11. Financial Position and Performance 

  11.1 Summary of Financial Statement in the Previous 3 Years

(A) Accounting Audit Summary

-   Financial Statement for year-end, as of December 31, 2009 and 2008 :
    The accounting auditor has expressed non-binding opinions towards
    the financial statement. The auditor is Miss Sansanee Poonsawat from
    AMC Co., Ltd.

-   Financial Statement as of December 31, 2007 and 2006 : The
    accounting auditor has expressed the non-binding opinion towards the
    financial statement. The auditor is Miss Sukanya Sutheeprasert from
    AMC Co., Ltd.

(B) Financial Statement

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Financial Ratios

  ------------------------------------------- -------------- ------------ ----------
                                              Consolidated   Financial    
                                              financial      statements   
                                              statements *   in which the 
                                                             equity       
                                                             method is    
                                                             applied to   
                                                             investment   

  Liquidity Ratio                             2009           2008         2007

  Current Ratio (times)                       1.03           0.97         1.04

  Quick Ratio (times)                         0.64           0.50         0.56

  Cash Flow Ratio (times)                     0.35           0.30         0.31

  Accounts Receivable Turnover (times)        8.20           8.23         7.07

  Average Debt Collection Period (Day)        44             44           51

  Inventory Turnover (times)                  6.05           5.86         6.93

  Average Selling Period (days)               60             61           52

  Payable Turnover (times)                    3.15           3.31         3.56

  Average Payment Period (days)               114            109          101

  Cash Cycle (days)                           (10)           (4)          2

                                                                          

  Profitability Ratio                         2009           2008         2007

  Gross Profit Margin (%)                     31.70          30.66        31.17

  Operating Profit (%)                        6.37           5.79         7.08

  Other Profits (%)                           1.07           1.20         1.30

  Cash to Earnings Ratio (%)                  147.40         130.37       103.75

  Net Profit Margin (%)                       4.63           4.40         4.65

  Rate of Return to Equity (%)                32.24          29.62        27.60

                                                                          

  Efficiency Ratio                            2009           2008         2007

  Return on Assets (%)                        14.91          14.21        17.15

  Return on Fixed Assets (%)                  60.71          66.65        65.39

  Asset Turnover (times)                      2.37           2.48         2.45

                                                                          

  Financial Policy Ratio                      2009           2008         2007

  Debt to Equity Ratio (times)                1.86           1.79         1.63

  Interest Capability Ratio (times)           420.79         2,264.37     1,170.61

  Debt Service Coverage Ratio (times)         1.65           0.95         0.95

  Dividend Payout Rate (%)**                  98.29          98.19        98.65
  ------------------------------------------- -------------- ------------ ----------

  Remark * Consolidated financial statements of the year 2009, The
  Company commenced to consolidate the financial statements of Plearn
  Patt Co., Ltd. since October 1, 2009 onwards.

  ** Dividend payment rate has been approved from the board of Directors
  and waiting for approval from shareholders in the annual general
  shareholder's meeting, scheduled for April 29, 2010 and calculated
  based on the number of common shares to be counted on December 2,
  2009.

  11.2 Interpretation & Analysis of Financial Status and Results of
  Operations

Publishing Business Situation in 2009

The economic outlook of the year 2009 suggested that Thailand is still
facing the effect of economic recession, fluctuation of the world’s oil
prices, unemployment, political uncertainty, and the 2009 flu, causing
the reduction in purchasing power and decrease in number of customers
visiting the shopping center, which affects the country’s retail
industry as a whole. However, the Company is still able to continuously
keep the level of growth and profit in a satisfactory manner.

However, the book business in 2009 continued to grow in a consistent
fashion even though the growth vate declined, like other retail
businesses. The major force behind the growth is the unusually high
number of new chain store opening in 2007 and 2008, especially small and
convenient book stores opened by big companies in the convenient store
business. The Company as well as other business operators continued to
open new stores in their networks White there was also a growth in small
and medium sized publishers.

