11. Financial Statements and Operating Results

1.  Financial Statements

  (A) Report of Independent Auditor and Opinions

  Report of independent auditor certified by Ernst & Young Office
  Limited of the Company and its subsidiaries for the years ended
  December 31, 2009, 2008 and 2007 to the consolidated financial
  statement and the separate financial statements was expressed an
  unqualified opinion on the financial position and the results of
  operations and cash flow for the year then ended in accordance with
  generally accepted accounting principles.

  (B) Financial Statements

-   Consolidated Balance Sheet

-   Consolidated Income Statements

-   Consolidated Statements of Cash Flows

-   Consolidated Financial Ratios

  On 1 January 2007, the Company changed its accounting policy for
  recording investment in subsidiary and associated companies in the
  separate financial statements from the equity method to the cost
  method, in compliance with Accounting Standard No. 44 (revised 2007)
  regarding “Consolidated Financial Statements and Separate Financial
  Statements”, under which investments in subsidiaries, jointly
  controlled entities and associates are to be presented in the separate
  financial statements under the cost method.

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* 2007 figures have been reported as previous template presented as
below.

- Cost of sale 16,373 Million Baht

- Selling and administrative expenses 2,031 Million Baht

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12.2 Management Discussion and Analysis (MD&A)

  Analysis of Financial Performance

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  Revenues

  Total net sales for 2009 were THB 19,971 million, a decline of THB
  1,334 million or 6.3% compared to 2008. Net sales in the cement
  business decreased by THB 1,226 million compared to 2008 due to a
  reduction in domestic consumption and political uncertainty. Concrete
  and aggregate net sales also decreased by THB 440 million, whereas
  business in other segments slightly increased by THB 21 million.

  Income from other areas, gain on disposal of assets not used in
  operations, of THB 102 million rose by 23 million or 29.1% compared to
  2008.

  Expenses

  Cost of sales totaled THB 11,272 million, a decrease of THB 331
  million or 2.9% from the previous year. This was largely the result of
  the company’s determination to reduce fixed cost, increase production
  efficiency and optimize fuel mix to reduce fuel cost.

  Selling and distribution expenses of THB 3,843 million were reduced by
  THB 500 million or 11.5% compared to THB 4,343 million recorded in
  2008. This result was achieved through more selective advertising and
  promotions.

  Administration expenses of THB 923 million were reduced by THB 259
  million or 21.9% compared to THB 1,182 million recorded in 2008. This
  was mainly due to a reduction in consulting costs. In addition, the
  company revised its allowance for assets not used in operations which
  resulted in a gain of THB 80 million in 2009.

  The loss due to a change of foreign exchange rate was THB 13 million
  in comparison to a gain of THB 56 million in 2008. The difference of
  THB 69 million was due to the transfer of net assets and liabilities
  denominated in foreign currencies into the THB equivalent amount using
  the foreign exchange rate at the end of this accounting period (31
  December 2009 of 33.5168 THB/USD) and the previous period (31 December
  2008 of 35.0824 THB/USD).

  Share of income from investment in LANNA Resources Public Co. Ltd. was
  recorded on the consolidated financial statements using the equity
  method amounted to THB 235 million, a decrease of THB 37 million or
  13.6% compared to THB 272 million recorded in 2008. Major changes in
  this investment were a lower share of profit of THB 61 million but a
  higher dividend received of THB 24 million.

  Financial cost rose to THB 196 million for 2009, an increase of THB 29
  million or 17.4% compared to THB 167 million recorded in 2008. These
  higher expenses were the result of debenture issuance in June 2009 in
  the amount of THB 4.0 billion with a 4-year tenure and a 4.50% coupon
  rate. The fully-subscribed debenture will ensure the company’s
  liquidity into the foreseeable future.

  Corporate income tax was THB 1,112 million, a decline of THB 132
  million or 10.6% compared to THB 1,244 million recorded in 2008.

  Analysis of Cash Flows

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  As of 31 December 2009, net increase in cash and cash equivalents for
  SCCC and its subsidiaries were THB 652 million. Cash and cash
  equivalents at the beginning of this period were THB 1,108 million
  together with THB 7 million in foreign exchange gains. This resulted
  in cash and cash equivalents of 1,767 million at the end of this
  period. Please see cash flow details by activity as follows:

  Net cash from operating activities were THB 4,128 million, an increase
  of THB 1,030 million or 33.2% compared to 2008. This was mainly due to
  reduced net working capital although earnings before tax were down by
  THB 355 million from 2008.

