the inventory increase from 565.48 million baht in previous year to 694.79 million baht as of 31 December 2014. Moreover, the number of branches increased from 108 branches in 2013 to 116 branches in 2014 and the Company had a policy to expand the new branches and improve the image of the counter of the existing branches.

The company’s total liabilities as of 31 December 2014 was 404.07 million baht which mainly comprised trade and other payables of 332.58 million baht. The major reasons of increase were due mainly to an increase in trade and other payables by 63.35 million baht from trade and other payables 269.23 million baht in previous year which resulted to an increase of raw material purchase at the end of the year as compared to last year; and an increase in current liabilities by 16.31 million baht from the deposits received in advance from customers which the products will be delivered to the customers in 2015.

Shareholders’ equity as of 31 December 2014 was 709.09 million baht which comprised paid-up share capital of 174.27 million baht, premium on share capital of 92.27 million baht and unappropriated retained earnings of 425.05 million baht. The shareholders’ equity as of 31 December 2014 increased from previous year by 83.13 million baht which was due to an increase in comprehensive income of 205.12 million baht, offset with the dividend payment of 121.99 million baht.

The company’s total assets as of 31 December 2015 was 1,034.28 million baht which comprised cash and cash equivalents of 43.42 million baht, short-term investment of 147.64 million baht and trade and other receivables of 99.90 million baht, and inventory of 601.22 million baht. The major reasons of decrease were due mainly to a decrease in inventory from 694.79 in previous year to 601.22 million baht which resulted from an increase in efficiency of inventory management.

The company’s total liabilities as of 31 December 2015 was 329.79 million baht which mainly comprised trade and other payables of 212.02 million baht, long-term loan from financial institution of 46.91 million baht. The major reasons of decrease were due mainly to a decrease in trade and other payables from 332.58 million baht in previous year to 212.02 million baht as of 31 December 2015, which resulted from a normal payment of debt; offset with the increase in long-term loan from financial institution of 46.91 million baht.

Shareholders’ equity as of 31 December 2015 was 704.49 million baht which comprised paid-up share capital of 174.27 million baht, premium on share capital of 92.27 million baht and unappropriated retained earnings of 420.45 million baht. The shareholders’ equity as of 31 December 2015 decreased from previous year by 4.60 million baht which was due to an increase in comprehensive income of 129.59 million baht, offset with the dividend payment of 134.19 million baht.

The company’s total assets as of 31 December 2016 was 1,044.60 million baht which comprised cash and cash equivalents of 29.58 million baht, short term investment of 173.84 million baht, trade and other receivables of 146.78 million baht, and inventory of 558.60 million baht. The major change in total assets was mainly from inventory which decreased from 601.22 million baht in previous year to 558.60 million baht due to an increase in efficiency of inventory management.

The company’s total liabilities as of 31 December 2016 was 269.32 million baht which mainly comprised trade and other payables of 163.24 million baht, long-term loan from financial institution of 34.95 million baht. The major reason of decrease was due mainly to a decrease in trade and other payables from 212.02 million baht in previous year to 163.24 million baht as of 31 December 2016 from the normal payment of the company.

Shareholders’ equity as of 31 December 2016 was 775.28 million baht which comprised paid-up share capital of 174.27 million baht, premium on share capital of 92.27 million baht and inappropriate retained earnings of 491.24 million baht. The shareholders’ equity as of 31 December 2016 was increased from previous year of 70.79 million baht due to an increase in comprehensive income of 157.93 million baht, offset with the dividend payment of 87.13 million baht.

Revenue

In 2014, 2015 and 2016, the company revenues were 1,695.46, million baht 1,487.50 million baht and 1,380.00 million baht, respectively. The revenues shall be classified in each type of products as follows:

(Unit : Million Baht)
Type of Income from Sales/Services 2014 2015 2016
Million Baht Percent Million Baht Percent Million Baht Percent
1. Diamond Jewelry 1,496.18 88.24 1,309.24 88.02 1,233.20 89.36
2. Carat Diamond 190.87 11.26 171.10 11.50 140.96 10.21
3. Service Fee 8.41 0.50 7.16 0.48 5.84 0.43
  Total Revenue 1,695.46 100.00 1,487.50 100.00 1,380.00 100.00