The number of new book titles published in 2009 and distributed to
bookstores were expected to be on the average of 37 titles per day,
which is close to the number in 2008 with the average of 36 titles per
day. The publishers could select books that meet the market’s demand
better, resulting in the better sales in the book business in a long
term.

The Publishers and Booksellers Association of Thailand expected the
growth of books business in 2009 to be somewhere around +1%, the fourth
consecutive drop with respect to Thailand total market value. The
approximation of the total value of cover price is at THB 18,800 million
in 2009 with the anticipation that each Thai has a budget of THB 300 per
person per year to buy books. These statistics, compared to other
developed nations, proved that the rate of book-reading is still far too
little and reflected that there is a potential for the book business to
grow much more.

With more new bookstores and the fact that existing bookstores continued
to improve the quality of service, buying books became more convenient
and enlarged the market base, which is good to the overall books
business.

Profitability and Operating Efficiency During the past 3 years, the
Company's revenue continued to grow. The most satisfied growth came from
the expansion using distribution channels of SE-ED Book Centers - the
Company-owned bookstores, as well as through the network stores
(University Bookstores, and points of sales).

-   In 2009, the Company opened 21 more branches of bookstore. As of
    December 31, 2009, the total branches from this amount, there were
    324 branches which are still in operation, plus 33 points of sales.
    SE-ED still took more important role in distribution to support its
    branches expansion, including the increasing of publishing of
    best-sellers titles.

  ----------------------------------- ------------ ----------- -----------
                                      Separate                 
                                      financial                
                                      statements               

                                      2009         2008        2007

  Total Revenue (THB million)         4,646.84     4,424.50    3,950.59

  Growth from the last year (%)       +5.03        +12.00      +6.01
  ----------------------------------- ------------ ----------- -----------

Operating Results For the year 2009 as of December 31, 2009, the
financial information can be summarized as follows:

-   The Company consolidated the financial statements of SE-EDUCATION
    PUBLIC COMPANY LIMITED and those of Plearn Patt Co., Ltd., in the
    preparation of the consolidated financial statements for the 4^(th)
    quarter of 2009, because the Company’s Mr. Thanong Chotisorayuth,
    Managing Director has the controlling power in directing the
    financial policies and operation of Plearn Patt Co., Ltd. The said
    Company is, therefore, treated as a subsidiary company in compliance
    with the Thai Accounting Standard No. 27 on “Consolidated and
    separate Financial Statements (Revised 2007)”. The Company commenced
    to consolidate the financial statements of Plearn Patt Co., Ltd.
    since October 1, 2009 onwards.

-   Total revenue of the year 2009 consists of :

    -   Total revenue of Consolidated financial statements: the Company
        and its subsidiaries’ revenues for 2009 was THB 4,673.69 million
        which THB 4,621.07 million was from sales revenue and education
        fee with service charge.

    -   Total revenue from separate financial statements: The Company’s
        total revenue of the year 2009 is worth THB 4,646.84 million or
        an increase of 5.03 % from the previous year. The sales revenue
        is accounted for THB 4,595.76 million from the total revenue or
        an increase of 5.17%, mostly resulted from the great number of
        newly opening of SE-ED Book Center and its network stores during
        2008 and 2009 causing the revenue to rise at 5.62%.

  Moreover, the revenue from the book distribution business and the
  wholesales business which directly distributes book to other
  independent bookstores and also to schools and universities has
  increased to 7.35% as compared to the number in the same period of
  last year. This is owing to the fact that the number of books that the
  Company published and also books distributed for other publishers has
  shown a great increase due to the fact that more and more publishers
  became trusted in the Company to help them distribute books.

-   The Company’s net profit of the year 2009 consists of :

    -   The net profit of consolidated financial statements: The
        Company’s net profit of the year 2009 consolidated financial
        statements of the Company and its subsidiaries were worth THB
        217.51 million.

    -   The net profit of separate financial statements: The Company’s
        net profit of the year 2009 of separate financial statements is
        worth THB 214.36 million, which increased from the same period
        of the previous year by 8.50%.

