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MD & A

Operation results of the Company and subsidiaries

The Group generated loss in 2015 and 2014 in amount of THB103.06 million and THB 189.26 million respectively.

Total revenues were recorded at Baht 550.32 million, main revenue in amount of Baht 229.96 million from moviemaking and film rights businesses, Baht 283.88 million from selling VCDs and DVDs, Baht 8.18 million from selling pocket book, Baht 0.2 million from management fee, and Baht 19.21million from advertising, representing 41.79%, 51.58%, 1.49%, 0.04% and 3.49% of total revenues respectively. Compared with 2014, the total revenues decreased about 35.79%.

Total expenses became lower about 37.55% from Baht 1,046.27 million in 2014 to Baht 653.38 million in 2015. Costs of production and services downed from Baht 632.97million to Bath 407.83 million or 35.57% and selling and administrative expenses decreased from Baht 407.31 million to Baht 234.42 million or 42.45%.

Revenues

The Group’s total revenues in 2015 decreased around Baht 306.68 million or 35.79% from a year earlier, which could be broken down by line of business in the below table:

(Unit: Million Baht)
Business Line Amount Increase/(Decrease) Ratio : Total Revenue
2015 2014 Amount % 2015 2014
VCD-DVD 283.88 379.67 (95.79) (25.23%) 51.58% 44.30%
Film rights 154.92 312.82 (157.90) (50.48%) 28.15% 36.50%
Film production 75.04 67.31 7.73 11.48% 13.64% 7.85%
Sales pocket book 8.18 9.17 (0.99) (10.80%) 1.49% 1.07%
Management fee 0.20 7.00 (6.80) (97.14%) 0.04% 0.82%
Advertising 19.21 62.23 (43.02) (69.13%) 3.49% 7.26%
Other Revenue 8.89 18.80 (9.91) (52.71%) 1.62% 2.19%
Total Revenue 550.32 857.00 (306.68) (35.79%) 100.00% 100.00%

VCD and DVD distribution business recorded decrease from 2014 of Baht 95.79 million or 25.23% in revenues due to in 2015 the Group has produced and distributed VCDs and DVDs less than 2014

Film rights business has decreased in revenues by Baht 157.90 million or 50.48% because the movies released in theaters in 2015 could generate revenue less than in 2014.

Film production business; the revenues increased by Baht 7.73 million or 11.48% because the year 2015, films made high revenue comparing by 2014.

Advertising revenues in 2015 recorded decrease of Baht 43.02 million or 69.13% because in the year 2015, we had less advertising areas in international and Thai films comparing by 2014.

Costs of Production and Services and Gross Profit Margin

The Group’s costs of production and services decreased from 2014 about Baht 225.14 million or 35.57% because of the decrease of production and distribution in home entertainment sector which connected with lower revenue.

Selling and Administrative Expenses

Selling and administrative expenses became lower by Baht 172.89 million or 42.45% from Baht 407.31 million in 2014 to Baht 234.42 million in 2015 caused by reducing costs of administration of the Group. Mainly due to the provision for impairment of goodwill reduced which was set completely complying with the indications of impairment and the reserve for doubtful accounts decreased as well.

Since the main business of the Company is in the category of entertainment, taste and favor of consumers, economic condition and other factors affect our business. Especially, in 2015, our movies were not much successful which making the Company generated loss.

Financial Result of the Company and Group

Asset

As of December 31, 2015, the Group had total assets of Baht 960.31 million, downed from December 31, 2014 by Baht 252.23 million or about 20.80%. The assets were composed of the following items:

(Unit: Million Baht)
Assets As of December 31 Increase (decrease) % of total asset
2015 2014 Amount % 2015 2014
Cash and cash equivalent 89.72 82.97 6.75 8.14 9.34% 6.84%
Trade accounts receivable - net 311.43 472.97 (161.54) (34.15) 32.43% 39.01%
Inventory 60.42 77.83 (17.41) (22.37) 6.29% 6.42%
Film on Production 138.43 127.98 10.45 8.17 14.42% 10.55%
Other current assets   63.48 75.27 (11.79) (15.66) 6.61% 6.21%
Investments in joint venture-net   49.84 40.74   9.10    22.34 5.19% 3.36%
Building and equipment - net   18.11 18.39 (0.28)    (1.52) 1.89% 1.52%
Goodwill - net 139.14 139.14   -   -   14.49% 11.48%
Computer program-net  1.71 1.88 (0.17)    (9.04) 0.18% 0.16%
Film rights - net   71.93 153.34 (81.41) (53.09) 7.49% 12.65%
Other non - current assets   16.10 22.03 (5.93) (26.92) 1.68% 1.82%
Total Asset 960.31 1,212.54 (252.23) (20.80) 100.00% 100.00%