In 2014, the company’s revenue was 1,695.46 million baht. Revenue from sales of diamond jewelry increased from previous year by 11.59 percent due to the new launch of products responding to the demands of customers. Revenue from sales of carat diamond increased from previous year by 63.93 percent due to an increase in domestic consumption and customer demand in 2014 and the impact from the political crisis in 2013 which resulted to the sales of carat diamond not meet the target of 2013; hence, the Company imported more carat diamond to respond to the customers’

In 2015, the company’s revenue was 1,487.50 million baht. Revenue from sales of diamond jewelry was decreased from previous year by 12.49 percent and revenue from sales of carat diamond was decreased from previous year by 10.36 percent due to the economic crisis and the postpone of purchase from some segment of consumers for the first 9 months of the year.

In 2016, the company’s revenue was 1,380.00 million baht. Revenue from sales of diamond jewelry was decreased from previous year by 5.81 percent and revenue from sales of carat diamond was decreased from previous year by 17.62 percent due to the postpone of purchase from some segment of consumers in Bangkok and the suburbs in the first 2 quarters and in October and November 2016 as affected by the important event in the country.

The revenues shall be classified in each channel of distributions as follows:

(Unit : Million Baht)
Channel for Distribution 2014 2015 2016
Amount Percent Growth Amount Percent Growth Amount Percent Growth
1. Branches                  
1. Department store 522.50 30.82 24.56 457.13 30.73 (12.51) 366.73 26.57 (19.78)
2. Plaza and others 1,172.96 69.18 12.49 1,030.37 69.27 (12.16) 1,013.27 73.43 (1.66)
  Total 1,695.46 100.00 15.96 1,487.50 100.00 (12.27) 1,380.00 100.00 (7.23)
Note: excluded service fee and other income

The revenue proportion from sales of the Company in Bangkok and upcountry was significantly changed due to more business expansion in the upcountry. The values and ratio of revenues from sales of the Company from 2014 to 2016 shall be presented as follows:

Channel for Distribution 2014 2015 2016
Amount Percent Amount Percent Amount Percent
Bangkok 891.96 52.61 851.64 57.25 693.84 50.28
Upcountry 803.50 47.39 635.86 42.75 686.16 49.72
Grand total 1,695.46 100.00 1,487.50 100.00 1,380.00 100.00
Note: excluded service fee and other income

Other incomes which came from service fee of cleaning or resizing from 2014-2016 shall be presented as follows:

(Unit : Million Baht)
Other Income 2013 2014 2015
Interest income 0.27 0.07 0.26
Gain on short term investment 2.92 1.62 1.69
Others 1.22 2.29 1.51
Total 4.41 3.98 3.46

Cost of Sales and Gross Profit Margin

The company’s cost of sales from 2014 to 2016 were 993.02 million baht, 891.77 million baht and 772.04 million baht respectively. In 2014, cost of sales increased from previous year of 161.79 million baht or 19.46 percent due to revenue from sales and services increased of 233.32 million baht or 15.96 percent. In 2015, cost of sales decreased from previous year of 101.25 million baht or 10.20 percent due to revenue from sales and services decreased of 207.96 million baht or 12.27 percent. In 2016, cost of sales decreased from previous year of 119.73 million baht or 13.43 percent due to revenue from sales and services decreased of 107.50 million baht or 7.23 percent

The company’s two main products are 1) Diamond Jewelry and Others; and 2) Carat Diamond. Normally diamond jewelry has higher gross profit margin than loose diamond or carat diamond. Moreover, each product line has different rate of gross profit margin. The company’s gross profit margin from 2014-2016 were 41.43 percent, 40.05 percent and 44.06 percent respectively. The gross profit margin in 2015 was decreased from previous year due to the sales discount and promotions of which affected by the postpone of purchase of certain of consumer segments in the first 9 months of 2015. The gross profit margin in 2016 was increased from previous year due to the improvement of the inventory management, particularly for the main raw material cost, and the management of sales mix in each product category efficiently.

Selling and Administrative Expenses

Selling and Administrative Expenses hereby comprise two main components as: ones with direct variation to commission fees, costs for advertisement and public relations and credit card fees; and ones with indirect variation which are transportation expenses.

