INTEGRITY QUALITY SERVICE - Saha-Union Co., Ltd

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SAHA-UNION
4.2 Liquidity
in the previous year. Meanwhile, the subsidiaries had an internal control system that constantly check the number of
inventories with the report of inventories life for further management and price estimation and comparison with the
market price. If the inventories prices according to accounting were higher than the market prices, or the inventories
perished or degraded, the Company would record the allowance of devaluation of inventories value. In 2011, the
Company reduced the cost of inventories to have the net realizable value by Baht 113.11 million. The main reason
was due to the continuous decrease in cotton prices, causing the accumulated value of allowance of devaluation of
inventory value to reach Baht 202.36 million, or 11.16% of total inventories. The Company and its subsidiaries have
evaluated that the allowance for devaluation of the said inventories was moderately suitable.
At the end of 2011, the Company and its subsidiaries had the net investments of Baht 9,174.66 million or equal to
41.69% of total assets, decreasing by Baht 99.33 million when compared to 2010. This was because there were
changes in terms of investments sale in associated companies and additional purchase in other companies, which
has been explained in details under the topic Components of Assets, second paragraph. Also the Company’s
investments were divided into domestic and oversea investments, which details of investments name, shareholding
percentage, cost, fair prices, and other related information are shown in the Notes to Financial Statements Clause 13,
14, and 15 with the information about changes of investment transactions during 2010-2011. Previously, the Company
regularly evaluated the quality of investments and recorded the allowance for impairment of its investment, where
there were signals of uncertainty or the quality of investments. The Company believed that the amounts appeared
in the financial statements were moderately suitable quality.
4.2.1 Cash Flow Statements
As of 31 December 2011, the Company and its subsidiaries had the cash flows from operating activities amounted
to Baht 723.37 million; the net cash flows from investing activities amounted to Baht 504.37 million; and the net cash
from financing activities amounted to Baht 1,482.36 million, there were translation adjustments between foreign
currencies and Thai Baht to increase by Baht 70.32 million. In total, during the year the cash flow increased by Baht
2,780.43 million, when summing up with cash and cash equivalent at beginning of year brought forward, amounted
to Baht 1,588.08 million, balance of cash and cash-equivalent at end of year was equal to Baht 4,368.51 million.
During 2011, the Company and its subsidiaries had the cash flows from operating activities amounted to Baht
723.37 million, which was less than the profit from operating activities before changes in operating assets and
liabilities of Baht 1,250.91 million by Baht 527.54 million. This was because the Company had to pay more for
raw materials and inventories by Baht 492.70 million, whereas the Company also received the trade and other
receivables by Baht 414.92 million. In addition to increasing payments of other current liabilities by Baht 184.86
million and of non-current liabilities by Baht 23.88 million, the subsidiaries had interest payment amounted to Baht
16.76 million; corporate income tax payment amounted to Baht 272.12 million, meanwhile they received corporate
income tax refund by Baht 82.57 million. The Company and its subsidiaries had cash from operating activities
equal to 57.83%; and from inventories equal to 39.39%, totaling at 97.22% of operating profits prior to the changes
in operating assets and liabilities. The increasing inventories can be changed to cash within the circle of no more
than 2 quarters. Therefore, the Company and its subsidiaries had a lot of operational liquidity and had sufficient
cash flow for its business operations.
The Company and its subsidiaries obtained the net cash flows from its investment activities amounted to Baht 504.37
million in 2011. This cash came from disposals of Wuxi-Union Cogeneration Co., Ltd. amounted to Baht 874 million;
from assets sale to the market’s demand amounted to Baht 743 million; treasury bill sale amounted to 86 million, and
other trivial sources added to the dividend received from investments amounted to Baht 508 million with the interest
income of Baht 29 million; and cash proceeds from disposals of permanent assets amounted to Baht 40 million.
Moreover, there were acquisition of overseas investment properties amounted to Baht 108 million; investments for
production capacity expansion or purchases of more equipment, mostly in the vacuum bottle, textile, plastic, rubber
businesses and power plants in China totaling at Baht 860 million. There were also payments to increase proportional
capital or subsidiaries and associated companies totaling at 160 million; and there were securities purchase payment
in the overseas market’s demand increasing by Baht 689 million. After the set-offs, the Company had its net cash flow
from investing activities amounted to Baht 504.37 million.
Regarding the financing activities, the Company and its subsidiaries settled the dividend payment to shareholders
amounted to Baht 701.51 million; repaid the long-term loans amounted to Baht 375 million; paid the liabilities under