    -   The gross margin rate slightly increased due to the sales of
        SE-ED published books and distributed books in SE-ED Book Center
        and its network stores.

    -   There has been a change in the inventory recording method for
        magazines and newspapers at SE-ED Book Center stores, which, in
        the past, such records were made using the whole amount of cost
        at the point of goods received due to the fact that barcode
        system for magazine and newspapers in Thailand was still not
        complete.

-   The company opened branches of SE-ED Book Center during the year
    2009 the Company opened 21 new branches of SE-ED Book Center, which
    results in, as of December 31, 2009, the total number of 324
    operating branches and 33 point of sales.

Financial status analysis for year 2009 compare to 2008

Total Asset As of December 31, 2009 the company and its subsidiaries’
had a total asset of THB 2,125.39 million. The Company’s total asset of
separate financial statements is worth THB 1,946.13 million increase of
THB 125.70 million from the end of last year. Causes of changing of
total assets:

-   Cash and cash equivalent items as of December 31, 2009 for THB
    506.61 million increased of THB 169.93 million from cash receive
    from goods sold in the branches at year end

-   Short-term investment-net for THB 188.94 million increased THB 21.01
    million due to increasing adjustment from last year of seven-month
    fixed account and the increasing of market price of securities
    available for sale.

-   Trade accounts-net for THB 96.80 million, an increased THB 15.68
    million due to receiving the revenue from some main consignment
    debtors of the wholesales and distribution business at year end.

-   Loan due from associated company decreased THB 11 million as the
    return loan in Q1 of 2009 from Plearn Patt Company which can
    received loan with better condition from other sources.

-   Inventories-net for THB 438.84 million decreased THB 59.78 million
    from selling the end of last year reserved stock of foreign books of
    Oxford University Press text at the end of last year which would
    have a great sales volume in the beginning of academic opening term
    including the more efficient inventory management.

-   Damage compensation receivable increased THB 17.79 million from
    waiting payment for insurance fire damage claim of one. Which the
    Company has already received the compensation since February 2010.

-   Property, plant and equipment-net for THB 318.87 million decreased
    THB 26.35 million, Most of them was the increased of Depreciation
    for year of 2009.

-   Leasehold right on buildings-net for THB 116.56 million decreased
    THB 12.56 million, Most of them was the increased of Amortized for
    year of 2009.

Total liabilities As of December 31, 2009 the Company and its
subsidiaries’ had a total liability of THB 1,381.58 million, The
Company’s total liabilities of separate financial statements is worth
THB 1,264.97 million an increase of THB 92.43 million or 7.88%. Causes
of changing of total liabilities:

-   Account payable THB 1,031.36 million, was increased THB 58.22
    million. Most of them was wholesales creditors of account payable of
    distributors at the year end.

-   Other accounts THB 46.47 million, was increased THB 9.80 million.
    Mostly from increasing of asset creditor from opening new branches
    each year.

-   Accrued expenses THB 106.29 million, was increased THB 8.85 million.
    Most of them were Accrued Bonus.

-   Accrued corporate income tax increased THB 9.50 million. From the
    increasing profit and decreasing of tax benefit from last year which
    was granted tax benefit from selling commercial buildings at Din
    Daeng.

Shareholders’ equity As of December 31, 2009 amount THB 743.81 million,
The Company’s shareholders’ equity of separate financial statements is
worth THB 681.16 million an increase of THB 33.27 million represent
5.14% due to:

-   Net profit from operation result year of 2009 (separate financial
    statements) amount 214.36 million.

-   Retained earnings decreased due to the dividend payment as THB
    191.11 million.

-   Unrealized loss on securities available for sale decreased THB 11.02
    million due to the increasing market price of available for sales
    securities last year.