In 2014, the company’s selling and administrative expenses were 449.19 million baht increased by 18.31 percent from previous year. The ratio of costs on sales and administration with compensation for executive staff members, compared to revenue from sales and service coverage was 26.54 percent which was higher than one with the same period of previous year of 26.01 percent. While the revenue from sales and services in 2014 was increased, some of expenses on sales and administration with compensations for administrators were not directly variable with, particularly salaries and bonuses for employees and rental. Therefore, the proportion of costs of sales and administration with compensation for executive staff members were highly increased. However, the company has to control all expenses; sales and administration with compensation for executive staff members by the annual budgeting plan with assignment for controlling and auditing on monthly basis.

In 2015, the company’s selling and administrative expenses were 433.42 million baht decreased by 3.68 percent from previous year. The ratio of costs on sales and administration with compensation for executive staff members, comparing with turnovers and service coverage was 29.14 percent which was higher than one with the same period of previous year of 26.54 percent. While to revenue from sales and services in 2015 were decreased, some of expenses on sales and administration with compensations for administrators were not directly variable with, particularly salaries and bonuses for employees and rental. Therefore, the proportion of costs of sales and administration with compensation for executive staff members were highly increased. However, the company has to control all expenses; sales and administration with compensation for executive staff members by the annual budgeting plan with assignment for controlling and auditing on monthly basis.

In 2016, the company’s selling and administrative expenses were 412.92 million baht decreased by 4.73 percent from previous year. The company’s selling and administrative expenses represented 29.92 percent of revenue from sales and services which was indifferent with the same period of previous year of 29.14 percent. The company’s variable selling expenses are staff incentives, advertising and public relation, and credit card fee. The Company controls on the selling and administrative expenses by the annual budgeting plan with assignment for controlling and auditing on monthly basis

Operating profit and Comprehensive income

In 2014, operating profit was 256.89 million baht or increased from previous year by 1.34 percent due to an increase in revenue from sales and services.

Comprehensive income was 205.12 million baht or increased from previous year by 1.14 percent due to an increase in revenue from sales and services which resulted to an increase in comprehensive income approximately 2.32 million baht. The comprehensive income margin was 13.87 percent and 12.10 percent in 2013 and 2014, respectively.

In 2015, operating profit was 166.29 million baht or decreased from previous year by 35.27 percent due to a decrease in revenue from sales and services.

Comprehensive income was 129.59 million baht or decreased from previous year by 36.82 percent due to a decrease in revenue from sales and services which resulted to a decrease in comprehensive income of 75.53 million baht. The comprehensive income margin was 12.10 percent and 8.71 percent in 2014 and 2015, respectively.

In 2016, operating profit was 198.50 million baht or increased from previous year by 19.37 percent due to an increase in gross profit and a decrease in selling expenses.

Comprehensive income was 157.93 million baht or increased from previous year by 21.87 percent due to an increase in gross profit and a decrease in selling expenses of which resulted to an increase in comprehensive income of 28.34 million baht. The comprehensive income margin was 8.71 percent and 11.44 percent in 2015 and 2016, respectively.

Assets

As of 31 December 2014, the current assets mainly comprised cash and cash equivalents of 29.74 million baht or 2.67 percent of total assets, short-term investment of 152.50 million baht or 13.70 percent of total assets; trade and other receivables of 95.45 million baht or 8.54 percent of total assets, and inventory of 694.79 million baht or 62.42 percent of total assets. The major changes in assets were a decrease in cash and cash equivalents of 20.19 million baht due to the investment in short-term investment of 12.04 million baht which gained a higher return. In addition, the Company has a policy to increase the inventory level in each branch in order to increase the revenue from sales and services as well as expansion of 8 new branches in 2014.

As of 31 December 2014, the non-current assets mainly comprised building and equipment of 106.39 million baht or 9.56 percent and cash deposit and lease rights of 21.19 million baht or 1.90 percent of total assets.

As of 31 December 2015, the current assets mainly comprised cash and cash equivalents of 43.42 million baht or 4.20 percent of total assets, short-term investment of 147.64 million baht or 14.27 percent of total assets, trade and other receivables of 99.90 million baht or 9.66 percent total assets, and inventory of 601.22 million baht or 58.13 percent of total assets. The major changes in current assets were a decrease in inventory of 93.57million baht due to an increase in efficiency of inventory management, offset with an increase in cash and cash equivalents of 13.68 million baht.

