As at December 31, 2012, the Company had total assets of baht 1,637.46 million, which decreased by 1.60 percent due to the decrease in inventories at year end. Moreover, the company’s total account receivable has decrease from baht 77.49 million and non-current assets represented 22.51 percent of the total. Its current assets comprised inventories-net of 45.19 percent, cash and cash at banks of 21.85 percent. The intense competition in IT industry has caused lower gross profit margin. Account Receivables
As at December 31, 2011 and 2012, the Company had account receivables of baht 149.37 million and baht 126.76 million, and net account receivables of baht 147.82 million and baht 126.33 million. The Company’s policy in regard to allowance for doubtful accounts is to set aside an allowance for doubtful accounts of 50 percent for accounts ageing more than three months and 100 percent for accounts ageing more than six months but less than one year. As at December 31, 2011, the Company had account ageing more than three months of baht 0.05 million and account ageing more than six months of baht 1.53 million and set aside an allowance for doubtful account of baht 1.55 million or 1.04 percent of total account. As at December 31, 2012, the Company had account aging more than three months of baht 2.54 million and account aging more than six months of baht 0.16 million and set aside an allowance for doubtful accounts of baht 0.43 million or 0.34 percent of total account. The Company has increased its focus on retailers, which account for 95 percent of its total sales and services, and expects sales from retailers will continue to grow in the future with the aim to increase its cash liquidity and net profit. The increase in sales to retailers has the effect of reducing the risk of incurring bad debts. Most wholesalers are existing customers with good track records. Therefore, the Company does not expect to incur any significant losses from these customers. At present, IT CITY sets aside full provisions for doubtful accounts. In 2010, 2011 and 2012, the average collection period (wholesale only) was 37 - 50 days. Inventories
At the end of 2009, 2010, 2011 and 2012, IT CITY had net inventories of baht 705.17 million, baht 760.32 million, baht 716.92 million and baht 739.82 million respectively. Its net inventories comprised computers, peripherals, accessories and other products accounting for 37.88 percent, 17.73 percent, 30.46 percent and 13.93 percent, respectively. The increases in inventories resulted from a rise in sales and the number of branches each year. In 2009, the Company opened four new branches, in 2010 six and closed two, in 2011 seven, in 2012 five and closed one. To minimize the risk related to inventories, the management has implemented a number of inventory control measures. Each department monitors, audits and analyses products and customer’s needs and places orders in correlation with sales forecasts. The introduction of new technologies could affect inventories, and in some cases the Company would have to sell its inventories at a loss for its outdated stock. Moreover, in the fourth quarter of 2005, the company installs new software named “Epicor” to replace the old system. This new software provides the point of sale system which is linked to its accounting system in the near real time basis. It is a groupware programme
IT CITY ANNUAL REPORT 2012
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