  Net cash from payments for maintenance, expansion and other investing
  activities were THB 1,461 million or THB 150 million, 9.3%, lower than
  in 2008. The lower capital expenditures were mainly due to
  postponement of projects which contributed THB 279 million while
  proceeds from disposals of assets not used in operations declined by
  THB 211 million.

  Net cash received from financing activities of THB 400 million
  resulted mainly from net repayments of short-term loans from financial
  institutions in the amount of THB 3,401 million and cash received from
  the issuance of debentures of THB 4,000 million. Total dividend
  payments to shareholders were THB 2,415 million and THB 805 million
  less than the dividends paid in 2008.

  Analysis of Financial Position

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  Assets

  As of 31 December 2009, assets totaled THB 24,350 million, an increase
  of THB 847 million or 3.6% compared to THB 23,503 million in 2008.
  Breakdowns of changes in assets are described below:

  Cash and cash equivalents were THB 1,767 million or 7.3% of total
  assets which were THB 659 million or 59.5% higher than the balance,
  THB 1,108 million, at the beginning of the period. This higher balance
  resulted mainly from cash receipts of THB 4,128 million from operating
  activities, cash receipts of THB 167 million from sales of assets not
  used in operation, dividends of THB 142 million received from the
  associate company LANNA Resources Public Co., Ltd. and net cash of THB
  4.0 billion received from debenture issuance. Total investments were
  THB 1,840 million, loan repayments were THB 3,553 million and dividend
  payments to shareholder were THB 2,415 million in 2009.

  Trade accounts receivable of THB 2,266 million or 9.3% of total assets
  stood lower by THB 370 million or 14%. This change was mainly due to
  the proportion of sales conditions at year end. The average collection
  period improved slightly from 45 days in 2008 to 44 days by the end of
  2009.

  Inventories amounted to THB 1,829 million or 7.5% of total assets, a
  slight decline of THB 71 million or 3.7% from lower levels store
  supplies.

  Investment in associate and related company recorded using the equity
  method on the consolidated financial statements amounted to THB 1,543
  million or 6.4% of the total assets, up by THB 93 million or 8.6%
  compared to 2008.

  Total property, plant and equipment net value was THB 14,240 million
  or 58.5% of the total assets, an increase of THB 816 million or 6.1%
  which was due to the purchase of property, plant and equipment which
  totaled THB 1,816 million, including a significant investment in two
  new waste heat recovery plants with a spend of THB 657 million during
  financial year 2009.

  Liabilities

  Total liabilities as of 31 December 2009, stood at THB 7,971 million
  which were higher by THB 313 million or 4.1% than the balance recorded
  in 2008. Please see details below:

  Short-term loans from financial institutions were THB 28 million, a
  reduction of THB 3,402 million or 99.2%. This reduction was mainly due
  to the full refinancing and repayment of all short-term credit
  facilities and interest during 2009.

  The outstanding debenture was THB 3,990 million or 51.1% of total
  liabilities. On 16 June 2009, the company issued 4,000,000 units of
  unsubordinated, unsecured non discounted debentures with
  name-registered debenture certificates at the price of THB 1,000 per
  unit totaling THB 4.0 billion. The debenture carries a 4-year tenor at
  a coupon rate of 4.50% per annum with interest payable semi annually.

  Other liabilities totaling THB 3.953 million or 49.6% of total
  liabilities, a decline of THB 115 million or 2.8%, largely due to
  lower income tax payables of THB 149 million and trade accounts
  payables of THB 37 million.

  Shareholders’ Equity

  Total shareholder’s equity as of 31 December 2009 was THB 16,379
  million, up by THB 534 million or 3 .4%. This was due to the
  following:

  Unappropriated retained earnings rose by THB 2,946 million due to
  operating results in 2009, and:

  Profit distributions during the year 2009 with details as follows;

  - On 10 April 2009, the Annual General Meeting of the company’s
  shareholders approved to pay a final dividend of THB 4.50 per share
  from the 2008 received income totaling THB 1,035 million which was
  paid on 4 May 2009.

  - On 6 August 2009, the company’s Board of Directors approved the
  payment of an interim dividend from the company’s accumulated net
  profits during the period from January to June 2009 of THB 6 per
  share. A total sum of THB 1,380 million was paid to shareholders on 31
  August 2009.

  Minority interest increased by THB 3 million and currency translation
  differences of THB 1 million.