As of 31 December 2015, the non-current assets mainly comprised building and equipment of 105.02 million baht or 10.16 percent and cash deposit and lease rights of 22.75 million baht or 2.20 percent of total assets.

As of 31 December 2016, the current assets mainly comprised cash and cash equivalents of 29.58 million baht or 2.83 percent of total assets, short-term investment of 173.84 million baht or 16.64 percent of total assets, trade and other receivables of 146.78 million baht or 14.05 percent of total assets, and inventory of 558.60 million baht or 53.48 percent of total assets. The major changes in current assets were an increase in trade and other receivables of 46.88 million baht, an increase in cash and cash equivalents included short term investment totaling 12.36 million baht, offset with a decrease inventory of 42.62 million baht which was due to an increase in the efficiency of inventory management.

As of 31 December 2016, the non-current assets mainly comprised building and equipment of 90.24 million baht or 8.64 percent and cash deposit and lease rights of 21.73 million baht or 2.08 percent of total assets.

Quality of Assets

(a) Trade receivables and allowance for doubtful accounts:

The trade receivables shall be classified upon due of payment as follows:

(Unit : Million Baht)
Remaining Period of Time 31st Dec 2014 % 31st Dec 2015 % 31st Dec 2016 %
Within due of payment 85.72 89.49 96.24 96.48 144.46 98.28
Not exceeding 3 months 6.13 6.40 2.38 2.39 1.43 0.97
Over 3 month-due, till 6 months 1.96 2.05 - - - -
Over 6 month-due, till 9 months 0.20 0.21 - - - -
Over 9 month-due, till 12 months 0.41 0.43 0.04 0.04 - -
Overdue for 12 months upwards 1.37 1.42 1.09 1.09 1.10 0.75
Total 95.79 100.00 99.75 100.00 146.99 100.00
Allowance for doubtful debts (1.62) (1.69) (1.11) (1.11) (1.13) (0.77)
Total-Net 94.17 98.31 98.64 98.89 145.86 99.23

The accounts receivable of the Company comprises debtors as department stores holding debts from sales of products through department stores within credit term of 45 to 60 days. Most of accounts receivable in this type shall be able to pay on due and some of them would be clients making contracts likewise franchise of the Company with orders of products for the Company for distribution. The Company undertakes policies for providing credit to these accounts receivable within 45 to 60 days, while the Company allows them to pay for such goods and products with delay. This causes pending number of accounts receivable, anyhow the Company shall be able to collect money from clients on due. And for the direct sales to end users or consumers, there is none of credit scheme or payment by monthly installments.

In additional, the Company has issued policies for doubtful debt, the reserved fund would be installed when any account receivable has overdue debt, longer than 180 days, or under the prediction with reference to record of debt payment in the past or any information given to executive entity. The allocation of reserved fund would respond to number of debtors with uncollectible accounts. As of 31 December 2014, 31 December 2015 and 31 December 2016, the Company’s allowance for doubtful accounts were 1.62 million baht, 1.11 million baht and 1.13 million baht respectively. The installment of remedial for uncollectible accounts was commissioned in accordance with policies remedial for uncollectible accounts in all periods and the Company had retained this reserved fund covering to all risks and problems.

(b) Inventory:

(Unit : Million Baht)
Items 31st Dec 2014 % 31st Dec 2015 % 31st Dec 2016 %
Diamond Jewelry 543.87 78.28 472.14 78.53 469.49 84.05
Carat 26.24 3.78 49.51 8.23 39.36 7.05
Work in Process 16.86 2.43 22.25 3.70 7.48 1.34
Setting; 7.00 1.01 12.19 2.03 6.79 1.22
Gold 2.70 0.39 1.42 0.24 2.86 0.51
Diamond-raw material; 86.67 12.47 37.08 6.17 26.51 4.75
Consumable material; 11.45 1.65 6.63 1.10 6.11 1.09
Total-Net 694.79 100.00 601.22 100.00 558.6 100.00

As of 31 December 2014, the inventory of the company increased to 694.79 million baht from 565.48 million baht in previous year, increased from previous year by 129.31 million baht or 22.87 percent due mainly to an increase in diamond jewelry of 111.02 million baht which resulted from branches expansion from 108 units to 116 units in 2014.

