INTEGRITY QUALITY SERVICE - Saha-Union Co., Ltd

SAHA-UNION
67
220.83 million or 1.65%, and the accounts receivable decreased by Baht 436.14 million or 3.32% due to a payment
receivable from debtors within due.
The total investment fell by Baht 99.33 million, meanwhile the proportion of the component fell by 6.99%, composing
of investments in associated companies decreasing by Baht 264.59 million while investments in other companies
increasing by Baht 165.27 million. The main reason for decreasing investments in associated companies was due
to sale of investments in Wuxi–Union Cogeneration Co., Ltd., a cogeneration power plant that was agreed that it was
unable to operate its normal business because the Chinese government had a policy to relocate factories around
the power plant, which were its customers, to a new location, and demanded the power plant to choose between
changing from a coal power plant to a natural gas (with a lot more investments required) or moving to a new location
(with a lot of investments required as well). As a result, the future returns might not worth the investments, and the
company had to sell the investments before its value decrease further. The investments at cost were amounted
to Baht 746.29 million. In this course, the Company recorded the profit from selling the investments under the
consolidated financial statements (using the equity method) amounted to Baht 134 million. Moreover, the record
of investments in associated companies using the equity method had additional investments of other associated
companies recorded, making the net investments in associated companies to decrease by Baht 264.59 million. The
Company’s investments rose by Baht 165.27 million due to additional investment in available-for-sale securities in
2011 in both domestic and oversea countries, which details are as specified in the Notes to Financial Statements
No. 15 in the topic Investment in Other Companies.
The transactions of investment properties increased from the previous year by Baht 59.38 million, significantly due to
the reversal of allowance for impairment of rented property owned by a subsidiary named Union Construction Corp.,
Ltd. for Baht 64 million back to the investment properties since the current fair price of such property was estimated
as higher than the cost, so the impairment transaction had to be transferred back.
The property, plant and equipment transactions increased by Baht 467.52 million since a subsidiary producing
vacuum bottles expanded its production capacity as planned to have a new factory in Bangpakong District,
which needed to install the production and electricity systems, add more production lines, order new machines
and related equipment to keep up with an increasing orders. Assets other than those mentioned above had no
significant change.
4.1.2 Quality of Assets
As of 31 December 2011, the balance of trade and other accounts receivables was amounted to Baht 1,449.07
million, or 6.58% of total assets, decreasing by Baht 436.14 million when compared to Baht 1,885.21 million in the
previous year. Of this amount, the trade accounts receivables - related companies were amounted to Baht 24.06
million, the net trade accounts receivables of unrelated parties were amounted to Baht 1,055.02 million and other
accounts receivables were amounted to Baht 369.99 million. In total, the net trade accounts receivables of this year
were amounted to Baht 1,079.08 million, decreasing by Baht 459.35 million, when compared to Baht 1,538.44 million
in 2010 due to the decreases in the value of products and services income as details mentioned earlier under the
topic Sales and Services Income. Nevertheless, most outstanding trade accounts receivables were not yet overdue.
The average period of debt collection in 2011 was 55 days, equivalent to the period of loan provision of the Company.
However, the Company has evaluated the net value expected to receive from the trade accounts receivables which
past due for over 1 year, amounted to Baht 44.24 million. The Company has also recorded the allowance for doubtful
debts for the said accounts expected to be uncollectable, amounted to approximately Baht 29.94 million, or equal to
2.70% of the total accounts receivable. The Company and its subsidiaries believed that such allowance for doubtful
accounts was sufficient according to the current situation. As for other accounts, they were short-term accounts
irrelevant to products and services sale such as advances, input tax refundable, prepaid corporate income tax, etc.,
which were under the process of following-up and expected to be cleared within 1 year. As a result, the net accounts
receivable under the consolidated financial statements were expected to be repaid by all.
As for inventories as of 31 December 2011, the Company had its net inventory amounted to Baht 1,611.74 million, or
7.32% of total assets, increasing by Baht 385.03 million when compared to Baht 1,226.71 million in 2010. The increasing
inventory was a result of more products coming in by the end of December 2011 to be delivered to customers at the
beginning of January 2012. Additionally, a part of them was the raw material inventory to be prepared for production,
but the European customers postponed their delivery, resulting in an increase in inventories when compared to those