Cash flow and sufficiency of capital structure

+-----------------------------+--------+------+-------+--------+------+
|                             |        |      |       | (Unit  |      |
|                             |        |      |       | :      |      |
|                             |        |      |       | M      |      |
|                             |        |      |       | illion |      |
|                             |        |      |       | Baht)  |      |
+-----------------------------+--------+------+-------+--------+------+
|                             | Jan    |      |       |        |      |
|                             | .–Dec. |      |       |        |      |
+-----------------------------+--------+------+-------+--------+------+
|                             | Consol | Sepa |       |        |      |
|                             | idated | rate |       |        |      |
|                             | fin    |      |       |        |      |
|                             | ancial | f    |       |        |      |
|                             | stat   | inan |       |        |      |
|                             | ements | cial |       |        |      |
|                             |        | st   |       |        |      |
|                             |        | atem |       |        |      |
|                             |        | ents |       |        |      |
+-----------------------------+--------+------+-------+--------+------+
|                             |        |      |       | inc    |      |
|                             |        |      |       | reased |      |
+-----------------------------+--------+------+-------+--------+------+
| Description                 | 2009   | 2009 | 2008  | (decr  | (%)  |
|                             |        |      |       | eased) |      |
+-----------------------------+--------+------+-------+--------+------+
| Cash flow received (used)   | 434.10 | 41   | 3     | 84.45  | 2    |
| from operation activities   |        | 9.42 | 34.97 |        | 5.21 |
+-----------------------------+--------+------+-------+--------+------+
| Cash flow received (used)   | (      | (56  | (11   | 57.40  | 5    |
| from investing activities   | 32.80) | .26) | 3.66) |        | 0.50 |
+-----------------------------+--------+------+-------+--------+------+
| Cash flow received (used)   | (1     | (193 | (18   | (9.82) | (5   |
| from financing activities   | 93.17) | .23) | 3.41) |        | .35) |
+-----------------------------+--------+------+-------+--------+------+
| Cash flow increase          | 208.13 | 16   | 37.90 | 132.03 | 34   |
| (decrease)                  |        | 9.93 |       |        | 8.36 |
+-----------------------------+--------+------+-------+--------+------+

Cash Flow Received from Operation Activities for 2009 was THB 434.10
millions, The Company’s Operation Activities of separate financial
statements is worth THB 419.42 million as listed below:

-   Profit from operation accordance with Cash Flow Statement increased
    in the amount of THB 416.86 millions:

  - The Net profit before corporate income tax for 2009 in the amount of
  THB 290.15 millions.

  - Revenues and expenses in non-monetary form or not dealing with main
  operation in the amount of THB 126.71 millions (Depreciation and
  Leasehold written-off in the amount of THB 108.13 millions, Expense
  from lost goods as THB 21.11 millions and Expense from donated goods
  as THB 19.90 millions).

-   Cash flow increased from trade accounts payable THB 65.31 million.

-   Cash flow decreased from Trade accounts receivable THB 16.25 million
    from the increasing debt recorded from clearing goods from some main
    consignment debtors in Q4 of 2009.

-   Cash flow decreased from tax payment THB 66.29 million.

Cash Flow Used from Investment Activities for 2009 in the amount of THB
(32.80) millions The Company’s Investment Activities of separate
financial statements is worth THB (56.26) million as listed below:

-   Cash flow decreased from Purchase of assets as THB 69.39 millions
    due to investment for new branches expansion.

-   Cash flow increased from cash received from subsidiaries companies
    (Plearn Patt Co.,Ltd.) as THB 11.00 million.

-   Cash flow decreased from seven-month fixed account as THB 10.00
    millions.

-   Cash flow increased from cash dividends received from investment as
    THB 10.14 million.

Cash Flow Used from Financial Activities in 2009 was THB (193.17)
million The Company’s Financial Activities of separate financial
statements is worth THB (193.23) million due to the dividend payment.

  11.3 Remuneration of Auditor

Auditing Fee The Company and its associated companies have paid the
auditing fee for the period of fiscal year 2009 to the SAM NAK-NGAN
A.M.C. Co., Ltd. in the amount of THB 700,000.00. The Auditor doesn’t
have any relation with the Company other than auditing service only.

Other Service Fee The Company and its associated companies don’t pay any
other service fee to the SAM NAK-NGAN A.M.C. Co., Ltd. for the fiscal
year 2009.