As of 31 December 2015, the inventory of the company was 601.22 million baht compared to 694.79 million baht in previous year, decreased from previous year by 93.57 million baht or 13.47 percent due to the efficiency of inventory management.

As of 31 December 2016, the inventory of the company was decreased from 601.22 million baht in previous year to 558.60 million baht, decreased from previous year by 42.62 million baht or 7.09 percent which mainly due to a decrease in raw material of 14.53 million baht and carat diamond of 10.15 million baht due to the efficiency of inventory management.

On the inventory management, in category of diamond jewelry, the company would collect information and quantity of products on basis of forms and formats for classification and tracking of products with slow pace. If any is identified with slow pace, the Company shall move such products to other branches for increase of possibility with choice of sales. And at the end, if any form of product does not match with demands and is left in stock without value-adding, the company shall set up an event with promotion for sales, likewise the increase of discount portion with reduce of profit and finally if such product shall not be sold, the company shall dictate a policy with exploitation of such product, e.g. to reformat the form of them with new style of product. And for those readymade products in form of diamond in carat or raw materials, they would not be managed on basis of time and out of date, but on basis of principal with global market price with estimation of depreciation of product.

(Unit : Million Baht)
Items 31st Dec 2014 31st Dec 2015 31st Dec 2016
Net profit 204.55 131.12 157.28
Adjustment of items with impact to net profit 75.22 55.92 68.17
Profit from operating activities before changes in operating assets and liabilities 279.77 187.04 225.45
Change in assets (148.49) 84.90 (7.70)
Change in liabilities 73.61 (112.57) (53.86)
Income tax paid (53.64) (40.06) (35.45)
Net cash provided by operating activities 151.25 119.31 128.44
Net cash used in investing activities (47.75) (14.74) (39.63)
Net cash used in financing activities (123.69) (90.89) (102.65)
Net increase (decrease) in cash and cash equivalents (20.19) 13.68 (13.84)
Cash and cash equivalents at beginning of the year 49.93 29.74 43.42
Cash and cash equivalents at end of the year 29.74 43.42 29.58

Reference to above figures, the company gains profits in continuity in every year, but the cash flow gained from operation of the company is sporadically reduced. The turnovers with service coverage are increased in every year and of course shall be cause of increase of current capital for procuring and purchasing of raw material and retain of inventory for allowing clients to be able to freely choose. The company acquires such working capital from accounts payable that receiving credit allowance within 90-180 days and shall be a part of benefits from operation of the company. And from the operation of business of the company with extension of service coverage, it caused reduce of cash flow with deficiency and spending of cash for procuring and purchasing of products. The company had taken a loan from commercial banks in short-term loan whenever it really needed cash with liquidity. Currently, the Company has a bank loan from commercial bank with adequacy for running of business, so there is none of problem with liquidity. Its liquidity proportions with substances shall be presented as follows:

In 2014, current ratio was 2.49 with decrease from 2.75 in 2013. The average collection period was 19.33 days which was indifferent from 19.80 days in 2013. The average sales period was 231.61 days decreased from 226.42 days in previous year, while the average payment period was 110.60 days increased from 95.24 days in previous year.

In 2015, current ratio was 3.18 with increase from 2.49 in 2014. The average collection period was 23.97 days which was increased from 19.33 days in 2013. The average sales period was 265.23 days increased from 231.61 days in previous year, while the average payment period was 111.45 days increased from 110.60 days in 2014.

In 2016, current ratio was 3.91 with increase from 3.18 in 2015. The average collection period was 32.62 days which was increased from 23.97 days. The average sales period was 274.17 days increased from 265.23 days in previous year, while the average payment period was 88.71 days decreased from 111.45 days in 2014.

Operation Efficiency

The company does not have a manufacturing factory for its products, while also rents areas for distribution of products rather than purchasing plots of lands, therefore it holds very limit of permanent assets. For this matter, the ratio of returns from permanent assets shall not be used to evaluate effectiveness on usage of assets of the Company, in contradiction it shall be used as reflection of efficiency.

In 2014 return on assets ratio was decreased from 29.87 to 24.85 due to an increase in assets from head office and branch expansions.

In 2015 return on assets ratio was decreased from 24.85 percent in 2014 to 15.49 due to an increase in assets from branch expansions and a decrease in comprehensive income from 205.12 million baht in 2014 to 129.59 million baht in 2015.