Cash and cash equivalents increased from December 31, 2014 due to efficient management policy. Moreover, in 2015, the Company liquidity’s improved, and partly due to the sale and collection of trade receivables faster which affect the cash and cash equivalents increased

Trade accounts receivable and other receivables – net decreased Baht 161.54 million or 34.15% from 2014 which caused by from VCD and DVD distribution business.

Inventories which the most from VCD and DVD distribution’s sector, decreased from December 31, 2014 in amount of Baht 17.41 million or 22.37% which coming from the efficient policy.

Movies in process increased in amount of Baht 10.45 million or 8.17% from December 31, 2014 due to the plan of continuous production Thai movies for theatrical release which reflected to higher expense of Film on production.

Investments in joint venture-net increased from December 31, 2014 by Baht 9.10 million or 22.34% because the Company paid for the investment in Transformation Films Co.,Ltd. Moreover, in this year, the Company invested in films’ distribution company, MVP M-Pictures Film Distribution (Lao) Co.,Ltd., in Lao.

Movie rights – net came down from December 31, 2014 by Baht 81.41 million or 53.09%. Most are in the film’s production and home entertainment sector. Moreover, in 2015, the Company has carefully planned and managed film rights which making the movie rights decrease by comparing the previous year.

Liabilities and Equity of Shareholders

(Unit : Million Baht)
Liabilities and Equity of Shareholders December 31 Increase (decrease) % of liabilities per Equity of Shareholders
2015 2014 Amount % 2015 2014
Short-Term Loan and OD from Financial Institutes 9.50 50.00 (40.50) (80.99) 0.99% 4.12%
Trade Account Payable and other payable 147.86 222.79 (74.93) (33.63) 15.40% 18.37%
Other Current Liabilities 22.18 58.95 (36.77) (62.37) 2.31% 4.86%
Non-Current Liabilities 4.14 3.82  0.32  8.38 0.43% 0.32%
Total Liabilities 183.68 335.56 (151.88) (45.26) 19.13% 27.67%
Equity of Shareholders 776.63 876.98 (100.35) (11.44) 80.87% 72.33%
Total Liabilities and Equity of Shareholders 960.31   1,212.54 (252.23) (20.80) 100.00% 100.00%

Overdrafts and short-term loans from financial institutions are funding sources to meet the Group’s working capital, the outstanding balance as of December 31, 2015 decreased from 2014 by Baht 40.50 million or 80.99% due in 2015 the Company use the increasing capital acquired in 2014 which caused the company was able to pay the loan.

Trade accounts payable and other payable decreased from December 31, 2014 by Baht 74.93 million or 33.63% for normal transaction of business.

Other Current Liabilities downed from December 31, 2014 by Baht 36.77 million or 62.37%. The decrease mainly due to the estimated returned products.

Shareholders' equity as of year-end 2015 was at Baht 776.63 million as presented in the consolidated financial statement, decreased from Baht 876.98 million as of end-2014 resulting from revenues of the company generated loss in 2015.

Analysis of Financial Ratios:

December 31, 2015 December 31, 2014 December 31, 2013
Current Ratio 3.70 2.52 0.71
Receivable Turnover 1.73 2.07 1.73
Average Collection Period 211 176 211
Total Assets Turnover 0.5 0.69 0.60
Debt to Equity Ratio 0.24 0.38 11.04

Current Ratio; The Group carried a greater amount of current assets than current liabilities that reflected great liquidation since 2015 the company used the funds received from the increasing capital in 2014 for working capital and to repay bank loans and creditors. Moreover, the Company collected money from consumers efficiently resulting in adequate cash flow for operation.

Efficiency Ratios

Total Assets Turnover; the ratio of assets turnover in 2015 was slightly slower than 2014 because the revenue generated loss in 2015.

Receivable Turnover and Average Collection Period; The Group typically grants a credit term of around 90-180 days. Its receivable turnover for the current year becomes faster. Nevertheless, the VCD and DVD distribution business grants a collection period to the individual customers in accordance with the usual business norms.