In 2016 return on assets ratio was increased from 15.49 percent in 2015 to 19.10 due to an increase in comprehensive income from 129.59 million baht in 2015 to 157.93 million in 2016.

Liabilities

As of 31 December 2014, the company’s loan facilities from financial institutions were 115 million baht which mainly comprised 5-year term loan, loan from trust receipt and promissory notes from 1-6 months of which bear the interest at the market rates, and no collateral.

As of 31 December 2015, the company’s loan facilities from financial institutions were 520 million baht which mainly comprised 5-year term loan, loan from trust receipt and promissory notes from 1-6 months of which bear the interest at the market rates, and no collateral.

As of 31 December 2016, the company’s loan facilities from financial institutions were 680 million baht which mainly comprised 5-year term loan, loan from trust receipt and promissory notes from 1-6 months of which bear the interest at the market rates, and no collateral.

Shareholders’ Equity

As of 31 December 2014, the company’s shareholder equity was 709.09 million baht, and retained earnings was 425.05 million baht. In the Annual General Meeting of Shareholders in 2014, the meeting adopted a resolution with approval for payment of dividend from profit from operations in 2013 at the rate of 0.70 baht per share and in Board of Director Meeting no.3/2014, the meeting adopted a resolution with approval for payment of interim dividend from profit from operations during January-June 2014 at the rate of 0.15 baht per share.

As of 31 December 2015, the company’s shareholder equity was 704.49 million baht, and retained earnings was 420.45 million baht. In the Annual General Meeting of Shareholders in 2015, the meeting adopted a resolution with approval for payment of dividend from profit from operations in 2014 at the rate of 0.71 baht per share and in Board of Director Meeting no.3/2015, the meeting adopted a resolution with approval for payment of interim dividend from profit from operations during January-June 2015 at the rate of 0.21 baht per share.

As of 31 December 2016, the company’s shareholder equity was 775.28 million baht, and retained earnings was 491.24 million baht. In the Annual General Meeting of Shareholders in 2016, the meeting adopted a resolution with approval for payment of dividend from profits from operations in 2015 at the rate of 0.46 baht per share and in Board of Director Meeting no.3/2016, the meeting adopted a resolution with approval for payment of interim dividend from profits from operations during January-June 2016 at the rate of 0.25 baht per share.

Factors and incluences towards operation or financial status in the future

The factors and influences that might create impact to operation or financial status in the future, apart from those mentioned in risk factors, shall be enlisted as follows:

Change of financial proportion due to increasing capital from increase of stock capital

On 31 December 2014, the Company held paid-up share capital was 174,273,125 baht with given value, as 1 baht per share, in 175,000,000 ordinary shares and gained net profit in 2014 in amount of 204.55 million baht, with Earning per share of 1.17 baht per share, and value in account in 4.07 baht per share, calculation from quantity of ordinary shares of the Company, on 31 December 2014.

On 31 December 2015, the Company held paid-up share capital in amount of 174,273,125 baht with given value, as 1 baht per share, in 175,000,000 ordinary shares and gained net profit in 2015 in amount of 131.12 million baht, with Earning per share of 0.75 baht per share, and value in account in 4.04 baht per share, calculation from quantity of ordinary shares of the Company, on 31 December 2015.

On 31 December 2016, the Company held paid-up share capital in amount of 174,273,125 baht with given value, as 1 baht per share, in 175,000,000 ordinary shares and gained net profit in 2016 in amount of 157.28 million baht, with Earning per share of 0.90 baht per share, and value in account in 4.45 baht per share, calculation from quantity of ordinary shares of the Company, on 31 December 2016.

According to the Resolution adopted in the Annual General Meeting of Shareholders in 2016, the auditing fee, to

Mr. Prawit Wiwanthananut Certified Public Accountant Registration number 4917
Mr Thoetthong Thepmangkon Certified Public Accountant Registration number 3787
Mr. Udom Thanuratpong Certified Public Accountant Registration number 8501
Mr. Kraisit Silpamongkonkul Certified Public Accountant Registration number 9429

from PV Audit Co., Ltd., in charge of auditor for account in year 2016, in amount of 1,100,000 baht increased from 850,000 baht in 2015.